Lockheed Martin Agrees to Pay $29.5 Million to Resolve False Claims Act and Title VII Allegations Tied to DEI Practices

Lockheed Martin Agrees to Pay $29.5 Million to Resolve False Claims Act and Title VII Allegations Tied to DEI Practices

On November 3, the US Department of Justice (DOJ) and the US Equal Employment Opportunity Commission (EEOC) announced a two-part settlement totaling approximately $29.5 million with Lockheed Martin Corporation, a federal contractor headquartered in Bethesda, Maryland.

Lockheed will pay $22 million to the US to resolve allegations that it violated the False Claims Act (FCA) by falsely certifying since 2019 that it complied with the anti-discrimination requirements in its federal contracts while engaging in race- and sex-based employment practices. Lockheed will also pay approximately $7.5 million to more than 1,000 affected employees under an EEOC settlement resolving a 2025 Commissioner’s Charge filed by EEOC Chair Andrea Lucas alleging race discrimination against white employees in violation of Title VII of the Civil Rights Act. According to the DOJ, this is the largest class of workers to publicly recover under an EEOC settlement for alleged Title VII violations arising from or relating to DEI programs or practices.

The government’s allegations center on Lockheed’s “Compensation Adder” program, which, beginning in 2021, annually awarded an additional pay increase to the top 20% of employees in each business area. The government alleged that, before finalizing Comp Adder selections, Lockheed ran a statistical analysis to “flag” outliers based on the race and sex composition of the list, and that some HR personnel then pressured business group leaders to resolve race-related flags by removing non-minority employees and adding minority employees who had not been nominated. The government further alleged that Lockheed considered race or sex in hiring and promotion decisions to advance toward non-public workforce composition goals, including through a performance metric in its Management Incentive Compensation Plan and 2023 “aspirational plus” hiring goals, and that it offered certain training, mentoring, and leadership development programs on the basis of race or sex.

The FCA settlement also resolves a qui tam action filed by Tim Booher, a former Lockheed vice president, who will receive $4.4 million. The EEOC agreement requires Lockheed to comply with Title VII and Executive Order 14151, and to maintain a merit-based workplace in which race and sex are not considered in hiring, compensation, bonus, or promotion decisions. It also permits the EEOC to review Lockheed’s compliance during the agreement’s term. The DOJ noted that Lockheed cooperated in the resolution and that the US Department of Defense/War Office of Inspector General provided investigative assistance. Associate Attorney General Stanley E. Woodward Jr. described the matter as the DOJ’s fourth FCA settlement resolving allegations of racial discrimination against employees. The resolution follows other recent settlements under the Civil Rights Fraud Initiative, which the DOJ launched in May 2025.

The claims resolved by the settlement are allegations only. There has been no determination of liability.

Read the DOJ’s press release here.

The case is United States ex rel. Booher v. Lockheed Martin Corporation, No. 4:25-cv-00769-P, in the US District Court for the Northern District of Texas.

Defense and Aerospace Contractors ILC Dover and ILC Astrospace to Pay $13 Million to Resolve Cybersecurity FCA Allegations

On November 3, the DOJ announced that ILC Dover LP and ILC Astrospace LLC (collectively, ILC), defense and aerospace companies based in Frederica, Delaware, agreed to pay $13 million to resolve allegations that they violated the FCA by failing to comply with cybersecurity requirements in their contracts with the US Department of the Army, the Missile Defense Agency, and the National Aeronautics and Space Administration. Of that amount, $6.5 million is restitution.

From January 2018 to October 2024, ILC allegedly submitted claims for payment on these contracts despite knowing it had not complied with their cybersecurity requirements. Specifically, the government alleged that ILC (1) used a third-party company to store controlled unclassified information in the cloud from February 2023 to October 2024 without ensuring that the company met security requirements equivalent to the Federal Risk and Authorization Management Program Moderate baseline and complied with Department of Defense (DoD) requirements for cyber incident reporting and related obligations; (2) failed to develop, document, and periodically update a system security plan for each covered information system from January 2018 to March 2022 and from September 2022 to October 2024; (3) failed to fully implement all cybersecurity controls in National Institute of Standards and Technology (NIST) Special Publications 800-171 and 800-53 from January 2018 to October 2024; (4) failed to develop and implement plans of action and milestones to correct deficiencies in its systems from January 2018 to May 2019 and from January 2022 to September 2024; and (5) failed to submit current, compliant NIST SP 800-171 assessments to DoD from November 2020 to October 2024.

