Raytheon Company, a subsidiary of RTX (based in Arlington, Virginia), has agreed to pay over $950 million to resolve several investigations conducted by the U.S. Department of Justice. These investigations pertain to an extensive government fraud case involving the provision of inaccurate pricing on certain contracts, as well as breaches of the Foreign Corrupt Practices Act (FCPA) and the Arms Export Control Act (AECA), along with related International Traffic in Arms Regulations (ITAR).
The Justice Department has confirmed that Raytheon will enter a three-year deferred prosecution agreement following the filing of a criminal information in the District of Massachusetts. This filing involves two counts of significant fraud against the United States.
As part of this resolution, Raytheon acknowledged participating in two distinct schemes intended to defraud the Department of Defense. These schemes were related to the supply of defense articles and services, notably involving PATRIOT missile systems and a radar system.
Court documents and admissions submitted in the District of Massachusetts reveal that between 2012 and 2013, and then again from 2017 to 2018, Raytheon employees presented false and misleading information to the Department of Defense during contract talks. These negotiations were related to two contracts with the United States that aimed to benefit a foreign partner. One contract was for the acquisition of PATRIOT missile systems, while the other involved the operation and maintenance of a radar system. In each instance, the objective was to deceive the Department of Defense into approving these contracts at inflated prices. These fraudulent activities led to the Department of Defense overpaying by more than $111 million.
Pursuant to the terms of the Deferred Prosecution Agreement (DPA), Raytheon is obligated to pay a criminal fine amounting to $146.79 million, compensate victims with $111.20 million, and appoint an independent compliance monitor for a duration of three years. The Department of Justice has consented to credit the victim compensation sum against any restitution Raytheon provides to the Civil Division during its concurrent False Claims Act case.
