Unisys to admit guilt, pay fine of $190 million in arms fraud


WASHINGTON -- Unisys Corp. has agreed to plead guilty to fraud and bribery charges arising from Operation Ill Wind, the wide-ranging probe of defense procurement practices, and will pay $190 million in fines and forfeited profits, government and company officials said yesterday.

The settlement, which includes the largest defense fraud penalty ever, is to be filed today in U.S. District Court in Alexandria, Va., officials said.

The Pennsylvania-based company is expected to plead guilty to charges that it employed a variety of schemes to rig bids on lucrative defense contracts, create secret slush funds, hire corrupt consultants and funnel bribes to government officials.

The charges will be spelled out in an inch-thick statement of facts detailing a web of influence-buying and high-level corporate espionage designed to cheat competitors and defraud the government in a variety of Navy programs.

The settlement marks the culmination of a four-year investigation by the Department of Justice and the Naval Investigative Service into bribery and corruption in Pentagon weapons-buying that has yielded criminal convictions of more than 50 individuals and corporations. Moreover, the government has collected more than $230 million in fines and penalties, in addition to the Unisys settlement.

Unisys has been negotiating the plea agreement for more than a year. Company spokesman J. Peter Hynes confirmed yesterday that the company had reached final agreement with the government.

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