UNITED STATES OF AMERICA ex rel. DIMITRI YANNACOPOULOS v. General Dynamics

In the
United States Court of Appeals
For the Seventh Circuit
No. 09-3037
UNITED STATES OF AMERICA ex rel.
DIMITRI YANNACOPOULOS,
Plaintiff-Appellant,
v.
GENERAL DYNAMICS, et al.,
Defendants-Appellees.
Appeal from the United States District Court
for the Northern District of Illinois, Eastern Division.
No. 03 C 3012—Robert W. Gettleman, Judge.
ARGUED SEPTEMBER 21, 2010—DECIDED JULY 26, 2011
Before BAUER, SYKES, and HAMILTON, Circuit Judges.
HAMILTON, Circuit Judge. Relator Dimitri Yannacopoulos
brought this qui tam suit under the federal False
Claims Act. He alleges that defendants General
Dynamics Corporation and Lockheed Martin Corpora-
tion violated the False Claims Act in a number of ways
in a sale of F-16 fighter jets to Greece, which paid for
the jets with money borrowed from the United States.

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2 No. 09-3037
The district court granted summary judgment against
Yannacopoulos, finding that no reasonable jury could
find in his favor on any of his claims. After reviewing
the voluminous record, we agree with the district court
that Yannacopoulos has not shown the existence of a
genuine issue of material fact. We affirm.
I. Background
In January 1987, General Dynamics agreed to sell to
the government of Greece 40 F-16 fighters, as well as
related services and equipment. The initial terms of this
sale were set forth in a Letter of Intent dated March 6,
1985, to which was attached a draft contract that
reflected the status of the parties’ negotiations at the
time. The terms of the Greek sale were set out in “Con-
tract Number 5/86 for the Direct Sale of F-16 C/D Aircraft”
(“Contract 5/86”), executed on January 12, 1987, as well
as in a number of contract amendments executed over
the next several years. The total price of the Greek sale
was set at $616,497,013, with a payment schedule set
out in Annex AG to Contract 5/86.
The sale by General Dynamics to Greece was con-
ducted under the United States’ Foreign Military Fi-
nancing (“FMF”) program. Under that program, Greece
bought the fighters and related services directly from
General Dynamics, but it did so using funds that were
loaned by the United States government. General Dynam-
ics would submit invoices for payment to the United
States, which then paid General Dynamics directly and
assessed the amount of that payment against Greece’s

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No. 09-3037 3
In 1998, the Department of Defense renamed the DSAA as 1
the Defense Security Cooperation Agency. We use here the
original DSAA designation in the record.
trust account. The details of this arrangement were over-
seen by the Defense Security Assistance Agency (“DSAA”),
an agency of the United States Department of Defense,
which reviewed Contract 5/86 and gave the approvals
needed to use FMF funds to finance the Greek sale.1
Several years before the Greek sale, Yannacopoulos
entered into an agreement to help a General Dynamics
telecommunications subsidiary market commercial tele-
phone equipment in Greece. That consulting arrange-
ment was maintained between the parties until Octo-
ber 1983, when General Dynamics released Yannacopoulos
for undisclosed reasons. When Yannacopoulos later
learned that Greece had agreed to purchase F-16s
from General Dynamics, he claimed that he was entitled
to $39 million in commissions on the sale, which
General Dynamics refused to pay. Yannacopoulos
then sued General Dynamics. A jury rejected
Yannacopoulos’ claims, and the Eighth Circuit affirmed.
See Yannacopoulos v. General Dynamics Corp., 75 F.3d 1298
(8th Cir. 1996).
Relying, at least in part, on information obtained in
the course of that lawsuit against General Dynamics,
Yannacopoulos filed this suit against General Dynamics
and Lockheed alleging numerous violations of the
False Claims Act in relation to the Greek sale. After
extensive discovery, the defendants moved for partial

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4 No. 09-3037
In 2009, Congress amended the False Claims Act, Pub. L. 2
111-21, § 4(a)(1), making those amendments generally ap-
plicable only to conduct occurring on or after May 20, 2009,
Pub. L. 111-21, § 4(f). The one exception is the amendment
to section 3729(a)(1)(B), which applies to cases, such as this,
that were pending on or after June 7, 2008. Id.
summary judgment. The district court granted the de-
fendants’ motion, United States ex rel. Yannacopoulos v.
General Dynamics, 2007 WL 495257 (N.D. Ill. Feb. 13,
2007), but later reconsidered its grant of summary judg-
ment regarding Yannacopoulos’ claim based on the
Economic Price Adjustment clause proposed for Con-
tract 5/86, United States ex rel. Yannacopoulos v. General
Dynamics, 2007 WL 1597670 (N.D. Ill. May 31, 2007).
General Dynamics filed a renewed motion for sum-
mary judgment on that claim, and both defendants
moved for summary judgment on the remainder of
Yannacopoulos’ claims. The district court granted the
defendants’ motions in their entirety. United States ex rel.
Yannacopoulos v. General Dynamics, 636 F. Supp. 2d 739
(N.D. Ill. 2009). This appeal followed.
II. The False Claims Act and the Standard of Review
The False Claims Act makes it unlawful to knowingly
(1) present or cause to be presented to the United States
a false or fraudulent claim for payment or approval,
31 U.S.C. § 3729(a)(1) (2006); (2) make or use a false
record or statement material to a false or fraudulent
claim, § 3729(a)(1)(B); or (3) use a false record or state-2
ment to conceal or decrease an obligation to pay money

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No. 09-3037 5
to the United States, § 3729(a)(7) (2006). Under the Act,
private individuals such as Yannacopoulos, referred to
as “relators,” may file civil actions known as qui tam
actions on behalf of the United States to recover
money that the government paid as a result of conduct
forbidden under the Act. Glaser v. Wound Care Consultants,
Inc., 570 F.3d 907, 912 (7th Cir. 2009). As an incentive
to bring suit, a prevailing relator may collect a sub-
stantial percentage of any funds recovered for the
benefit of the government. Id. To establish civil liability
under the False Claims Act, a relator generally must
prove (1) that the defendant made a statement in order
to receive money from the government; (2) that the state-
ment was false; and (3) that the defendant knew the
statement was false. E.g., United States ex rel. Gross v.
AIDS Research Alliance-Chicago, 415 F.3d 601, 604 (7th
Cir. 2005).
In this appeal, Yannacopoulos claims that the
defendants made a number of false statements to the
United States to obtain payments for the Greek sale. We
consider them in turn. First, he contends that General
Dynamics lied about its use of funds loaned by the
United States to capitalize a Greek business develop-
ment company, as required by the terms of Contract 5/86.
Next, he says that General Dynamics failed to
disclose promptly to the United States its decision
to delete the Economic Price Adjustment clause from
the draft contract. Yannacopoulos also argues that
General Dynamics made misrepresentations relating to
Contract 5/86’s provisions concerning spare part
purchases and an ill-fated “depot program.” Finally,

