August 27, 2001 Electromechanical Systems Inc.

Electromechanical Systems Inc. has agreed to pay $1 Million Dollars to settle claims asserted in a qui tam action filed by seven of its former employees. The company had contracted with the federal government to repair and restore radar pedestals on U.S. Warships. The allegations of the case were that for 17 years the company had routinely lied to the Navy about its costs in order to obtain higher contract prices from the government. The company also directed its employees to record time spent on other tasks to labor hours assigned to Navy restoration contracts and destroyed records in order to mislead government auditors.

As part of the settlement, the employees who filed the qui tam action will receive $1.7 Million Dollars for having filed the case.

See U.S. Dept of Justice Press Release 8/27/01

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