DALLAS (AP) — The federal government has joined a whistleblower lawsuit that claims defense contractor Lockheed Martin Corp., along with a Texas vendor and its former executives, overcharged the government by millions of dollars.
The lawsuit filed by a former TMI account executive and a TMI competitor alleges that former TMI president and chief executive Todd Loftis of Colleyville overcharged for manufacturing tools sold to Lockheed Martin, which resulted in Lockheed Martin submitting false claims to the Defense Department from January 1998 through February 2006.
The Justice Department said the complaint alleges that Lockheed is ''independently liable'' for TMI's violation of the False Claims Act due to its ''reckless oversight of TMI.''
Former TMI account executive John Becker and a competitor of the company, Robert Spencer, filed the suit in U.S. District Court in Dallas under a whistleblower provision of the False Claims Act. Under the provision, a whistleblower can sue on behalf of the United States and receive part of the recovery.
''We regret that the department has now opted to join this lawsuit, which we believe is without merit and which we will vigorously defend,'' said Tom Jurkowsky, Lockheed Martin spokesman. During the criminal prosecution of Loftis, the Justice Department told the sentencing court that both Lockheed Martin and the government had been ''victims of a sophisticated fraud scheme,'' Jurkowsky said.
The Justice Department, which announced Monday that it has joined the suit, has 45 days to submit its complaint.
''Government contractors are expected to take necessary steps to ensure that their claims for payment are accurate. Anything short of that is unacceptable,'' said Richard B. Roper, U.S. Attorney for the Northern District of Texas.
The whistleblower lawsuit also names Linda Loehr, a former officer, director and beneficial owner of TMI, alleging she failed to carry out her responsibilities as an officer of the company.
The investigation was conducted by the U.S. Attorney's Office for the Northern District of Texas, the Justice Department's Civil Division, the Defense Criminal Investigative Service, the Air Force Office of Special investigations and the Defense Contract Audit Agency.
On Dec. 8, 2005, Loftis pleaded guilty to one count of conspiracy to defraud the U.S. government related to Fort Worth-based TMI's overcharging. The whistleblower complaint was filed before Loftis entered his plea.
In March, Loftis was sentenced to more than seven years in prison for defrauding the government of $20 million by inflating the price of tools used by Lockheed Martin to manufacture airplanes, including the F-16 and F-22 Raptor.
Loftis was employed by the tool company for more than 12 years and was in charge for most of that time. The company filed for Chapter 7 bankruptcy protection in September 2005.
Shares of Bethesda, Md.-based Lockheed Martin fell 40 cents in after-hours trading, after falling 14 cents during the trading session to close at $111.23.