Md. plant's ex-owner settles with U.S. over sending jobs to Mexico


The former owner of a Glen Burnie sonar-manufacturing operation has agreed to pay a $752,000 settlement to the federal government for sending defense contract jobs from Maryland south of the border to save money.

Ohio-based Gould Inc. will pay the government $435,000 that the company saved by having work done in Mexico on sonar systems for submarines and ships, plus interest and penalties, Richard D. Bennett, the U.S. attorney for Maryland, announced yesterday.

He said Gould defrauded the government by illegally sending production jobs to Mexico that should have been performed by Maryland workers. He said he decided to pursue civil charges against company officials rather than a criminal prosecution to recover the money the company gained through the fraud.

"We can't recover the loss of jobs, but we sure as heck can recover the profit they gained," Mr. Bennett said.

The settlement was negotiated by the U.S. attorney's civil division, headed by Juliet A. Eurich.

Michael Veysey, general counsel at Gould, could not be reached for comment yesterday at the company's headquarters in East Lake, Ohio.

Mr. Bennett said Gould submitted proposals to produce three sonar systems from December 1984 to August 1985. The company indicated that it would produce the sonar systems at its Ocean Systems Division in Glen Burnie.

But a routine government audit found that Gould had built an assembly plant in Juarez, Mexico. A probe by the Naval Investigative Service, the Defense Criminal Investigative Service and the FBI showed that part of the contract work had been done at that plant.

Assistant U.S. Attorney Donna Sanger said Mexican laborers performed assembly work at the Juarez plant for about half the wages an employee would have received in Glen Burnie.

Gould has since been purchased by Nippon Mining Co. Ltd. of Japan.

Martin Marietta Aero and Naval Systems bought Ocean Systems after the investigation began and was not a party in the settlement.

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