Aerospace company pays $2.5M after fraud accusations

Dec 7 2011 - 11:41pm

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Aerospace Corp. headquarters can be seen in El Segundo, Calif., last year. Aerospace paid $2.5 million last week to settle Justice Department allegations that the company defrauded the Air Force for several years by billing for employee William Grayson Hunter’s time when it knew he was rarely at work, the U.S. Attorney’s Office said this week. (Brian van der Brug/Los Angeles Times/MCT)
Aerospace Corp. headquarters can be seen in El Segundo, Calif., last year. Aerospace paid $2.5 million last week to settle Justice Department allegations that the company defrauded the Air Force for several years by billing for employee William Grayson Hunter’s time when it knew he was rarely at work, the U.S. Attorney’s Office said this week. (Brian van der Brug/Los Angeles Times/MCT)

LOS ANGELES -- Few aerospace employees had it as good as William Grayson Hunter.

He was paid simultaneously to work full time at two aerospace firms but rarely went to work, instead spending his days at bars, amusement parks and movie theaters, according to the U.S. Attorney's Office in Los Angeles.

One of his employers, Aerospace Corp., in El Segundo, Calif., paid $2.5 million last week to settle Justice Department allegations that the company defrauded the Air Force for several years by billing for Hunter's time when it knew he was rarely at work, the U.S. Attorney's Office said this week.

Hunter would occasionally show up at Aerospace in the morning and work for an hour before heading to his second job at Analytical Services & Materials Inc. -- or out to have some fun, said Assistant U.S. Attorney Howard Daniels.

In some instances, Hunter billed his two employers for more than 24 hours of work in a single day, Daniels said. He allegedly ran the scheme from 2003 until 2008.

Hunter died in August 2010 of natural causes while under criminal investigation, Daniels said. He was 56.

In addition to submitting fraudulent time cards, Hunter falsely claimed to hold a doctorate from Oxford University in England when he had only a high school education, Daniels said.

Aerospace released a statement that said it had been duped by its former employee and had taken steps to make sure it wouldn't happen again. The company said it discovered the fraud in 2008, when a third company inquired about Hunter's security clearance.

"This person was hired before we had sophisticated methods to verify international degrees," Aerospace spokeswoman Pamela Keeton said in a statement. "He failed to disclose his other employment as required.

"In committing both of these acts, he broke the trust we place in our employees. Nothing in our culture condones this type of behavior."

Keeton also said the position that Hunter held "gave him a lot of autonomy and discretion. Unfortunately, he abused this privilege."

Hunter had a base salary of $137,000 during his final year at Aerospace, where he worked as a software engineer, Daniels said. His salary at Analytical Services & Materials was not available. Daniels declined to say whether that company was also under investigation.

The fraud was discovered by a third employer, Tybrin Corp., which reported it to NASA's inspector general, Daniels said. Tybrin had planned to employ Hunter under a contract with NASA when it uncovered problems in his background.

Hunter had received "mixed reviews" from supervisors, Daniels said.

"Some of his superiors thought his work was very poor," the prosecutor said. "He had very poor writing skills. But there were some people who thought his technical knowledge was up to snuff."

Federal investigators reviewed Hunter's credit card bills, which revealed he had been spending his time at a Van Nuys bar, enjoying trips to Disneyland and going to movie theaters, Daniels said.

"I've been doing this a long time, and this is the first time I've seen this kind of fraud," Daniels said. "He was pretty unique."

Aerospace was culpable because it knew that Hunter was not working the hours he submitted on his time card, Daniels said. The company profited from its employment of Hunter because it billed the government a higher hourly rate than it paid him, Daniels said.

"They were well aware of his time card fraud," Daniels said. "The reason we're recovering money from them is, they didn't do anything about it."

Aerospace, which gets most of its funding from the Pentagon, oversees many of the nation's most classified programs, including the development of multibillion-dollar spy satellites and the rockets that lift them into space.

It has a sprawling 41-acre campus of low-rise office buildings in El Segundo, where thousands of scientists and Air Force officers toil in secrecy.

The firm also provides consultation and advice to both the government and the defense industry on how to best develop spacecraft. In all, about 90 percent of its budget comes from military and intelligence contracts. The rest comes from civilian government agencies such as NASA.

Despite proposed cutbacks in Pentagon spending, Aerospace's budget increased to about $900 million in fiscal 2011.

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