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Orbital's federal investigation ends, civil suit ongoing
Orbital Sciences Corp., a Dulles-based aerospace technology company, received news last week that the U.S. Attorney's Office for the district of Arizona has terminated a criminal investigation on the company. A related civil lawsuit, however, is continuing.
The federal investigation began in February 2005, when former employee W. Austin Sallade filed suit, claiming that Orbital “submitted false and fraudulent claims for payment to the U.S. Government by misclassifying and mischarging costs and by engaging in defective pricing,” according to filed documents.
Sallade, the former senior director of finance for Orbital’s Launch Systems Group in Arizona, brought suit under the False Claims Act, a federal law allowing people who are not affiliated with the government to file actions against federal contractors, claiming fraud against the government -- otherwise known as whistle-blowing.
Kenneth Martin, Sallade’s lawyer, said he did not know why the investigation was terminated. Neither Sandy Raynor, public affairs officer with the U.S. Attorney's Office in Arizona, nor Barron Beneski, vice president of public relations at Orbital, was able to comment on the case.
Even though the Justice Department has terminated its investigation, Orbital still faces a civil lawsuit with Sallade.
Martin said there are still four outstanding counts that are being brought forward with the civil lawsuit. These counts include allegations of misclassification of costs and charging.
“The dismissal [of the federal criminal investigation] neither lessens or strengthens the litigant's case,” said Thomas Dunlap, an attorney with Dunlap, Grubb and Weaver in Leesburg who is not affiliated with the case.
Explaining the process, Dunlap said that in a civil suit, the litigant is not held to as high a standard of proof as is the government.
“The government has to prove beyond reasonable doubt,” Dunlap said. A litigant in a civil suit has to prove only that claims are “more likely than not” to have happened, he said.
The original complaint filed in 2005 stated “as a result of allegedly wrongful conduct, the United States suffered damages for three times the amount of alleged damages, plus civil penalties of up to $10,000 for each false claim and punitive damages.”
Dunlap added, “Dropping the criminal charges, though, does not mean that it’s over.”
While the Justice Department has dropped the investigation, dismissing all counts alleged against Orbital, it could intervene in the civil case in the future under court permission.
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