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6 No. 09-3037
The False Claims Act was enacted in 1863, in the midst of the 3
Civil War, in response to flagrant frauds committed against
the government, such as selling defective rifles and artillery
shells filled with sawdust instead of explosives. See J. Randy
Beck, The False Claims Act and the English Eradication of Qui
Tam Legislation, 78 N.C. L. Rev. 539, 555 (2000). The claims
here, arising from a complex, long-term contract involving
many contingencies, allowances, predictions, and amend-
ments, are considerably more difficult to prove than those
simpler frauds.
he claims that after Lockheed assumed General Dynamics’
obligations under Contract 5/86, Lockheed made a
number of misrepresentations in two amendments to
the contract.3
We review de novo the district court’s grant of sum-
mary judgment against Yannacopoulos on these claims.
Omnicare, Inc. v. UnitedHealth Group, Inc., 629 F.3d 697,
705 (7th Cir. 2011). Summary judgment is appropriate
when the pleadings and submissions in the record
indicate the absence of any genuine issues of material
fact, so that the moving parties are entitled to judgment
as a matter of law. Midwest Imports, Ltd. v. Coval, 71 F.3d
1311, 1317 (7th Cir. 1995). As the party opposing sum-
mary judgment, Yannacopoulos is entitled to the benefit
of any reasonable inferences in his favor that are sup-
ported by the record. Jakubiec v. Cities Service Co., 844
F.2d 470, 471 (7th Cir. 1988). We may affirm the district
court’s grant of summary judgment only if, upon viewing
the record in this light, no reasonable jury could have
rendered a verdict in Yannacopoulos’ favor. Wilson v.
Williams, 997 F.2d 348, 350 (7th Cir. 1993).

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No. 09-3037 7
In op posing sum m ary judgm ent, however,
Yannacopoulos could not “rest on the allegations in
the pleadings,” but was required to present “evidentiary
material which, if reduced to admissible evidence,
may allow him to carry his burden of proof.” Reed v.
AMAX Coal Co., 971 F.2d 1295, 1299 (7th Cir. 1992). In
other words, reversal would be appropriate only if
Yannacopoulos’ evidence is sufficient to enable a rea-
sonable jury to think it more likely than not that the
defendants violated the False Claims Act. With that
standard in mind, we turn to the merits of the claims.
III. The HBDIC Claim
Yannacopoulos’ primary claim on appeal concerns
General Dynamics’ involvement in establishing the Hel-
lenic Business Development and Investment Company
(“HBDIC”) as part of the F-16 sale to Greece. Under
Article 35 of Contract 5/86, General Dynamics agreed
to “establish [HBDIC] in Greece . . . for the purpose of
developing and implementing Business Development
projects.” HBDIC was to be incorporated in Greece,
with General Dynamics as the majority shareholder
and the Greek government as a minority shareholder.
Once incorporated, HBDIC was to act as a venture
capital company, providing seed money and loans to
new companies in Greece.
General Dynamics agreed to capitalize HBDIC with
a total of $50 million over the course of ten years after
the signing of Contract 5/86. General Dynamics also

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8 No. 09-3037
agreed to provide three “in-country management and
coordination personnel” for the initial ten years of
HBDIC’s existence. General Dynamics admits that it
paid these amounts, at least in part, using profits it
made under Contract 5/86. After five years of operation,
half of HBDIC’s profits were to be paid out as dividends
to its shareholders. After fifteen years, HBDIC was to be
dissolved (unless its funds ran out before that time and
absent action to the contrary by General Dynamics
and/or Greece), at which time all of its remaining assets
up to $50 million, as well as half of any assets over
that amount, were to revert to Greece.
Before the United States DSAA would release funds to
finance the Greek sale, it required General Dynamics to
execute a “Contractor’s Certification Agreement with
Defense Security Assistance Agency.” General Dynamics
executed two such agreements with the DSAA, one
in February 1986 relating to the draft contract, and
another in February 1987 relating to Contract 5/86 (collec-
tively, the “Certification Agreement”). In the Certifica-
tion Agreement, General Dynamics made a number of
representations regarding the Greek sale. We discuss
the relevant ones below.
Between February 1987 and August 1990, General
Dynamics submitted a number of invoices to the United
States for payment. On each invoice, General Dynamics
certified that, “to the best of [its] knowledge and belief
this invoice is in accordance with” Contract 5/86 and
the Certification Agreement. These certifications are sig-
nificant because a mere breach of contract does not

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No. 09-3037 9
Yannacopoulos also argues that the Arms Export Control Act, 4
22 U.S.C. § 2751 et seq., as interpreted by the DSAA, forbids the
use of United States funds for indirect offsets such as HBDIC.
In his reply brief, however, he admits that General Dynamics
“never certified compliance with [that statute]. . . . Of course
it did not.” But if General Dynamics never certified compliance
with the Arms Export Control Act, then any violations of that
act would not support a claim under the False Claims Act.
See United States ex rel. Main v. Oakland City University, 426
F.3d 914, 917 (7th Cir. 2005); United States ex rel. Lamers v. City
of Green Bay, 168 F.3d 1013, 1020 (7th Cir. 1999) (“The FCA is
a fraud prevention statute; violations of . . . regulations are not
fraud unless the violator knowingly lies to the government
about them.”); United States ex rel. Thompson v. Columbia/HCA
(continued...)
give rise to liability under the False Claims Act. See
United States ex rel. Garst v. Lockheed-Martin Corp., 328
F.3d 374, 378 (7th Cir. 2003). If the breaching party
falsely claims to be in compliance with the contract to
obtain payment, however, there may an actionable false
claim. United States ex rel. Lemmon v. Envirocare of Utah,
Inc., 614 F.3d 1163, 1168 (10th Cir. 2010) (describing
such a statement as a “legally false request for pay-
ment”), citing United States ex rel. Conner v. Salina Regional
Health Center, Inc., 543 F.3d 1211, 1217 (10th Cir. 2008).
Here, Yannacopoulos argues that General Dynamic’s
certifications were false because General Dynamics al-
legedly violated both (1) Contract 5/86 and (2) the Certif-
ication Agreement when it “charged the HBDIC costs
as part of the [Contract 5/86] price.” We address each
alleged violation in turn.4

