Seven Employee Whistleblowers and the United States Settle False Claims Act Allegations against the General Electric Company and Others for $11,500,000.00

(July 21, 2006) – In a federal false claims act case that saw three lawyers, including Frederick M. (Rick) Morgan, Jr. of Volkema Thomas, represent seven whistleblowers in allegations against General Electric, the United States Department of Justice and the United States Attorney for the Western District of Kentucky announced the settlement of United States ex rel. LeFan, et al. v. The General Electric Company, et al., a case brought by seven qui tam Relators – whistleblowers – under the qui tam provisions of the United States False Claims Act.

The settlement resolves allegations set out in a 115-page Civil Complaint filed under seal and made public on the date above as a result of an approval of the settlement by United States District Judge Joseph H. McKinley, Jr. The case had been pending in Owensboro, Ky. since October 2000.

Also named as defendants in the Complaint are the Howmet subsidiary of Alcoa, Inc., and Precision Castparts Corporation, both of which supply castings to the Madisonville, Ky. GE plant.

The seven whistleblowers, Dennis LeFan, Jason Gibson, Jeff Ashby, Elsworth Cranor, Harold Dilback, Keith Lax, and Connie Sue Orten Barnett, work or worked in manufacturing and testing positions in General Electric Aircraft Engine’s Turbine Airfoil plant in Madisonville. The plant manufactures critical components, called “blades” and “vanes,” for GE jet engines. The central allegation of the relators’ complaint was that the manufacturing process at the plant was not properly controlled and that as a result, parts which had the potential of causing catastrophic losses, were knowingly or recklessly shipped to the Armed Forces of the United States for installation in airplanes, ships, helicopters, and tanks, including the President’s aircraft, Air Force One and Marine One.

The Department of Justice, after a lengthy investigation, determined it should pursue the claims against General Electric for the conduct alleged by the whistleblowers.

The case was investigated by the Defense Criminal Investigative Service; the Army Criminal Investigations Division; the Navy Criminal Investigation Service; the Air Forces Office of Special Investigations; and the Defense Contract Audit Agency. The United States was represented by attorneys from the Civil Frauds Branch of the Department of Justice in Washington, D.C. and Assistant United States Attorneys in Louisville, Ky.

The relators demonstrated enormous courage and integrity in coming forward with allegations of misconduct against one of the most powerful corporations in the world, and great perseverance in working with the United States as it pursued their allegations. Their action is a testament to their concern for the safety of military personnel who rely upon GE-powered aircraft the world over.

The False Claims Act rewards private citizens who bring forward information and assist in the prosecution of False Claims Act cases by paying a share of the proceeds of settlement or judgment. In this case, the United States has agreed to pay the relators 20.5% of the $11,500,000 settlement, or $2,357,500.

The Complaint included allegations that three of the seven whistleblowers were victims of unlawful retaliation as a result of their bringing the information to the attention of the Government. Those claims are not resolved by this settlement.

For additional information, or for a copy of the complaint or the settlement agreement, contact:

Frederick M. Morgan, Jr.
Volkema Thomas LPA
700 Walnut Street, Suite 400
Cincinnati, Ohio 45202
513-651-4400
513-702-8946 (cell)
http://www.vt-law.com

View Related Article:  Kentucky Lawyers Honor LeFan, Six Others for Whistleblower Actions