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One of the Pentagon's Largest Contractors Will Pay $1 Billion for Price Gouging
Raytheon has agreed to pay more than $950 million to resolve government investigations into fraud, corruption and price gouging. The company's actions have also affected Taiwan, according to SCMP.
Raytheon, one of the Defense Department's largest contractors, will pay nearly $1 billion in fines for fraud, price gouging and corruption, the U.S. Justice Department announced.
"RTX subsidiary Raytheon has agreed to pay more than $950 million to resolve a government investigation into a massive government fraud scheme involving improper pricing on certain government contracts, violations of the Foreign Corrupt Practices Act (FCPA), and violations of the Arms Export Control Act (AECA) that has it written all over it."
Specifically, Raytheon was accused of inflating prices on government contracts, defrauding the United States, providing false certification costs, and double-billing the Department of Defense.
The U.S. Justice Department said the company was involved in a scheme to bribe Qatari officials and conspire to violate U.S. law by exporting weapons abroad.
According to the statement, Raytheon employees also provided false and misleading information to the Defense Department during negotiations for two contracts with the United States for the benefit of foreign partners. One of those contracts involved the delivery of Patriot air defense systems, and the other involved the management and support of radar stations, according to the Justice Department.
At a trial in New York, RTX representatives pleaded not guilty to two of the three charges, the Associated Press reports.
Raytheon's inflated prices were uncovered after a U.S. federal probe of the company in early 2024. Taiwan was one of the affected parties, according to the South China Morning Post. The contractor wrote that it had inflated prices by hundreds of millions of dollars when supplying weapons to Taipei.