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10 No. 09-3037
(...continued) 4
Healthcare Corp., 125 F.3d 899, 902 (5th Cir. 1997); United States ex
rel. Hopper v. Anton, 91 F.3d 1261, 1266 (9th Cir. 1996) (“Viola-
tions of laws, rules, or regulations alone do not create a cause
of action under the FCA. It is the false certification of compliance
which creates liability when certification is a prerequisite to
obtaining a government benefit.”). To the extent Yannacopoulos’
claims are based on the theory that General Dynamics
violated the Arms Export Control Act, summary judgment
was proper.
For ease of reference, we refer to the HBDIC stock and man- 5
agement personnel collectively as the “HBDIC costs.”
A. Contract 5/86
Yannacopoulos first argues that General Dynamics’
certifications of compliance with Contract 5/86 were
false because General Dynamics breached that contract
by passing on the costs of its HBDIC investment to the
United States, as lender to Greece. In particular, he
claims that General Dynamics breached Article 9.4 of
the contract, under which General Dynamics “confirm[ed]
that the material for which payment is requested are
United States source end products.” Yannacopoulos
interprets this provision to forbid General Dynamics
from incorporating its expenditures on HBDIC stock
and management personnel into the contract price be-
cause, he insists, those expenditures were not for
“United States source end products.”5
For the sake of argument, we will assume that
Yannacopoulos is correct that the HBDIC costs were not

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No. 09-3037 11
“United States source end products” within the meaning
of Article 9.4. That is not enough, however, to show that
General Dynamics breached the terms of that article,
under which General Dynamics confirmed only that the
“material for which payment is requested” was in fact
“United States source end products.” In other words,
General Dynamics could have falsely certified com-
pliance with the contract only if the HBDIC costs con-
stituted “material” within the meaning of Article 9.4.
Article 9.4 did not have such a broad reach. That article
required General Dynamics to confirm the U.S. origins
of the material it provided only if Greece financed “the
purchase of the items to be delivered” with United
States government loans. “Material” is not a freestanding
contractual term. It relates back to the “items” referenced
in the preceding portion of Article 9.4. See, e.g., Delta
Mining Corp. v. Big Rivers Elec. Corp., 18 F.3d 1398, 1403
(7th Cir. 1994) (noting that a court interpreting a con-
tractual term should take account of “the context in
which the word is used”).
This relationship between “materials” and “items” is
reinforced by the ordinary meaning of the word “mate-
rial.” See, e.g., Rain v. Rolls-Royce Corp., 626 F.3d 372, 379
(7th Cir. 2010) (noting that courts should use the “plain
and ordinary meaning” of a contractual term whenever
possible). As commonly defined, a “material” is a “sub-
stance or substances out of which a thing is or can be
made” or “something . . . that is to be refined and made or
incorporated into a finished effort.” The American Heritage
Dictionary of the English Language, 1109 (3d ed. 1992). The
materials covered by Article 9.4 are the individual

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12 No. 09-3037
Scheideman’s precise statement was that it would have been 6
“outside the spirit and intent” of Contract 5/86 to add “a
separate contract line item . . . invoicing Greece for the capital-
ization costs to HBDIC.”
physical parts comprising or otherwise used in the pro-
duction or provision of the “items to be delivered” under
Contract 5/86 — the engines used in the fighter jets, spare
parts, construction materials, etc. Thus, even if HBDIC
could be deemed an “item to be delivered” under
Contract 5/86 (itself an unlikely and strained reading
of the contract), HBDIC’s stock or its management per-
sonnel were not “materials” as that term was used
in Article 9.4. In other words, General Dynamics, by
complying with its obligations regarding HBDIC, was not
simultaneously violating its obligations to the United
States government.
Yannacopoulos’ other arguments for a more expansive
reading of Article 9.4 are misplaced. First, he makes
much of General Dynamics executive Douglas Scheide-
man’s statement that it would have been “inconsistent
with the spirit and intent of Contract 5/86” to pass
HBDIC’s costs on to Greece. The language of Article 9.46
is clear on its face, however, in which case “the intent of
the parties is to be derived only from the express language
of the contract.” Bratton v. Roadway Package System, Inc.,
77 F.3d 168, 173 (7th Cir. 1996) (citation omitted). Even
if one or more of the parties subjectively intended to bar
General Dynamics from spending United States funds
on the HBDIC costs, the language of Contract 5/86
simply failed to make that intent manifest.

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No. 09-3037 13
Yannacopoulos also insists that Article 9.4 must
forbid the use of the United States loan funds to capi-
talize HBDIC because a contrary construction “would
destroy the stated contractual consideration” of Con-
tract 5/86 — General Dynamics’ agreement to capitalize
HBDIC — and would fatally undermine Article 35’s
stated purpose of providing “near term and long term di-
rect and substantial benefits to the Hellenic Industry,
economy, and balance of payments.” When General
Dynamics “secretly” incorporated the HBDIC costs into
the price of Contract 5/86, he insists, Greece ended up
“unknowingly pay[ing] for its own offset company.” But
if Greece intended to pay for the HBDIC costs itself,
we understand him to ask, why did it not finance
the company directly without going through General
Dynamics? Contract 5/86 cannot be read, he argues, to
permit what he characterizes as a nonsensical result. See
Futuresource LLC v. Reuters Ltd., 312 F.3d 281, 284 (7th
Cir. 2002).
This argument is not persuasive. For one thing, it was
not a secret that General Dynamics charged Greece for
the expenses it incurred in capitalizing HBDIC. Article 35
of Contract 5/86 explicitly required General Dynamics
and its two main subcontractors to capitalize HBDIC
with $50,000,000 over a ten-year period as part of the
Greek sale. Anyone who read that significant term of
Contract 5/86 should have realized that the $50 million
or more in HBDIC costs would be incorporated into
the final amount charged to Greece. Unless the sale has
an element of charity, the final amount charged for a

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14 No. 09-3037
The DSAA provided a control by evaluating whether the 7
prices charged for the items in Contract 5/86 were reasonable.
In his previous lawsuit against General Dynamics, 8
Yannacopoulos made essentially the same argument, claiming
that HBDIC was “of de minimis value” and “valueless to the
Greek government” as it was structured in Contract 5/86.
Yannacopoulos, 75 F.3d at 1302 & n.3.
particular good or service will depend at least in part
on the seller’s expenses. That is why, for example, a
product purchased from an online retailer is often
less expensive than the same product purchased from a
brick-and-mortar store. The products are no different,
but the physical store must pass on to its customers
a number of expenses not incurred by the online re-
tailer. There is no reason to believe that the Greek gov-
ernment or the United States government thought
that General Dynamics would charitably invest
millions of dollars in a Greek business for the benefit
of the Greek government without somehow recouping
that expense. General Dynamics’ HBDIC-related charges
were not secret and were required under the contract.7
But if Greece knew of and was willing to pay for the
HBDIC costs, Yannacopoulos asks, why didn’t Greece
just pay those costs itself? The answer is simple. Greece8
could not have obtained a loan from the United States
government specifically to capitalize HBDIC. But if
General Dynamics capitalized HBDIC itself and rolled
its costs for doing so into the price of Contract 5/86,
Greece could obtain just such a loan from the United

