Oct. 15, 2009 (PR Newswire) --
CHICAGO, Oct. 15 /PRNewswire/ -- Wired undercover by the FBI to help expose his employer's pervasive, interlocking and sophisticated schemes of brazen accounting chicanery, a qui tam whistleblower's efforts resulted in today's agreement by aerospace contractor MPC Products Corporation and MPC International, Inc. ("MPC") to pay $22.5 million to the federal government. The settlement resolves procurement fraud allegations that the Department of Defense ("DOD") was falsely billed over seven years, according to a Complaint filed under seal in 2003 by whistleblower lawyer Mark Allen Kleiman of Los Angeles, and employment lawyer Dennis R. Favaro of Palatine, Illinois.
Skokie-based MPC, acquired in October 2008 by Woodward Governor Co. and renamed Woodward MPC, Inc., will pay a total of $25 million to the United States, which includes $2.5 million in fines in related criminal prosecution, the U.S. Department of Justice announced.
Woodward MPC had been debarred by the Pentagon from government contracts for approximately a year until it recently executed a three-year administrative agreement with the DOD which includes enhanced ethics implementation.
Joe Caputo, an Illinois resident and former long-time pricing analyst for MPC, had been fired on a pretext in fall 2000 after refusing his employer's instructions to continue falsifying documents which were being provided to the government. He was rehired approximately a year later, resuming his duties but secretly cooperating undercover with federal authorities, gathering information that led to today's settlement. Caputo took personal risks to secretly record workplace conversations for the authorities and then, with attorneys Kleiman and Favaro, spent more than 1,000 hours helping government investigators analyze company accounting documents.
"Joe was a real hero in this case. He took great risks over the years. He and his family put up with tremendous hardships to make this investigation work. I'm so proud to be able to work with whistleblowers like him who help return ill-gotten gains to taxpayers from defense, medical and other government frauds," Kleiman said.
"As our fraud investigation unfolded we saw its extent and went straight to the government. It was Joe's knowledge and persistence in teaming up with government investigators which made this case work," said Favaro.
The defense fraud schemes employed by MPC were designed to maintain high profit margins and help win private industry contracts by creating false pricing data. The government paid high prices for MPC parts.
