The Journal Gazette
Sunday, January 21, 2018 1:00 am

Former BAE workers indicted over tuition-program fraud

JAMIE DUFFY | The Journal Gazette

The federal government has issued indictments against former BAE Systems workers, alleging they defrauded the company in a tuition assistance program.

The case was filed in the U.S. District Court in Fort Wayne in December, according to affidavits The Journal Gazette obtained Saturday.

Fort Wayne attorney Nikos Nakos said he is representing two of the defendants in the case.

The British defense contractor with operations near Fort Wayne's Baer Field that supplies Boeing with parts for use on military and commercial aircraft worldwide was told in 2016 that a group of employees had been taking advantage of the company's tuition assistance program by allegedly signing up for the courses, but not following through with the course. Instead, the money was allegedly pocketed, according to the case.

BAE issued a statement on the case: “When BAE Systems learned in 2016 that a group of employees had been abusing the tuition assistance program for financial gain, we referred the matter to the appropriate authorities and have continued to support the investigation.

“Because these actions are inconsistent with the behaviors and the high ethical standards our employees uphold in fulfilling their strong dedication and commitment to our customers, we terminated the employment of those individuals involved in these practices in 2016. The company also made changes to the tuition reimbursement procedures to ensure stronger governance for this important employee education and development tool.

“Because this is an ongoing legal matter, we have no further comment.”

Nakos said he was in the early stage of defense work.

“I find it strange they don't name a victim,” Nakos said. “They don't mention BAE in the indictment.”

The indictment filed in December said the company changed its program in 2013 to provide payment for the courses up front instead of waiting to reimburse the employee after the course was completed.

The employees had to provide proof of course registration, a tuition bill and a completion certificate at the end of the course. There was a grade requirement, too.

The company alleges that the employees involved in the scheme used the company software to submit fraudulent documentation for financial gain.

Each of the employees named in the suit faces four counts of fraud and, if convicted of all four counts, a term of imprisonment of not more than 20 years, a fine of not more than $250,000 or both, a term of supervised release of not more than three years and a $100 special assessment.


Because of a reporter's error, the lead paragraph and headline of this story was wrong. The federal government, not BAE Systems, has issued indictments against the former employees.

Sign up for our crime and courts newsletter

Sent daily when events warrant