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No. 09-3037 15
States as part of the larger deal to arm a NATO ally
during the Cold War. General Dynamics’ involvement
effectively allowed Greece to invest in HBDIC millions
of American dollars that would have otherwise been
unavailable. And the financial benefits Greece hoped to
realize from this investment are clear: under Article 35,
HBDIC was required to begin paying dividends to the
Greek government after five years of operation and, if
HBDIC ever dissolved, to turn over to the Greek govern-
ment all of its corporate assets up to $50 million, plus
half of any assets exceeding that amount. These benefits
are in addition to the economic benefits that Greece
might have realized from any new economic oppor-
tunities HBDIC provided to Greece.
Article 9.4 of Contract 5/86 simply did not prevent
General Dynamics from capitalizing HBDIC with funds
derived from the United States loans to Greece. Given
the financial benefits that Greece would realize from
such an arrangement, such indirect use of American
funds to capitalize HBDIC was part of the consideration
Greece bargained for in Contract 5/86, and the terms
that the United States government approved. Because
Article 9.4 permitted exactly what Yannacopoulos
accuses General Dynamics of doing, General Dynamics
did not breach Contract 5/86 by complying with the
same contract and therefore did not falsely certify
its compliance with that contract. To the extent
Yannacopoulos’ claim turns on that alleged breach, sum-
mary judgment for General Dynamics was appropriate.

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16 No. 09-3037
B. The Certification Agreement
Yannacopoulos argues that General Dynamics also
falsely certified its compliance with the Certification
Agreement, which he interprets to forbid General Dy-
namics from capitalizing HBDIC. In Paragraphs 4 and 6
of that agreement, General Dynamics made three certif-
ications relevant to this appeal: (1) that “the material or
components to be provided under the Purchase Agree-
ment are predominantly of U.S. manufacture;” (2) that “all
non-U.S. origin or non-U.S. manufactured items and
components, and non-U.S. services procured or to be
procured specifically for this Purchase Agreement are
identified” in a document attached thereto; and (3) that,
aside from commissions and contingent fees, any
funds General Dynamics received from the United States
government would “not be used to purchase services . . .
utilized in the execution of the Purchase Agreement
from non-U.S. contractors or individuals that are not
resident in the United States of America, unless the
financing of such services is expressly authorized by
the DSAA.” Each certification, Yannacopoulos argues,
forbade General Dynamics from using United States
funds to pay for the HBDIC costs without the DSAA’s
prior authorization. Because each certification concerns
a distinct subject matter, we address each in turn.
The first certification, referring to “material or compo-
nents,” did not bar General Dynamics from spending
FMF funds on the HBDIC costs. Neither stock nor man-
agement personnel can be considered “material or com-
ponents,” as the first certification used those terms. As

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No. 09-3037 17
This is consistent with the DSAA’s October 1985 and Feb- 9
ruary 1987 “Guidelines for FMS Loan Financing of Direct
Commercial Contracts,” which state that “items purchased
must be manufactured in the U.S. and be composed mainly of
U.S. made items, components[,] and services.” The February
1989 and July 1991 Guidelines differ only in that they
further clarify that the items must be “U.S. manufactured and
assembled.”
we observed in our discussion of Article 9.4, the word
“material” typically refers to a substance or part from
which something is made. The term “component” also
does not reach the HBDIC aspects of the contract. See
The American Heritage Dictionary of the English Language,
387 (defining a “component” as “a constituent element,
as of a system” or a “part of a mechanical or electrical
or electrical complex”). The first certification is limited
to “material and components” capable of being “manu-
facture[d],” a description clearly inapplicable to stock
and management personnel.9
Yannacopoulos contends the second certification was
false because General Dynamics failed to identify the
HBDIC costs among the “non-U.S. origin or non-U.S.
manufactured items and components” and “non-U.S.
services procured or to be procured specifically for”
Contract 5/86. Turning to the second certification, we
see that General Dynamics did in fact indicate that it
had identified all such items, components, and services
in a document attached to the Certification Agreement.
General Dynamics did so by checking a box in the

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18 No. 09-3037
second certification; a box in that certification in-
forming the DSAA that such items, components, and
services could be found in Contract 5/86 was left un-
checked. The document attached to the Certification
Agreement made no mention of the HBDIC costs.
In arguing the falsity of the second certification,
Yannacopoulos overlooks the undisputed fact that the
DSAA had already been notified of General Dynamics’
payment of the HBDIC costs when it received Contract 5/86
for review. In light of that undisputed disclosure, no
reasonable jury could think General Dynamics’ failure
to check the proper box in the Certification Agreement
was a material false statement, as required for liability
under the False Claims Act. See United States ex rel. Longhi
v. United States, 575 F.3d 458, 467 (5th Cir. 2009) (requiring
that false statement on which FCA claim is based be
material); United States ex rel. Wilson v. Kellogg Brown &
Root, Inc., 525 F.3d 370, 376 (4th Cir. 2008) (same); United
States ex rel. A+ Homecare, Inc. v. Medshares Management
Group, Inc., 400 F.3d 428, 443 (6th Cir. 2005) (same); see
Allison Engine Co., Inc. v. United States ex rel. Sanders,
553 U.S. 662, 665 (2008) (requiring that defendant have
intended that false statement “be material to the Gov-
ernment’s decision to pay or approve the false claim”);
cf. United States v. Rogan, 517 F.3d 449, 452 (7th Cir. 2008).
The Certification Agreement relating to Contract 5/86
was signed by General Dynamics in late February 1987,
weeks after Contract 5/86 was submitted to the DSAA
for review. That contract required General Dynamics to
pay the HBDIC costs and to provide management per-

