U.S. sues Boeing for fraud in connection with B-1 bomber

Link to Source:  http://www.baronandbudd.com/us_sues_boeing_for_fraud_in_connection_with_b1_bomber

October 1, 2008

The U.S. Department of Justice has filed a civil fraud suit against The Boeing Company for alleged price gouging. Boeing is accused of unlawfully jacking up the price for a missile decoy system designed for the Air Force’s B-1 bomber by a substantial amount. During price negotiations, Boeing assured the government that it would build in-house the component parts necessary for the decoy system, which would cost more than if the parts were outsourced. But after the Air Force agreed to pay Boeing the higher price for building all the parts, Boeing turned around and outsourced the component parts at a discount to the company, thus defrauding the government of the cost difference for the outsourced parts. The Air Force learned of the fraud from whistle-blowers inside Boeing, who complained to their managers that the company was overcharging. The managers allegedly ignored the complaints and hid the overcharges from the Air Force. Although Boeing denies the charges, Air Force investigators and auditors claim to have evidence of 140 incidents of over billing by Boeing. Under the False Claims Act, the government may recover up to three times the amount of the loss and enforce criminal penalties for each of the 140 incidents of fraud.

For the full story, go to Oh My Gov!


Book by John Donnelly on Boeing Payments to Senator Stevens, Republican, of Alaska



Corporate Corruption The Abuse of Power, Book by Marshall B. Clinard

Link to Website:  http://books.google.com/books?id=PQJZxr_YBhgC&pg=PA81&lpg=PA81&dq=boeing+fraud&source=web&ots=4d5NDFXLLn&sig=sdd6ISigF-wJ-jUKniXa85r9oUc&hl=en&sa=X&oi=book_result&resnum=7&ct=result#PPP1,M1


Link to Original:  http://www.efluxmedia.com/news_Boeing_Doesnt_Know_How_to_Lose_14949.html


Boeing Doesn’t Know How to Lose

Apparently, legendary plane maker Boeing doesn’t know how to lose. The company, despite being stained with a scandal just years ago regarding tankers, doesn’t want to acknowledge that their offer was just not as appealing as that of rivals European Aeronautic Defense and Space Company (EADS) and Northrop Grumman.

Boeing has a dark history concerning military tankers which also raises concerns. In fact, Boeing won a similar contract in May 2003, but allegations of procurement fraud led to Boeing paying a record 615-million-dollar settlement to the United States government in 2004. A company executive and an Air Force official were both sent to jail.

Now, EADS and Northrop Grumman have prevailed over Boeing to grab a contract for up to 179 aerial tankers to replace the United States Air Force’s aging tanker planes. The deal may be worth as much as $30 billion to $40 billion over the next 10 to 15 years. Eventually, the United States Air Force will have to replace all 600 tanker planes, which might lead to that sum doubling easily.

Meanwhile, Boeing said it is thinking about filing a protest this week after its executives met Friday with Air Force officials about the rationale behind awarding the contract to EADS. The Air Force chose the tankers based on converted A330 Airbus passenger jets, offered by Northrop-EADS, over the competing Boeing design based on the 767 airliner. The government said that their plane offered better value for the taxpayers’ money over Boeing’s design.

“We left the room [Friday] with significant concerns about the process in several areas, including program requirements related to capabilities, cost and risk,” said Mark McGraw, Boeing’s program manager for the KC-767 tanker. “What is clear now is that reports claiming that the Airbus offering won by a wide margin could not be more inaccurate.”

EADS and its U.S. partner, Northrop Grumman, will build a new factory in Mobile, Alabama. Commercial freighters will also be produced here. Apparently, the civilian Airbus 330 will be built here along with its military brother. The company alleges that up to 1,800 jobs will be created in the Mobile area and up to 5,000 across Alabama.

However, Boeing still has many friends among lawmakers. “Having made sure that Iraq gets new schools, roads, bridges and dams that we deny America, now we are making sure that France gets the jobs that Americans used to have,” said Rep. Rahm Emanuel, D-Ill., quoted by AP. “We are sending the jobs overseas, all because John McCain demanded it.”

McCain had an important role in blocking the Boeing tanker scam of 2004. “I saved the taxpayers $6 billion in a bogus tanker deal,” the presidential candidate said of his 2004 actions against the Boeing deal.


Feds Charge Boeing Exec In Loan Scam

Manufacturing.Net – September 05, 2008

PHILADELPHIA (AP) — A former Boeing Helicopters executive is being charged in a loan kickback scheme based at a suburban Philadelphia plant.

Federal prosecutors say Anthony Forte used his job as a vice president with Boeing’s credit union to obtain $1,000 kickbacks on $20,000 loans given to unqualified applicants.

They say Forte recruited his brother, co-defendant David Forte, and several others to seek out more than 120 applicants for loans totaling more than $2.5 million.

The Fortes were charged Thursday with conspiracy, loan fraud and bank bribery.




Link to Original:  http://stlouis.bizjournals.com/stlouis/stories/2006/06/19/daily62.html?t=printable

Ex-Boeing director Rice sentenced for fraud

St. Louis Business Journal


Boeing Co.‘s former director of supply chain management, Robert Rice, was sentenced to one year and one day in prison Friday for fraudulent expenses totaling nearly $300,000.

Rice used Boeing expense cards to make personal purchases that included a $52,000 BMW automobile, U.S. Attorney Catherine Hanaway said Friday in a release.

He also was ordered to pay restitution of $299,382.69, which he paid Friday at his sentencing, the release said.

Last November, Rice, of the 16100 block of Walden Pond Lane in Chesterfield, Mo., pleaded guilty to one felony count of wire fraud. He appeared for sentencing Friday before U.S. District Judge Stephen Limbaugh.

Rice, 48, held the supply chain post at Boeing from 1997 until his termination in March 2005, according to a release. He had approval authority for the employee charge cards called purchase cards (P-Cards), used for items purchased outside of the normal supply chain.

Rice and an employee, Lisa Hernandez, made an agreement to use the employee’s P-Card to purchase items for themselves, the release said. After the purchases were made, Hernandez would submit the expenses to Rice for his approval, which were then submitted for payment by Boeing. In the course of this scheme, they purchased an automobile, artwork, jewelry, home improvement items and vacations totaling more than $299,382.

In order to further facilitate this scheme, Rice created a shell company in Nevada called Leantraining. Rice would approve P-Card purchases by Boeing to Leantraining for “training materials.” After payment was made by Boeing, Rice withdrew more than $85,000 cash, the release said.

Co-defendant Lisa Hernandez, 35, formerly of Florine Court in St. Charles, Mo., also pleaded guilty and was sentenced Feb. 10 to one year and one day in prison.

Boeing cooperated fully in the investigation, according to a release from Hanaway’s office.

Chicago-based Boeing Co.’s (NYSE: BA) Integrated Defense Systems unit, its largest subsidiary, is based in St. Louis and is the area’s second-largest employer.