On October 16, the U.S. Department of Justice released a statement regarding an investigation into RTX Corporation, formerly known as Raytheon, for allegedly inflating prices on missile and defense service contracts, as well as bribing high-ranking officials in Qatar. As a result, Raytheon has agreed to pay over $950 million to reach a settlement with the U.S. government.
Through this settlement, Raytheon will pay $950 million in criminal and civil penalties, implement enhanced internal controls, and cooperate with ongoing investigations, as part of a deferred prosecution agreement. If Raytheon complies with the terms of the agreement for three years, the prosecution will drop the charges.
The Justice Department noted that the Boston prosecutor’s investigation revealed that Raytheon admitted to inflating prices on two contracts, constituting fraud, involving the procurement of Patriot missile systems and radar system sustainment contracts signed between 2012 and 2013, as well as 2017 and 2018. The inflated prices amounted to approximately $110 million, although the department did not disclose who the victims of this fraud were.
The settlement related to the Boston case includes a $140 million fine, along with $111 million in restitution to the victims.
Furthermore, during the period from 2009 to 2020, Raytheon provided false pricing in multiple arms sales contracts across several countries, including inflated labor costs for radar maintenance and duplicate billing, which violated honest pricing regulations. In light of this, Raytheon has agreed to pay $428 million as part of a civil settlement.
Additionally, investigations by the U.S. Attorney’s Office for the Eastern District of New York found that between 2012 and 2016, Raytheon bribed a Qatari Air Force official with approximately $2 million to secure arms contracts, violating the Arms Export Control Act. As a result, Raytheon has agreed to a penalty of $250 million.
