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Telephonics to pay $4.3M to settle overbilling charges

A Farmingdale manufacturer, which did not admit wrongdoing, was accused of overcharging federal government for Army, Navy systems.

Telephonics used

Telephonics used "inflated" price estimates and improper labor rates when calculating invoices, the U.S. Attorney's Office said. Photo Credit: Steve Pfost

Telephonics Corp., a Farmingdale-based defense contractor, has agreed to pay $4.3 million to settle charges that it overbilled the federal government on U.S. Army and Navy contracts, the Department of Justice announced Friday.

Telephonics did not admit wrongdoing in the settlement. The company didn’t return calls seeking comment Friday.

Telephonics, a unit of Manhattan-based Griffon Corp., provided inaccurate cost data for defense systems between 2004 and 2007, according to the U.S. Attorney’s Office in the Eastern District of New York.

Telephonics overbilled the government as a subcontractor on the Army’s Warlock Systems to counter improvised explosive devices and the Navy’s Light Airborne Multi-Purpose [radar] System, the U.S. Attorney’s Office said.

“Defense contractors who enrich themselves at taxpayers’ expense by failing to accurately represent the costs of their goods and services will be held fully accountable,” acting U.S. attorney Bridget M. Rohde said in a statement.

The Warlock Systems are installed on vehicles to interrupt wireless transmissions that would trigger explosives and are used in Afghanistan and Iraq. LAMPS is used on Navy helicopters.

Telephonics used “inflated” price estimates and improper labor rates when calculating invoices, the U.S. Attorney’s Office said.

The investigation was conducted by the Defense Criminal Investigative Service, the U.S. Army Criminal Investigation Command and the Naval Criminal Investigative Service.

“Fraud is never a victimless crime,” NCIS Northeast Field Office special agent-in-charge Leo Lamont said in a statement. “The victims are not just our men and women in uniform, but all American taxpayers.”

Griffon, which reported fourth quarter results on Thursday, said that its Telephonics unit posted revenue of $144 million, an 11 percent increase compared to the 2016 period. The company said the increase was driven by sales of radar and electronic countermeasure systems.

Griffon shares fell 5.3 percent Friday to close at $22.50. The stock has gained 5.4 percent in the past 12 months.

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