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LITTON PLEADS GUILTY TO FELONIES; FIRM FINED $18.5 MILLION.



Byline: Gregory J. Wilcox Staff Writer

In one of the largest settlements of its kind ever, Litton Industries Named after inventor Charles Litton Sr., Litton Industries was a large defense contractor in the United States, bought by the Northrop Grumman Corporation in 2001.  Inc. on Wednesday pleaded guilty to federal felony felony (fĕl`ənē), any grave crime, in contrast to a misdemeanor, that is so declared in statute or was so considered in common law.  charges and agreed to pay $18.5 million in penalties for concealing commissions paid to foreign consultants.

The plea by two units of the Woodland Hills-based defense contractor Noun 1. defense contractor - a contractor concerned with the development and manufacture of systems of defense
armed forces, armed services, military, military machine, war machine - the military forces of a nation; "their military is the largest in the region";
 had been rumored for several weeks and concludes an eight-year federal investigation into deals with Taiwan and Greece valued at about $200 million.

Litton's Applied Technology Division of San Jose San Jose, city, United States
San Jose (sănəzā`, săn hōzā`), city (1990 pop. 782,248), seat of Santa Clara co., W central Calif.; founded 1777, inc. 1850.
 pleaded guilty to one count of conspiring to defraud To make a Misrepresentation of an existing material fact, knowing it to be false or making it recklessly without regard to whether it is true or false, intending for someone to rely on the misrepresentation and under circumstances in which such person does rely on it to his or  the government. Litton Systems Canada, Ltd., of Toronto also entered a guilty plea to that charge and one count each of mail fraud and causing a false statement to be made to the government.

The company must make restitution in five business days.

Randy Belote, Litton's spokesman, said that settling was the most expeditious ex·pe·di·tious  
adj.
Acting or done with speed and efficiency. See Synonyms at fast1.



ex
 course for the company to take.

``This action allows the company to put this matter behind us and focus on serving our customers and shareholders,'' he said.

He also claimed that the case was not about making illegal payments to foreign government officials but rather about financial reporting and accounting inaccuracies.

``There have been recent press reports that said Litton engaged in making illegal commission payments to foreign consultants and or bribing foreign government officials and that is not the case,'' he said.

However, federal prosecutors disputed Litton's claim.

``The guilty pleas demonstrate that this is not a technical violation. This is not a gray area. . . . This is a calculated, long-range conspiracy to defraud agencies of the government,'' said Assistant U.S. Attorney Patricia A. Beaman.

Litton's plea was unsealed in U.S. District Judge Richard A. Paez's courtroom Wednesday afternoon.

It calls for the government of Taiwan to receive $737,000.

Litton also agreed to a compliance plan, which puts in place guidelines for the company to follow in regard to training employees in regulations governing dealings for foreign military sales That portion of United States security assistance authorized by the Foreign Assistance Act of 1961, as amended, and the Arms Export Control Act of 1976, as amended. This assistance differs from the Military Assistance Program and the International Military Education and Training Program .

The contractor is paying $16.5 million in criminal fines plus $2 million in restitution and investigative costs.

The case focused on $16 million in commissions Litton paid to agents who helped the company win Greek and Taiwanese contracts.

Beaman said that Litton paid in excess of $12 million to four Greek agents who helped the company get about $150 million worth of aircraft electronics business. And the company paid about $4 million to Yu-Ming Hei, also known as Richard M. Hei, a former Taiwanese Air Force pilot who worked securing three contracts worth about $40 million.

After he was prosecuted in the United States United States, officially United States of America, republic (2005 est. pop. 295,734,000), 3,539,227 sq mi (9,166,598 sq km), North America. The United States is the world's third largest country in population and the fourth largest country in area.  on tax evasion The process whereby a person, through commission of Fraud, unlawfully pays less tax than the law mandates.

Tax evasion is a criminal offense under federal and state statutes. A person who is convicted is subject to a prison sentence, a fine, or both.
 charges Hei aided the government in its case against Litton.

Hei said he was paid commissions ranging between 5 percent and 10 percent on business he secured for Litton. He said his largest take was $3.2 million for a $32 million contract that Litton won to upgrade Taiwan's anti-submarine aircraft.

Litton's Belote declined to explain why the company did what it did or whether the individuals involved still work at the company or were disciplined.
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Copyright 1999, Gale Group. All rights reserved. Gale Group is a Thomson Corporation Company.

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Title Annotation:Business
Publication:Daily News (Los Angeles, CA)
Geographic Code:1USA
Date:Jul 1, 1999
Words:513
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