A Dallas defense contractor has agreed to pay $3.8 million in criminal fines and restitution for falsifying the test results of field radios supplied to the Army, the Justice Department said yesterday.
E-Systems Inc. will plead guilty to three criminal charges alleging it conspired to defraud the government, the department said. A statement of facts, filed in support of the plea, said the company used defective testing practices, repeatedly altered test and performance records and concealed repairs and defects in the radios so the Army would accept them.
The contractor also settled a civil suit with the government, agreeing to pay $850,000 in damages, the department said.
Earlier this month, three former managers and a former supervisor at E-Systems Memcor Division in Florida were charged with falsifying records and test records on the radios. According to the indictment, the employees switched test records between radios to conceal failures and created results for untested radios, working evenings and weekends to conceal the deceptive practices. The four employees are awaiting trial.
An E-Systems production supervisor was convicted of perjury in January for denying the cover-up activity. She is serving a 16-month prison sentence.
The investigation began after the Army terminated its contract for the radios in 1985. E-Systems had been building the radios, described as "the principal vehicular-borne communications system used by soldiers and commanders in the field" since 1969, the department said.