The settlement resolves a qui tam action filed by Philip Root, ILC’s former director of cybersecurity, who will receive $2.35 million.

The claims resolved by the settlement are allegations only. There has been no determination of liability.

Read the DOJ’s press release here and the settlement agreement here.

The case is United States ex rel. Root v. ILC Dover LP, et al., No. 25-cv-70, in the US District Court for the District of Delaware.

DOJ Announces ‘Operation Ghostbusters’ Indictments in Nationwide Ghost Student Financial Aid Fraud Linked to Kenyan Network

On October 29, the DOJ’s National Fraud Enforcement Division, along with the US Attorney’s Offices for the Eastern District of Virginia, the District of Nebraska, and the District of New Jersey, announced charges against five defendants and the seizure of more than $750,000 in cryptocurrency as the first results of Operation Ghostbusters. The nationwide investigation targets a scheme in which criminal actors used US citizens’ stolen identities to submit fraudulent Free Application for Federal Student Aid (FAFSA) forms and enroll “ghost students” in educational institutions, then diverted the resulting financial aid refunds to accounts controlled by foreign actors with the help of US-based money mules, including Kenyan nationals.

The announced cases include a criminal complaint in the District of New Jersey charging three alleged money mules (Mabed Patricia Utate-Alberto, Patricia Arisleydi Perez, and George Arturo Alfau Mendez) with conspiring with individuals in Kenya from about March 2021 through at least January 2026 to obtain more than $1 million in federal student aid funds, which they allegedly transferred to co-conspirators associated with a purported Kenyan safari company. In the Eastern District of Virginia, a grand jury indicted a Kenyan national on October 21 on charges of conspiracy to commit wire fraud and student aid fraud, alleging that the defendant received more than 700 fraudulent student aid refund deposits totaling approximately $1,439,548. In the District of Nebraska, a grand jury returned a 10-count indictment on October 19, charging Kenyan citizen Francis Mogambi with five counts of theft of government money and five counts of aggravated identity theft; he allegedly kept 30% of the proceeds and sent the rest to conspirators in Kenya.

According to the DOJ, the broader scheme involves well over $200 million. In September and October, investigators identified 830,840 potentially fraudulent Federal Student Aid (FSA) IDs relating to nearly $130 million and recommended that the US Department of Education disable them. The FBI Richmond Field Office opened the investigation following a referral from the Department of Education Office of Inspector General; there are now more than 40 open cases across 26 FBI field offices and more than 20 US Attorney’s Offices. With assistance from Kenyan law enforcement, investigators seized the cryptocurrency from an account belonging to a Kenyan national connected to the scheme, in what the DOJ called the first international seizure of its kind in the Fraud Division’s history. The announcement follows the DOJ’s launch of the Fraud Whistleblower Incentive Program, which covers fraud involving Department of Education programs, and which we discussed here in our October 26 post.

An indictment, information, or complaint is merely an allegation. All defendants are presumed innocent until proven guilty beyond a reasonable doubt in a court of law.

Read the DOJ’s press release here.

Tennessee Medical Practice Agrees to Pay $2.8 Million to Resolve FCA Allegations Over Improper Billing Practices

On November 2, the US Attorney’s Office for the Middle District of Tennessee announced that Premier Medical Group, P.C., a multi-physician medical practice based in Clarksville, Tennessee, agreed to pay $2.8 million to resolve allegations that it violated the FCA by fraudulently billing Medicare and TRICARE for services provided by non-physician practitioners.

From November 1, 2018, through May 31, 2023, Premier allegedly submitted claims to Medicare and TRICARE under physicians’ National Provider Identifiers for services performed by non-physician practitioners. In announcing the settlement, US Attorney Braden H. Boucek stated that “[f]ederal health care programs depend on providers following the rules and billing taxpayers accurately,” and that improper claims “undermine the integrity of programs that millions of Americans, including our service members and veterans, rely on for essential care.”

The US Attorney’s Office investigated the matter with assistance from the Defense Criminal Investigative Service of the DoD Office of Inspector General, which described the resolution as part of its efforts to safeguard TRICARE, the military’s primary health care program.

The claims resolved by the settlement are allegations only. There has been no determination of liability.

Read the press release from the US Attorney’s Office for the Middle District of Tennessee here.