Talley Industries, Inc. and Consolidated Subsidiaries - Page 7




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          contract claims.                                                            
          Talley and Stencel were represented by, among others,                       
          private attorneys William J. Kilberg (Mr. Kilberg) and John                 
          Chierichella, and by Mark S. Dickerson, Talley's secretary and              
          general counsel.                                                            
               During a November 18, 1985, meeting in Asheville, North                
          Carolina, the Government provided Talley and Stencel with a                 
          schedule (the Asheville damages schedule) summarizing the                   
          Government's estimate of its damages during 1984 attributable to            
          the specific acts of labor mischarging described in the                     
          indictment as well as the additional labor mischarging that the             
          Government suspected in Stencel's four major departments.  The              
          Asheville damages schedule included an estimate of total damages            
          for 1984 of $205,699 and an estimate of forfeitures under the FCA           
          of $850,000 (425 alleged acts of labor mischarging multiplied by            
          $2,000).  The Asheville damages schedule did not include an                 
          estimate of the Government's incidental damages, such as the                
          costs associated with the investigation, the suspension and                 
          debarment proceedings, the grounding of any Navy aircraft for               
          lack of replacement parts, or the Government's loss of use of               
          funds improperly paid to Stencel.                                           
               Although the Government believed that labor mischarging had            
          occurred as early as 1979, neither party examined or analyzed               
          Stencel's billing data or other records for the years 1979 to               






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