July 12, 2022. The Department of Justice has announced the final settlement in the Aerojet Rocketdyne cyber-fraud False Claims Act case, including a relator payday of $2.61 million. Under the terms of the settlement, the rocket propulsion and power systems manufacturer paid $9 million to settle allegations of cyber-fraud. The whistleblower was a former senior director of cybersecurity, compliance, and controls of Aerojet Rocketdyne. For the information he provided, the whistleblower received approximately 29% or $2.61 million of the settlement.
As an executive with insider knowledge of the company’s conduct related to cybersecurity controls in government contracts, the whistleblower or relator was well-positioned to notice that something was amiss. Relator alleged that the propulsion systems contractor misrepresented the extent to which it complied with the cybersecurity requirements of its contracts with the Air Force, Army, Missile Defense Agency, and prime contractors. The United States declined to intervene in the qui tam lawsuit that Relator filed, but he pursued the case. The case became noteworthy in 2019 when a U.S. District Judge allowed the case to proceed because the contractor’s “compliance with the relevant rules for safeguarding information was material to the government’s decision to pay Aerojet for its allegedly false claims.”
Government contractors have an obligation to comply with the cybersecurity requirements set forth in the contracts on which they...
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