The Justice Department announced today that Aerojet Rocketdyne Inc., based in El Segundo, California, has agreed to pay $9 million to settle accusations that it violated the False Claims Act by misrepresenting its compliance with cybersecurity standards in certain federal government contracts. Aerojet offers propulsion and power systems to the Department of Defense, NASA, and other federal agencies for launch vehicles, missiles, satellites, and other space vehicles.
The settlement resolves a lawsuit filed and litigated by former Aerojet employee Brian Markus against Aerojet under the qui tam or whistleblower provisions of the False Claims Act, which permit a private party (known as a relator) to file a lawsuit on behalf of the United States and receive a portion of any recovery. Mr. Markus and Aerojet achieved a settlement of the matter on the second day of trial. Mr. Markus’s part of the False Claims Act recovery will be $2.61 million.
“Whistleblowers with inside information and technical expertise can provide crucial assistance in identifying knowing cybersecurity failures and misconduct,” said Principal Deputy Assistant Attorney General Brian M. Boynton, head of the Justice Department’s Civil Division.
“The qui tam action brought by Mr. Markus is an example of how whistleblowers can contribute to civil enforcement of cybersecurity requirements through the False Claims Act,” said U.S. Attorney Phillip A. Talbert for the Eastern District of California.
On October 6, 2021, the Deputy Attorney General announced the Department’s Civil Cyber-Fraud Initiative, which aims to hold entities or individuals accountable who knowingly provide deficient cybersecurity products or services, knowingly misrepresent their cybersecurity practises or protocols, or knowingly violate obligations to monitor and report cybersecurity incidents and breaches.
Information on how to report cyber fraud can be found here.
The qui tam case is captioned United States ex rel. Brian Markus v. Aerojet Rocketdyne Holdings Inc., et al., Case No. 2:15-cv-02245-WBS-AC (E.D.Cal.).
The claims resolved by the settlement are allegations only and there has been no determination of liability.