FOR IMMEDIATE RELEASE                                         CIV
THURSDAY, FEBRUARY 23, 1995                        (202) 616-2765
                                               TDD (202) 514-1888

                                 
    UNITED STATES INTERVENES IN SUIT AGAINST LUCAS INDUSTRIES
     WASHINGTON, D.C. -- The Department of Justice announced
today it has taken over a whistleblower case alleging that United
States subsidiaries of Lucas Industries, plc., the British
industrial giant, defrauded the Department of Defense by
concealing defects, fractures and imperfections in military parts
used in Navy fighter planes, Army rocket launchers and other
military equipment.
     The Department said Lucas falsified gear charts for a device
called the Airframe Mounted Accessory Drive (AMAD), a key
component of the Navy's front-line carrier based fighter, the
F/A-18 Hornet.  
     An inspection of a gearbox called the Azimuth Drive Unit
(ADU), which Lucas produced for one of the Army's premier
artillery systems, the Multiple Launch Rocket System, turned up
other problems.  The inspection showed that every one of 35 ADU
samples, which were part of a shipment of 69 Lucas was about to
send to the Army, contained major defects.  
     Frank W. Hunger, Assistant Attorney General in charge of the
Civil Division said, the qui tam suit, United States ex rel.
Copeland v. Lucas Western Inc. and Lucas Aerospace Inc., was
filed in September 1993 by Frederick C. Copeland, a former
machinist for the company.  The complaint was unsealed Wednesday
in U.S. District Court in Salt Lake City, Utah.  
     It alleged that Lucas Western (LWI) and its U.S.-based
parent, Lucas Aerospace Inc., falsified defective test results
and concealed imperfections and fractures in parts by plating
them with chrome, then defrauded the government by knowingly
shipping the non-conforming and defective parts to the Navy, Army
and Air Force.  LWI, based in Park City, Utah, manufactures
aerospace gearboxes, hoists and similar devices for the military. 
   The government is analyzing reports of accidents and mishaps
involving military equipment to determine whether the defective
parts were a factor.  LWI received approximately $400 million in
U.S. military contracts from fiscal 1987 through the present.
     A government investigation that began in July 1993 found
many false and fraudulent testing practices by LWI.  It said LWI
personnel, when finding one conforming gear in a lot with many
non-conforming gears, would run multiple gear charts from the
single good gear and attach the charts to gears that had not been
inspected.  
     LWI also falsified manufacturing and assembly inspections on
the AMAD's.  The government alleges that 100 percent of the
approximately 80 AMAD gearboxes subjected to tear down
inspections as part of the investigation contained parts with
major defects.  
     On January 9, 1995, LWI pleaded guilty to 37 counts of
making false certifications to the Department of Defense that 35
AMAD and two ADU gearboxes had been fully inspected in accordance
with the applicable contractual requirements, when, in fact, they
had not been.  LWI paid a criminal fine of $18.5 million as a
result of the investigation, which was conducted by the Defense
Criminal Investigative Service, the Naval Criminal Investigative
Service and the Army Criminal Investigation Command.
     The False Claims Act entitles the government to recover
three times its damages and a civil penalty of $10,000 for each
violation (31 U.S.C.  3729(a)).  The government plans to file an
amended complaint. 
     Under the qui tam amendments, a private citizen can file a
suit on behalf of the government and, if the suit is successful,
receive up to 30 percent of any money the government recovers. 
                              #####
95-107