RTX (RTX.N), the aerospace and defense giant, has reached a substantial agreement to pay approximately $950 million to resolve serious federal charges involving fraud against the U.S. Department of Defense and bribery of a Qatari official. This settlement, announced on Wednesday, addresses allegations that the company misled the government into overpaying for defense systems and engaged in corrupt practices to secure contracts with Qatar’s air force.
The resolution involves two deferred prosecution agreements with the U.S. Department of Justice (DOJ), covering criminal charges filed in federal courts in Boston and Brooklyn. The company’s Raytheon unit has acknowledged the validity of the allegations, admitting to the misconduct that occurred between 2012 and 2018.
As part of the settlement, RTX will pay a criminal penalty of $146.8 million related to the fraud case concerning over $111 million in excess payments for Patriot missile systems and radar operations. Additionally, it will address civil claims under the False Claims Act, resulting in a payment of $428 million stemming from a whistleblower lawsuit initiated by former employee Karen Atesoglu. In recognition of her role in exposing the fraud, Atesoglu will receive a $4.2 million share of the settlement.
In Brooklyn, prosecutors charged Raytheon with conspiring to violate both the Foreign Corrupt Practices Act and the Arms Export Control Act by bribing a senior official in Qatar from 2012 to 2016. To resolve these charges, Raytheon has agreed to pay a criminal penalty of $252.3 million and forfeit an additional $36.7 million. The company will also settle with the U.S. Securities and Exchange Commission (SEC) for $75 million, benefiting from credits against its criminal penalties.
Under the terms of these agreements, if RTX complies with all conditions over the next three years—including hiring an independent compliance monitor—prosecutors have agreed to dismiss criminal charges against the company.
This settlement marks a significant chapter for RTX, which has been under investigation since 2019 following its merger with United Technologies in 2020 and subsequent rebranding last year. The company has previously set aside $959 million to cover anticipated settlements related to these cases.
As RTX moves forward, it emphasizes its commitment to accountability and compliance within its operations, ensuring that such misconduct does not occur again.
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