United Technologies to Pay U.S. $473 Million, Judge Says

United Technologies Corp. (UTX) must pay the U.S. $437 million for fraud and violations of the federal False Claims Act after overbilling for jet engines it supplied to the military, a judge said.

The company must also pay additional interest dating back as far as 1987, U.S. Judge Thomas Rose in Dayton, Ohio, said yesterday. He told the government to calculate the interest due.

The U.S. sued United Technologies’ Pratt & Whitney unit in 1999, alleging it knowingly made false claims in a multibillion-dollar contract to produce engines for F-15 and F-16 fighter jets. Rose said the government overpaid for six years that it bought the engines from United Technologies.

“The government should not have paid the amounts that the government proved it paid as a direct result of United Technologies’ fraud,” Rose said in a 16-page order.

In 2008, after a nonjury trial, Rose had initially rejected the U.S. bid for overpayment damages, while fining Pratt & Whitney $7 million for false claims. The U.S. Court of Appeals in Cincinnati sent the case back to Rose in 2010, reversing his finding that the government sustained no actual damages.

Rose said he focused on instructions from the appeals court in determining damages in yesterday’s order.

John Moran, a spokesman for Hartford, Connecticut-based United Technologies, didn’t immediately return calls seeking comment on the judge’s decision.

The case is U.S. v. United Technologies Corp., 99-cv-00093, U.S. District Court, Southern District of Ohio (Dayton).

To contact the reporter on this story: Margaret Cronin Fisk in Detroit at mcfisk@bloomberg.net

To contact the editor responsible for this story: Michael Hytha at mhytha@bloomberg.net.

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