Christopher K. Barnes, Assistant United States Attorney
Theodore S. Greenberg, Chief, Money Laundering Section, Criminal Division
Gerald E. McDowell, Chief, Fraud Section, Criminal Division
Peter B. Clark, Deputy Chief, Fraud Section, Criminal Division
Thomas A. Colthurst, Trial Attorney, Money Laundering Section, Criminal Division
James A. Baker, Trial Attorney, Fraud Section, Criminal Division
US Assisting Agencies: Unknown
Foreign Enforcement Action/Investigation: Unknown
Foreign Assisting Agencies: Unknown
Origin of the Proceeding:
Whistleblower
Whistleblower:
Yes (GE Employee)
Case Status:
Resolved
Summary
General Electric Company was a New York corporation with its principal address in Schenectady, NY, and executive offices in Fairfield, CT. General Electric Aircraft Engines ("GEAE") was a business unit of General Electric that produced and sold aircraft engines and related products and services to the United States and foreign governments and domestic and foreign commercial customers. GEAE was not a separate corporate entity from General Electric.
Between about 1984 and about 1991, General Electric, through GEAE, supplied jet aircraft engines and related equipment and services to the Israeli Air Force ("IAF"), pursuant to contracts between General Electric and the Government of Israel. In connection with these acquisitions, General Electric, IAF Brigadier General Rami Dotan, General Electric international sales manager Herbert B. Steindler, and others conspired to create false billings for fictitious IAF projects to generate funding for projects and uses that Dotan either could not or did not want to have approved through the Israeli Ministry of Defense or the U.S. Government. In addition, approximately $11 million was diverted for the personal benefit of Dotan and Steindler. General Electric, acting principally through Steindler, generated the approximately $11 million from the filing of false and fictitious invoices and supporting documents and paid a portion of these funds to Dotan to influence him to assist General Electric in its efforts to secure favorable treatment in connection with the retention of the contracts referred to above. None of these payments were properly recorded in General Electric's books and records.
On July 22, 1992, the DOJ filed a four count Information in the Southern District of Ohio against General Electric alleging (1) conspiracy to make false, fictitious, or fraudulent statements, conspiracy to make false statements, conspiracy to commit wire fraud, conspiracy to commit money laundering, conspiracy to violate the books & records provisions of the FCPA; (2) direct violations of the books & records provisions of the FCPA; (3) making false, fictitious, or fraudulent statements; and (4) money laundering. On the same date, General Electric entered into a Plea Agreement with the DOJ. Under the terms of the agreement, General Electric pleaded guilty to all four counts and agreed to pay a fine of $9.5 million plus a mandatory assessment of $800. The DOJ noted the company's cooperation and took into consideration the concurrant settlement agreement the company entered into with the DOJ civil division and two qui tam plaintiffs. In the civil settlement, General Electric agreed to pay $59.5 million to the U.S. government.
Protected Content
Please Log In or Sign Up for a free account to access restricted features of the Clearinghouse website, including the Advanced Search form and the full case pages.
When you sign up, you will have the option to save your search queries performed on the Advanced Search form.
