Lockheed Martin Corp., the largest defense contractor in the U.S., settled a False Claims Act case in March 2012 for $15.85 million.
The lawsuit, filed in Dallas federal court, alleged that Lockheed and its subcontractor, Tools & Metals, Inc., engaged in a seven-year pricing fraud by mischarging the federal government for tools used on military aircraft. The subcontractor allegedly inflated the costs of certain perishable tools to Lockheed, and Lockheed passed the excessive costs on to the government
Previously, in 2005, the former president of Tools & Metals, Inc. pleaded guilty to fraud charges and was sentenced to seven years in prison for his role in the overcharging scheme. The two whistleblowers who initiated the suit shared $2 million of the government’s recovery.