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No. 09-3037 19
sonnel in Greece. The best that Yannacopoulos can claim
is that General Dynamics, by neglecting to refer ex-
plicitly to Contract 5/86 in the second certification, failed
to remind the DSAA of what was already clear from
the contract itself: that General Dynamics was paying
a number of costs associated with the establishment of
a foreign business development corporation. General
Dynamics’ failure to remind the DSAA of information
set forth in some detail in the contract it had just recently
received for review could not reasonably be deemed
material to the DSAA’s decision. See Rogan, 517 F.3d at 452.
Yannacopoulos also argues that the third certification,
in which General Dynamics certified that the funds
it received from the United States government would “not
be used to purchase services . . . utilized in the execution
of the Purchase Agreement from non-U.S. contractors
or individuals that are not resident in the United States,”
was false. This language says nothing about whether
General Dynamics could expend any funds on HBDIC
stock. Corporate stock is clearly not a “service” of any
kind. Nor can this certification be read to say that General
Dynamics would not expend any funds on the HBDIC
management personnel. The third certification re-
stricted General Dynamics’ use of government funds
only to pay for services “utilized in the execution of the
Purchase Agreement” (emphasis added). Such services
might include, for example, the manufacture of indi-
vidual components installed in the F-16s sold to Greece,
or the assembly of F-16s from components manufac-
tured in the United States or elsewhere; in other words,

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20 No. 09-3037
services General Dynamics obtained for the purpose of
fulfilling the obligations it undertook under Contract 5/86.
This language simply cannot reasonably be read to
pertain to any services that may have been provided by
the HBDIC management personnel. General Dynamics
was required to certify that it was in compliance with
Contract 5/86, which required it to fund and sup-
port HBDIC. The third certification cannot be interpreted
to have required General Dynamics to violate Con-
tract 5/86 itself.
For all of these reasons, the district court correctly
granted summary judgment for General Dynamics on
all of Yannacopoulos’ claims related to HBDIC.
IV. The “Economic Price Adjustment Clause” Claim
Yannacopoulos next claims that General Dynamics
violated the False Claims Act in relation to the “Economic
Price Adjustment Clause” found in the draft of what
eventually became Contract 5/86. Under the terms of the
Greek sale, General Dynamics was to receive payments
well before it provided all of the goods and services
Greece purchased. Because General Dynamics would
derive substantial economic benefit from these advance
payments — namely, interest on the loan funds received
from the United States on Greece’s behalf — the parties
included in the draft contract a provision entitled “Eco-
nomic Price Adjustment for Advance Payments.” Under
this draft EPA clause, the total contract price was to be
reduced “for imputed interest on excess contract pay-

-- 20 of 46 --

No. 09-3037 21
ments” by “summing the published 90-day U.S. Treasury
Bill yield rate average for each month of a calendar
year and dividing the summation by 12,” then
multiplying that number by “the amount defined in
Annex AC” of the draft contract. Annex AC, which
would define the amount needed to calculate the ad-
justment under the draft EPA clause, was conspicuously
absent from the draft contract.
In exchange for General Dynamics’ agreement to
deliver F-16s to Greece more quickly than was initially
contemplated, Greece agreed to delete the EPA clause
from the draft contract. On April 8, 1986, General Dy-
namics and Greece executed Addendum One “to sup-
plement and amend” the draft contract. General
Dynamics sent DSAA a copy of Addendum One
in May and July of that year. Although that
addendum left the EPA clause in the draft contract, an
accompanying document explained that, as a “quid pro
quo for the accelerated delivery schedule,” the EPA
clause was “no longer applicable” under Addendum
One. At some point thereafter (the disputed date is ir-
relevant for reasons we discuss below), the parties
deleted the EPA clause from the draft contract as a con-
dition for General Dynamics’ accelerated delivery of
aircraft. When Contract 5/86 was executed and submitted
to the DSAA for review on February 3, 1987, it no longer
contained the EPA clause.
By the time it executed Contract 5/86, however, General
Dynamics had already submitted $70 million in in-
voices to DSAA for payment in June, September, and

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22 No. 09-3037
December 1986. Each of those invoices certified
that General Dynamics was in compliance with the
Certification Agreement relating to the draft contract.
Yannacopoulos contends that these interim certifica-
tions were false because General Dynamics failed to
provide the DSAA “direct unambiguous notice of
deletion of the EPA Clause” before it executed Con-
tract 5/86, and because these invoices falsely certified
General Dynamics’ compliance with Paragraph 10 of
that Certification Agreement, which required General
Dynamics to “report[ ] to DSAA upon effect” any
“future changes to the terms of the Purchase Agreement.”
Paragraph 10 required General Dynamics to notify the
DSAA of any changes made to the EPA clause when
they took effect. The deletion of a material clause consti-
tutes a change to the contract of which the DSAA was
to receive notice. Thus, Paragraph 10 of the Certification
Agreement required that the DSAA be notified when
the EPA clause was deleted from the draft contract.
General Dynamics does not appear to dispute that the
DSAA was first informed of the EPA clause’s deletion
when it received a copy of Contract 5/86 for review
in January 1987, some time after the invoices at issue
here had been submitted for payment. Accordingly,
we assume for the sake of argument that any invoices
submitted for payment after the parties reached a final
agreement to delete that clause, but before the DSAA
received a copy of Contract 5/86, falsely certified com-
pliance with the Certification Agreement.
But was this presumed falsehood material for the
purposes of the False Claims Act? Put more precisely,

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No. 09-3037 23
Yannacopoulos argues that General Dynamics’ communica- 10
tions to the DSAA merely “expressed GD’s negotiating posi-
tion” or “communicat[ed] that Greece’s . . . version of the EPA
Clause modification was ‘no longer applicable.” He calls our
attention to nothing in the record, however, that supports
that strained interpretation.
could this falsehood have influenced (or naturally
tended to influence) the DSAA’s decision to continue
financing the Greek sale? See, e.g., Rogan, 517 F.3d at 452.
The undisputed facts show that it was not material.
Before General Dynamics submitted any of the allegedly
fraudulent interim invoices for payment, it sent the
DSAA a letter explaining that “the provision for
imputed interest in Article 11 of the Draft Contract is no
longer applicable.” By sending this letter to the DSAA,
General Dynamics notified the DSAA that, even though
the language of the EPA clause remained in the draft
contract for the time being, the parties no longer
intended for that clause to have any effect.10
Having been told that the EPA clause no longer had any
effect, why would the DSAA have cared if that clause
were later deleted by the parties? In an attempt to
answer this question, Yannacopoulos relies on former
DSAA deputy director H. Diehl McKalip’s written dec-
laration that, “had [he] been aware that the price adjust-
ment provision had been deleted from the parties’ final
contractual materials,” he would have recommended
that financing of the Greek sale be suspended if General
Dynamics did not “adjust[ ] the contract’s payment

