Defense Contractor RTX Agrees to $950 Million Fines to End Bribery and Fraud Allegations
Defense contractor RTX, formerly known as Raytheon Technologies Corporation, agreed to pay more than $950 million to resolve allegations of foreign bribery and inflating federal contracts.
The company was previously charged with conspiracy to violate the Foreign Corrupt Practices Act (FCPA) and conspiracy to violate the Arms Export Control Act (AECA).
The company entered into two separate three-year deferred prosecution agreements with the U.S. Department of Justice (DOJ) in federal courts in New York and Massachusetts.
As part of the agreement with Massachusetts, RTX admitted to engaging in two separate schemes to defraud the U.S. Department of Defence (DOD), according to the DOJ. Employees had given fraudulent information to the U.S. Army, which in turn led to the DOD paying $111 million more for contracts for Patriot air-defense missile systems in 2013 and a radar system in 2017.
Under the terms of the agreement, RTX will pay a criminal penalty of roughly $146.8 million, $111.2 million in victim compensation, and will retain an independent compliance monitor for three years. The company also entered into a civil False Claims Act (FCA) settlement, agreeing to pay $428 million—the second-largest government fraud recovery. The DOJ agreed to credit RTX the victim compensation amount against the restitution payments the company makes to the Civil Division in the FCA settlement.
The employees involved in the fraud were terminated, and RTX has also conducted other remediation efforts, such as the creation of a broad defective pricing awareness campaign and implementing policies and controls related to defective pricing compliance.
According to court documents filed in New York, company employees admitted to engaging in a bribery scheme with a high-level Qatari military official between 2012 and 2016. The bribes were for the official’s help in securing certain air defense and military contracts, working around the competitive bidding process.
As part of the agreement, the company will pay a criminal monetary penalty of more than $252.3 million, forfeiture of more than $36.6 million, and keep an independent compliance monitor for three years.
RTX also agreed to a settlement with the U.S. Securities and Exchange Commission (SEC), which was investigating the bribery conspiracy in parallel with the DOJ. As part of the resolution with the SEC, the company will pay roughly $49.1 million in disgorgement and prejudgment interest and a civil penalty of $75 million, although $22.5 million of these amounts will be credited against the criminal monetary penalty with the DOJ.
The independent monitors ARE meant to ensure that the complies with anti-corruption and anti-fraud laws.
“RTX is taking responsibility for the misconduct that occurred,” said Chris Johnson, director of global media relations for RTX, in a statement emailed to Security Management. “…We are committed to working closely with the incoming independent monitor to improve and further enhance our ethics and compliance program.” (United States of America v. Raytheon Company, U.S. District Court for Massachusetts, No. 24-cr-10319-NMG, 2024)
