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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of Earliest Event Reported): July 27, 1995
FREQUENCY ELECTRONICS, INC.
(Exact name of registrant as specified in its charter)
Delaware 0-8061 11-1986657
(State or other jurisdiction (Commission (I.R.S. Employer of
incorporation) File Number) Identification No.)
55 Charles Lindbergh Blvd., Mitchel Field, NY 11553
(Address of principal executive offices) (Zip Code)
(516) 794-4500
(Registrant's telephone number, including area code)
None
(Former name, former address and former fiscal year, if changed since last
report)
Page 1 of 4 pages
ITEM 5. OTHER EVENTS.
On July 27, 1995 registrant was served with a summons and complaint
(the "Complaint") by way
of a qui tam action instituted by a former employee of registrant in the
United States District Court for the Eastern District of New York,
Case Number CV-93-4750, entitled UNITED STATES OF AMERICA, ex
rel. HOWARD B. GELDART, Plaintiff-Relator, vs. FREQUENCY ELECTRONICS, INC.,
MARKUS HECHLER, HARRY NEWMAN, MARVIN NORWORTH, and STEVEN CALCEGLIA,
Defendants (the
"Action"). A qui tam action is one in which an individual may, under
certain circumstances, sue one or more third persons in behalf of the
United States Government (the "Government") for damages and other relief.
The Action was instituted pursuant to the provisions of the
United States False Claims Act (the "Act"). Under the provisions of the Act
the Government is permitted to assume the prosecution of the
Action and has exercised this prerogative in this matter. The defendants are
registrant and four individuals (collectively the "Defendants"),
each of which individuals were employees of registrant during the period of
time in which the events complained of in the Complaint
occurred and two of which individuals, Messrs.
Hechler and Newman, were also officers of registrant during such period of
time.
The Complaint contains a series of allegations, the substance of which is as
follows:
1. Registrant is alleged to have been party to (1) an ongoing multiple-year
procurement program for Advance Medium Range Air to Air Missiles ("AMRAAMS")
in which
registrant, as the sole source, supplied sophisticated oscillator equipment
(the "Oscillator Equipment") to two prime
Government contractors and (2) an ongoing program for the replacement of
cesium standard parts (the "Cesium
Parts") supplied to departments and agencies of the Government.
2. Defendants, with respect to the abovementioned goods and services alleged
to have
been provided to the Government by registrant, are alleged to have (1) caused
to be presented to the Government false and
fraudulent claims grossly overstating registrants's labor and material costs
thereof, (2) caused to be made or used a false
record or statement to get a false and fraudulent claim for the price thereof
to be paid or approved by the Government, and (3)
conspired to defraud the Government by getting false and fraudulent claims
therefor allowed or paid.
3. Defendants' asserted wrongdoing is alleged to have caused the Government
to
sustain damages in an amount in excess of $10 million with respect to the
Oscillator Equipment
and in an amount in excess of $5 million with respect to the Cesium Parts.
4. The Government is alleged to be entitled to recover from the Defendants
(1) treble
the amount of damages sustained by it as aforesaid, (2) not less than $5,000
nor more than $10,000 for each separate alleged
act of wrongdoing or conspiracy, (3) the costs of bringing the Action, and
(4) with, or alternatively to, plaintiff Geldart,
reasonable expenses, including attorneys' fees and costs, incurred in the
prosecution of the Action.
Registrant denies the truth, accuracy and bona fides of plaintiff Geldart's
inculpatory allegations
made against it in the Complaint and, has determined vigorously to defend
the Action. No opinion can be given as to the outcome of the
Action or of any such other claims or assertions therein by registrant.
Registrant has not yet responded to the Complaint or commenced
discovery or motion proceedings.
Commencing in late December 1993, registrant was served at various times
with a series of federal
Grand Jury subpoenas. Registrant has never been advised by the U.S.
Attorney's office as to the theory of the Grand Jury investigation. In
that the subpoenas called for the production of various finance, accounting
and other documents relating to AMRAAMS, registrant supposes
that the investigation relates to finance and/or pricing matters with
respect to its AMRAAM subcontract work for the US Department of
Defense. Registrant considers the investigation to be wholly unjustified.
However, the events following the commencement of the service
of these subpoenas including commencement of the Action, make it appear
that the subject matter of the Grand Jury Investigation and the Action may
be related. Registrant regards its exposure to charges or claims
of violations of U.S. Government laws and regulations as extremely serious
and recognizes that such charges or claims could have a
material adverse effect on it. In the event of an indictment and conviction
of registrant in this matter, the Government could seek fines,
penalties, forfeitures, restitution, treble damages and other conditional
relief. Upon indictment alone, registrant would also be subject to
the suspension and debarment regulations of the Department of Defense.
To date, no criminal charges have been made against registrant
regarding the supposed subject matter of this Grand Jury investigation.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly
caused this report to be signed on its behalf by the undersigned
hereunto duly authorized.
FREQUENCY ELECTRONICS, INC.
By /s/ Dawn Rhodes Johnston
DAWN RHODES JOHNSTON, Vice
President
Dated: August 24, 1995
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