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24 No. 09-3037
If McKalip had been able to recall the DSAA’s approval of 11
Contract 5/86, he might have recalled, for instance, that the
DSAA had been told that the EPA clause was “under con-
sideration for being taken out” in exchange for “accel-
erated aircraft deliveries” well before that clause was
actually deleted.
This may explain why McKalip’s declaration does not 12
address a former DSAA official’s testimony that (1) the EPA
clause had nothing to do with the DSAA’s approval of the
draft contract; and (2) that the DSAA disliked that clause
because it provided for money to be returned directly to
Greece, rather than to the United States government.
schedule in view of the deletion of the [EPA] clause.” But
McKalip could not say with any certainty that he was
not aware of the EPA clause’s deletion or ineffectiveness
in the first place — McKalip read neither the draft
contract nor Contract 5/86, and he could not recall the
actual circumstances surrounding his recommendation,
explaining that “the devil . . . is in the details.” In11
fact, McKalip could remember having approved
Contract 5/86 only because “my signature is on the
worksheet . . . so I obviously had oversight.”12
As a general matter, speculation like McKalip’s is not
sufficient to defeat (or win) summary judgment. See, e.g.,
Chiaramonte v. Fashion Bed Group, Inc., 129 F.3d 391, 402
(7th Cir. 1997). That is particularly true here, where the
undisputed facts show that, after receiving and re-
viewing Contract 5/86, the DSAA neither suspended
General Dynamics’ financing nor required that General
Dynamics alter the payment schedule to account for the

-- 24 of 46 --

No. 09-3037 25
absence of the EPA clause from that contract. In other
words, the agency failed to take action when it actually
learned of the supposed misrepresentation. In that
case, speculative testimony about how that party might
have acted if it had discovered that misrepresenta-
tion earlier cannot raise a genuine issue of fact as to
materiality. See American Nat. Fire Ins. Co. v. Rose Acre
Farms, Inc., 107 F.3d 451, 458 (7th Cir. 1997) (affirming
grant of summary judgment on grounds that defendant’s
misrepresentation was not material).
If that were not enough, recall that the draft EPA clause
was incomplete and could not have been given any
specific content. Annex AC, which would have been
needed to calculate any price reductions under the
draft contract, was nowhere to be found in that draft
contract. No reasonable juror could think that the DSAA
would care about the deletion of an unenforceably
vague contract provision. Given all of this, no reasonable
juror could find that the DSAA, having taken no action
when first told that the EPA clause was “no longer ap-
plicable,” and having continued to take no action
when provided with a final contract lacking that clause,
could have been goaded into action if only it had been
told again, and a little more specifically, of the EPA
clause’s deletion at some time in between. To believe
this, one would have to assume that the DSAA would
consider the deletion of the EPA clause from the draft
contract more significant to its final approval than the
absence of such a clause from the outset. A reasonable
jury could not accept such an unlikely proposition.

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26 No. 09-3037
Yannacopoulos also argues that his due process rights 13
were violated because the district court allowed General
Dynamics to present additional evidence in support of its
renewed motion for summary judgment on the EPA clause
claim without allowing him to present additional evidence of
his own. Yannacopoulos gives no reason, however, that he
was unable to include this additional evidence with the sub-
stantial amount of evidence he attached to his objection to
General Dynamics’ request for leave to file its renewed mo-
tion. Regardless, summary judgment for General Dynamics
on the EPA clause claim was appropriate even in light of the
additional evidence described in Yannacopoulos’ briefs.
Under the evidence presented on summary judgment,
a reasonable jury could conclude only that the deletion
of the “no longer applicable” EPA clause was immaterial
to the DSAA’s decision regarding its funding of the
Greek sale. Summary judgment for General Dynamics
on Yannacopoulos’ claim regarding the EPA clause
was appropriate as a matter of law.13
V. The Spare Parts Claim
Yannacopoulos next argues that General Dynamics
falsely certified its compliance with the terms of the
Certification Agreement in relation to the purchase of
spare parts under Contract 5/86. Of the total price set out
in Contract 5/86, $70 million was allocated for “Initial
Support Spares” ordered by Greece. Article 8.5 went on
to explain that the “total price for . . . Initial Support
Spares, consists of a services element and a hardware

-- 26 of 46 --

No. 09-3037 27
element.” While the services element was “not subject to
adjustment for quantity changes,” the hardware ele-
ment was “a reference planning number . . . based on
[Greece’s] forecast of this value” to be used “on an
interim basis” until that value could be adjusted to
reflect the outcome of a “spares selection conference” in
January 1987. After that conference, any adjustment to
the spare parts price would be incorporated into the
contract “as may be appropriate prior to the [March 31,
1987] payment.” Even then, however, that price
remained a mere estimate. The final price of the hard-
ware element was to be calculated “by summing
the prices of the individual items of hardware
authorized by [Greece] during the life of the contract.”
Prior to the spares selection conference in January 1987,
Greece decided to purchase a number of spare parts
from suppliers other than General Dynamics. Despite
this news, Greece and General Dynamics did not adjust
the spare parts line item in Contract 5/86 before the
March 31, 1987 payment. General Dynamics submitted
a number of invoices to the DSAA for payment in
relation to the spare parts line item. Those invoices repre-
sented that General Dynamics was in compliance
with the Certification Agreement, under which General
Dynamics had agreed to report to the DSAA “any future
changes to the terms of the Purchase Agreement . . . upon
effect.”
Yannacopoulos claims that General Dynamics falsely
certified its compliance with the Certification Agreement
by failing to inform the DSAA of what he calls “the par-

-- 27 of 46 --

28 No. 09-3037
ties’ understanding that they would not abide by
the deadline in Article 8.5” when it submitted these
invoices. Yannacopoulos has no evidence of any formal
agreement (written or otherwise) between the parties.
His claim is that the parties reached an implicit,
informal agreement that they would “disregard” the
violation of Article 8.5 that he says (and that we will
assume, for the sake of argument) resulted when they
failed to change the price of the spare parts line item
after Greece decided to purchase spare parts from
other suppliers.
To succeed on this claim, Yannacopoulos must show
that, when General Dynamics filed the invoices relating
to spare parts, it knew that it had failed to comply with
Article 8.5. See United States ex rel. Lamers v. City of
Green Bay, 168 F.3d 1013, 1018 (7th Cir. 1999) (observing
that “it is impossible to meaningfully discuss falsity
without implicating the [False Claims Act’s] knowledge
requirement”). The False Claims Act does not penalize
all factually inaccurate statements, but only those state-
ments made with knowledge of their falsity. “Innocent
mistakes or negligence are not actionable under this
section.” Hindo v. University of Health Sciences / The Chicago
Medical School, 65 F.3d 608, 613 (7th Cir. 1995); see 31 U.S.C.
§ 3729(a)(2) (requiring that false statement be made
“knowingly”). For General Dynamics to have known of
its failure to comply with Article 8.5, however, it also
had to know that Article 8.5 required an alteration to
the spare parts line item prior to the March 31, 1987
payment. Article 8.5 required such an alteration only if
the initial estimate regarding the price of the spares to be

