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U.S. Justice Department Files False Billing Lawsuit Against Boeing; United Space Alliance
By Paul Hoversten

Washington Bureau Chief

posted: 07:05 am ET
13 January 2000

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WASHINGTON -- The Justice Department filed a last-minute lawsuit charging that Boeing and space shuttle operator United Space Alliance (USA) passed along to the government false billing claims put in by a now-defunct subcontractor for shuttle work done more than seven years ago, company officials said Wednesday.

The lawsuit, filed in U.S. District Court in Los Angeles before the statute of limitations ran out on Wednesday, arises from fraudulent claims that were filed with NASA from 1986 to 1993 by Omniplan Corp. The Houston company, which supplied technical writing and graphics for the shuttle program, had been a subcontractor to Rockwell Space Operations Company.

USA was told by a Justice Department lawyer that the lawsuit had been sent Tuesday night to the U.S. District Courthouse in Los Angeles for processing.
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Omniplan went out of business in 1993 in the wake of a federal investigation in which it agreed to pay a $10 million fine for violating the False Claims Act.

The Justice Department suit alleges that Rockwell knowingly passed along to NASA some of the fraudulent Omniplan claims. Rockwell in April 1996 assigned the contract to manage NASA's space shuttle fleet to United Space Alliance, a company formed in a partnership between Boeing and Lockheed Martin.

Some of the work that USA had pursued had been completed by Omniplan. However Omniplan has never been a subcontractor to USA, nor has NASA ever been billed for Omniplan invoices, USA officials say. Rockwell later was merged with Boeing.

If it all sounds confusing, that may be part of the problem, say officials from both Boeing and USA.

"We believe USA is being named as a defendant as a result of some confusion over corporate identities stemming from the assignment of (shuttle operations) to USA," said Jeff Carr, a spokesman for USA in Houston. "USA has not been involved in any of the alleged illegal activities."

At Boeing, officials are equally mystified at the reasoning behind the lawsuit. "The purported complaint involves a subcontractor that was ultimately convicted of fraud several years ago," the company said in a statement. "We cooperated with the government investigation at that time. We deny we had any knowledge of the fraud."

Timing apparently played a key role. In a January 11 memo to USA employees that wound up on the internet, Russell Turner, president of USA, noted the January 12 statute of limitations for the government to file suit and said that "may have precipitated this action."

The USA, Turner wrote, "has not engaged in any of the illegal action alleged to have been committed in the complaint."

Some industry observers suspect the lawsuit may be an attempt by the government to collect the $10 million that Ominplan agreed to pay -- but apparently never did.

Justice Department spokesman did not returned repeated phone calls for an explanation Wednesday.


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