L-3 Communications to Pay $4.6 Million to Resolve Whistleblower Suit

Defense contractor L-3 Communications Holdings Inc. agreed to pay $4.6 million to resolve allegations it overcharged the federal government, the latest development in a long-running case exposed by one of its employees.

Robert A. Martin, the employee who filed the so-called whistleblower complaint in Georgia federal court, will receive $798,675 as part of the settlement.

"Contractors owe a duty to the taxpayers to accurately bill the United States for the actual work performed," U.S. Attorney John A. Horn said in a news release. "This settlement demonstrates our commitment to hold contractors accountable for false billing and restore wrongfully taken funds to the military."

New York-based L-3, one of the largest contractors for the U.S. military, disclosed in 2014 that it booked more than $160 million in charges and fired several workers after an employee alerted company officials of a scheme to inflate sales and costs linked to U.S. Army contract for $150 million a year.

L-3, which has been awarded additional Pentagon contracts, lost more than $1 billion in market value when it first disclosed the matter.

The authorities charged that between 2006 and 2011, L-3 Communications intentionally inflated labor hours for contractors at Fort Benning, Ga., and Fort Bliss, Texas, who were being trained before deployment to support U.S. military operations abroad, including Afghanistan, Iraq and Kuwait.

The company's stock, largely inactive in late trading, closed Monday at $101.90, down 19% for the year.

Write to Maria Armental at [e-mail]

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(END) Dow Jones Newswires

September 28, 2015 20:45 ET (00:45 GMT)

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