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The linked DOJ report has far more detail [0]. On the penalties themselves: According to court documents, SPI has agreed to plead guilty to one count of mail f
by wlkr 7y ago
The linked DOJ report has far more detail [0]. On the penalties themselves:
According to court documents, SPI has agreed to plead guilty to one count of mail fraud, and SEI has entered into a deferred prosecution agreement (DPA) in connection with a criminal information filed today charging the company with mail fraud. As part of the plea agreement, SPI has agreed to pay $34.1 million in combined restitution to NASA, the Department of Defense’s Missile Defense Agency (MDA), and commercial customers. SPI has also agreed to forfeit $1.8 million in ill-gotten gains. The plea agreement remains subject to acceptance by the court at a plea hearing currently scheduled for May 13, 2019, before U.S. District Judge Liam O’Grady. The DPA with SEI is conditioned on the court’s acceptance and SPI’s satisfaction of the plea agreement’s terms.
SPI also agreed to pay $34.6 million as part of a related civil settlement to resolve its liability under the False Claims Act for causing a government contractor to invoice MDA and NASA for aluminum extrusions that did not comply with contract specifications. Government contractors purchased aluminum extrusions for use on rockets for NASA and missiles provided to the MDA. Under the terms of the civil settlement agreement, SPI will satisfy the $34.6 million settlement through credits totaling $23.6 million for its restitution payments as part of the criminal plea agreement, plus additional payments of $6 million to NASA and $5 million to the MDA.
[0]: https://www.justice.gov/opa/pr/aluminum-extrusion-manufacturer-agrees-pay-over-46-million-defrauding-customers-including https://www.justice.gov/opa/pr/aluminum-extrusion-manufactur...
- pseudolus 7y agoThe deferred prosecution agreement essentially means that as long as the SEI adheres to the financial terms of the plea agreement the government will eventually drop the charges [0]. That's an amazing deal in its generosity and I'm sure that the financial penalties levied are outweighed by the financial gain realized over the years of their fraudulent activity. The rationale for not pursuing the company for the full $700 million dollars lost escapes me. The damages were entirely foreseeable. [0] http://www.mololamken.com/news-knowledge-18.html http://www.mololamken.com/news-knowledge-18.html
- busterarm 7y agoProbably "jobs". :(
- brianpgordon 7y agoThis is a worthwhile book that might help clear up some of your bewilderment at why corporate crime cases so often turn out so unsatisfactorily. https://www.amazon.com/Chickenshit-Club-Department-Prosecute-Executives/dp/1501121367 https://www.amazon.com/Chickenshit-Club-Department-Prosecute... My personal TL;DR from a couple of years ago if you don't have the time to read the book: - It's very hard for prosecutors to secure a criminal conviction even in the most blatant cases of wrongdoing. - Prosecutors care too much about their win rate to risk trials. - Prosecutors have fallen into a trap where they're so dependent on the policy of offering generous non-prosecution or deferred-prosecution agreements if the company comes forward and volunteers evidence, they've become incapable of actually executing on a complex criminal investigation anymore. - There's intense political pressure to not punish shareholders for management's misdeeds.
- caprese 7y agoI enjoyed that book, I felt it kind of just "ended" though. It had some interesting history and insights but then the pages just kind of ran out
- JoeAltmaier 7y agoBut the civil case seems so easy - failure to deliver the right stuff over most of a decade. Should be possible to bankrupt this company over contract fraud?