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No. 09-3037 29
purchased was incorrect. If General Dynamics did not
know that Greece’s estimate regarding the price of the
spare parts line item was no longer correct, then it could
not have known that it had failed to comply with
Article 8.5 and could not be held liable under the False
Claims Act. See, e.g., Hindo, 65 F.3d at 613.
To avoid summary judgment on this claim,
Yannacopoulos needed to present evidence sufficient
to allow a reasonable jury to conclude that, by
March 1987, General Dynamics knew of facts conclu-
sively establishing that the initial $70 million estimate
was incorrect. By basing the initial spare parts line item
on a flexible estimate rather than a firm price, General
Dynamics and Greece admitted their uncertainty about
what that line item’s price should be. Faulty calculations
are not actionable under the False Claims Act. Lamers,
168 F.3d at 1018. Yannacopoulos needed to offer evidence
that General Dynamics knew by March 31, 1987 that
Greece would never order $70 million in spare parts
over the long life of Contract 5/86. See United States ex rel.
Owens v. First Kuwaiti Gen. Trading & Contracting Co.,
612 F.3d 724, 733-34 (4th Cir. 2010) (explaining that an
estimate is fraudulent for purposes of the FCA if that
estimate is made by an individual who knows of “facts
that preclude that estimate” (emphasis added)); United
States ex rel. Siewick v. Jamieson Science & Engineering, Inc.,
214 F.3d 1372, 1378 (D.C. Cir. 2000) (same); United States
v. Foster Wheeler Corp., 447 F.2d 100, 101 (2d Cir. 1971)
(“Inflated cost estimates are quite different from fraud-
ulent estimates.”); cf. Lamers, 168 F.3d at 1018 (noting
that “promises of future compliance” are knowingly

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30 No. 09-3037
Under the FCA, a defendant lacking actual knowledge of a 14
falsehood will still be deemed to have known of that falsehood
if he acted in (1) deliberate ignorance; or (2) reckless disre-
gard of that falsehood. 31 U.S.C. § 3729(b). Here, however,
Yannacopoulos argues only that General Dynamics and
Greece actually knew of the inaccuracy of their initial estimate
and agreed to disregard the provisions of Contract 5/86 that
purportedly required them to rectify that inaccuracy by
March 1987.
false only if the party making that promise “never in-
tended to comply”).14
Yannacopoulos’ theory is that because General
Dynamics knew that Greece had decided to purchase
at least some spares from other suppliers, it also had to
know that a reduction in the original spare parts
estimate was necessary. This assumption, crucial to
Yannacopoulos’ claim, is simply not borne out by the
record. Greece did not base its initial $70 million esti-
mate “on a set quantity of spares” to be purchased, but
merely provided that estimate without any explana-
tion. Unaware of the basis for Greece’s initial estimate,
General Dynamics would have been hard pressed to
know how that estimate was affected, if at all, by
Greece’s decision to purchase some spare parts from
other suppliers. Only complicating matters is the early
date — March 1987 — by which Yannacopoulos claims
General Dynamics must have known that the $70 million
estimate was incorrect. So early in the parties’ contractual
relationship, General Dynamics could only speculate
about any effect the events of the next decade would

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No. 09-3037 31
In fact, it took several years before the final price of the 15
spare parts line item was agreed upon, with a number of
price adjustments taking place during that time. The first
adjustment to that line item occurred in 1988, when the price
of the spares was reduced to $69,000,000. It was again
reduced to $30,288,097 in 1990. Ultimately, the spares line
item was reduced to the final price of $24,359,722 in 1996.
have on the total value of spare parts Greece would wish
to purchase. Further, it is hard to see how General15
Dynamics could have known that the initial estimate
was incorrect after Greece said that it wanted to “keep
the price of the spares line item roughly at the same
level it was initially,” despite purchasing some spare
parts from other suppliers.
Given this evidence, no reasonable jury could have
concluded that General Dynamics knew that Greece
would never purchase $70 million of spare parts over
the lifetime of Contract 5/86. We can assume that
General Dynamics, upon learning that Greece intended
to purchase spares from other suppliers, suspected
that Greece might purchase fewer spare parts from
General Dynamics than initially estimated. But especially
where the initial estimate was so arbitrary, a suspi-
cion is a far cry from actual knowledge that the initial
arbitrary estimate was no longer reliable. To prove
this claim, Yannacopoulos had to come forward with
evidence that General Dynamics knew the estimate was
incorrect before the March 31, 1987, payment, nearly a
decade before the final price for the spare parts was
decided. He has failed to do so. Summary judgment

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32 No. 09-3037
against Yannacopoulos on his spare parts claim was
appropriate.
VI. The Depot Claim
Yannacopoulos also claims that General Dynamics
falsely certified its compliance with the terms of the
Certification Agreement in relation to Contract 5/86’s
depot program. Article 8.2 of Contract 5/86 contained a
$49,887,435 line item for a “depot program,” relating
to materials and equipment for use in repairing and
maintaining the F-16s. Article 8.11 explained that the
depot program was “subject to reassessment” by Greece
until no later than 12 months after Contract 5/86’s
effective date. During the time period for “reassessment,”
General Dynamics agreed to “limit the cost[s] incurred”
for the depot program to those “required to maintain
the contract delivery schedule,” which were “anticipated
to include the depot site survey, preparation of recom-
mended lists and schedules and preparation for and
support of the depot working conference(s).” Greece
never authorized General Dynamics to begin work on the
depot program, and the parties ultimately cancelled that
program in July 1995.
General Dynamics submitted a number of invoices
relating to the depot program, each of which certified
General Dynamics’ compliance with Contract 5/86 and the
Certification Agreement. As in his spare parts claim,
Yannacopoulos contends that these certifications were
false because General Dynamics “failed to report to
[the] DSAA . . . that it had reached an [implicit] under-

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No. 09-3037 33
standing with Greece to disregard the timetable imposed
by Article 8.11.” Under this “timetable,” he says, Greece
had until April 25, 1987 “to either ‘delete’ the depot
program in whole or in part, or [to] select the depot work
it wanted and authorize GD to begin performance.”
We disagree with this strained interpretation of
Article 8.11, which rests on a reading of select language
from that article without regard for its context. Although
Article 8.11 provided a limited period of time in which
Greece could “reassess” the depot program, that time
limit must be read in conjunction with the contrac-
tual language found immediately thereafter. See Delta
Mining Corp., 18 F.3d at 1403. That language required
General Dynamics to “limit the cost[s] incurred” on that
depot program during “the period of time allowed for
reassessment.” Article 8.11 did nothing to limit the
Greek government’s ability to “reassess” its interest
in the depot program at any time. Rather, that article
gave the Greek government a year in which it could
reassess its interest in that program without having to
worry about incurring unnecessary costs for a program
that it had decided not to purchase. Greece could
reassess its interest in buying the depot program after
the Article 8.11 deadline had passed, but it would do
so at its own risk. After that deadline passed, General
Dynamics was no longer prohibited from incurring
costs beyond those specifically delineated in that article,
costs that we presume were assessed against Greece
like any other costs under Contract 5/86.
Because Yannacopoulos’ claim regarding the depot pro-
gram rests on an incorrect interpretation of Article 8.11,

