Military contractor BAE fined $400M for fraud

BAE Systems, Europe's biggest military contractor, was ordered to pay a $400 million fine after admitting it conspired to defraud the U.S. government, the Justice Department said in a statement.

The London-based company pleaded guilty Monday in federal court in Washington to violating the U.S. Foreign Corrupt Practices Act by making false statements and breaching U.S. regulations covering the export and international trafficking of arms, prosecutors said.

The fine is one of the largest for violating U.S. export-control laws, according to the agency. "The actions of BAE Systems impeded U.S. efforts to ensure international trade is free of corruption and to maintain control over sensitive U.S. technology," Acting Deputy Attorney General Gary G. Grindler said in the statement.

Prosecutors charged the company Feb. 4 with failing to disclose payments made in connection with the leasing by the governments of the Czech Republic and Hungary of Gripen fighter jets from Sweden. The jet was built by Saab and marketed by BAE until 2005.

The company also provided "substantial benefits" to a Saudi Arabian official "who was in a position of influence regarding sales of fighter jets, other defense materials and related support services," the U.S. said.

The Foreign Corrupt Practices Act outlaws companies with operations in the U.S. from paying bribes to foreign officials for business. While BAE has a Maryland-based subsidiary, none of the unlawful conduct involved that unit, the Justice Department said.