On July 1, 1999, two Litton Industries units pleaded guilty to fraud and conspiracy and agreed to pay $18.5 million to settle allegations of having made illegal payments to obtain defense business in Greece and Taiwan.
The Litton Applied Technology division, in San Jose, pleaded guilty to one count of conspiring to defraud the Government. Litton Systems Inc. Canada pleaded guilty to the same charge, plus one count each of mail fraud and causing a false statement to be made to the Government.
The negotiated plea ends investigations of a $150 million deal to sell radar for F-16 fighter planes to Greece and $47 million in contracts to upgrade Taiwanese military aircraft. In the Taiwan case, prosecutors accused the Litton units of paying more than $4.3 million to Richard M. Hei, a retired Taiwanese Air Force major, for using his contacts to help secure contracts. Another Litton unit, Litton Systems International Inc., was named as an uncharged co-conspirator. In Greece, the Applied Technology division was alleged to have paid more than $12 million to four Greek agents for help in selling the F-16 radars in 1993. Litton's Applied Technology International division was named as a co-conspirator, but was not charged. Most of the payments were uncovered in 1997 during Federal audits of the sale.
In both cases the companies were accused of hiding the payments from American regulators.
The company agreed to pay $16.5 million in fines, plus restitution in the amount of $737,000 and costs of investigation in the amount of $1,263,000.00.
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