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34 No. 09-3037
the claim fails as a matter of law. The district court
was correct to grant summary judgment for General
Dynamics on that claim.
VII. The Modifications Five and Six Claims
In March 1993, defendant Lockheed acquired General
Dynamics’ Fort Worth Division and assumed all of
General Dynamics’ rights and obligations under Con-
tract 5/86. Following its assumption of those responsi-
bilities, Lockheed and Greece executed two modifica-
tions to Contract 5/86, both of which Yannacopoulos
now contends were “reverse false claims.”
A. The Modification Five Claim
Yannacopoulos’ first claim against Lockheed concerns
Amendment H0005 to Contract 5/86 (“Modification
Five”), executed on March 17, 1993. In February 1987,
Greece had exercised its option under Article 35 of Con-
tract 5/86 to participate in a co-production program
with General Dynamics. Under that program, General
Dynamics was to provide technical support and materials
to Hellenic Aerospace Industry. The price of the co-pro-
duction program was based on a projection regarding
the amount of support work the Hellenic Aerospace
Industry would require over the course of the program.
Each year after the first four years of that program, Greece
and General Dynamics were to “review the level of
coproduction support to be provided” to the Hellenic
Aerospace Industry. The contract provided that, if

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No. 09-3037 35
Hellenic Aerospace Industry’s “actual performance” was
“such that the level of [General Dynamics’] support
[could] be reduced, the support will be reduced and the
coproduction price . . . will be reduced accordingly.” The
parties agreed to “work out the details for the imple-
mentation of [this article] during the fourth year after
the signature of [the] Contract.”
The agreed price for the co-production program was
$53,693,555. Because Hellenic Aerospace Industry pro-
duced fewer F-16 components than originally antici-
pated, however, less support was required to produce
those components than was initially anticipated. By
late September or October 1990, General Dynamics
had collected $47,693,487 for its co-production work,
though Greece had authorized only about $24 million
worth of co-production work by that time. In March 1993,
Greece and Lockheed executed Modification Five to
Contract 5/86, which maintained the price of the co-
production program line item at $53,693,555. Lockheed
made no refund to the United States until 1996, when it
made a refund of $7,042,940 related to the co-production
charges.
Under the False Claims Act, a “reverse false claim” is
a false statement used not to obtain payments from the
government, but to “conceal, avoid, or decrease an ob-
ligation to pay or transmit money or property to the
Government.” 31 U.S.C. § 3729(a)(7) (2006); see United
States ex rel. Bahrani v. Conagra, Inc., 465 F.3d 1189, 1194-95

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36 No. 09-3037
The 2009 amendments to the False Claims Act make it 16
unlawful to “knowingly conceal[ ] or knowingly and improperly
avoid[ ] or decrease[ ] an obligation to pay or transmit money
or property to the Government,” apparently regardless of
whether such actions involve an a falsehood. Pub. L. 111-21,
§ 4(a)(1). This amendment does not apply here, however, be-
cause it applies only to conduct occurring on or after May 20,
2009. See Pub. L. 111-21, § 4(f).
(10th Cir. 2006). Yannacopoulos contends that Modifica-16
tion Five “was a reverse false claim because it concealed
and avoided [Lockheed’s] contractual obligation to make
a coproduction-related refund by maintaining the price
of the coproduction line item unchanged at $53,693,555.”
In trying to prove this, Yannacopoulos argues that,
because General Dynamics had been overpaid for its
work on the co-production line item, it had an obligation
to pay the amount of that overpayment to the United
States government, an obligation he says Lockheed con-
cealed when it submitted Modification Five to the gov-
ernment without mentioning that overpayment.
Assuming that such an obligation existed, however,
and assuming that Modification Five concealed that
obligation, Yannacopoulos’ claim can succeed only if
Modification Five was false. See, e.g., Gross, 415 F.3d
at 604; 31 U.S.C. § 3729(a)(7) (2006). Despite this,
Yannacopoulos failed to argue the falsity of Modification
Five in his opening brief. Only after Lockheed pointed
out this omission in its response brief did Yannacopoulos
offer an explanation as to how a mere contract modifica-
tion — an agreement between two parties altering their

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No. 09-3037 37
We reject Lockheed’s argument that, because any amounts 17
that should have been refunded in Modification Five were
allegedly later refunded in Modification Six, discussed below,
Yannacopoulos has no standing to bring his claim regarding
Modification Five. Even if those funds were later returned, the
United States was presumably harmed when it was denied the
opportunity to collect interest on the funds in its possession.
And even if the United States was not actually harmed by the
loss of any such interest funds, we may not dismiss a suit
for lack of standing “just because the plaintiff fails to prove
injury.” See, e.g., Mainstreet Organization of Realtors v. Calumet
City, 505 F.3d 742, 745 (7th Cir. 2007).
contractual obligations to one another — could be false.
First, he claims that Modification Five’s $53,693,555
price tag for the co-production line item was “false and
inflated.” Second, he argues that Modification Five
was false because “the U.S. Government recoupment
line item” in that Modification was priced at $29,047,706,
when nearly $23 million of that amount had already
been repaid to the United States. We address in turn
these alleged falsehoods, neither of which is sufficient
to give rise to liability under the False Claims Act.17
1. Modification Five’s Co-production Program Line Item
Showing the objective falsity of the price contained in
Modification Five’s co-production program line item,
however, is not as simple a task as establishing the
falsity of a statement of historical fact. A statement may
be deemed “false” for purposes of the False Claims Act

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38 No. 09-3037
Even if he could meet this burden, Yannacopoulos would 18
also have to show that Lockheed knew that Greece did not
really agree to pay the amount set out in the co-production
line item, despite the fact that Greece specifically said as
much by signing Modification Five.
only if the statement represents “an objective falsehood.”
Wilson, 525 F.3d at 376, citing Lamers, 168 F.3d at 1018.
Although a breached contractual term may be considered
a falsehood in a looser sense — a false promise — a mere
breach of a contractual duty does not satisfy this stan-
dard. See United States ex rel. Garst v. Lockheed-
Martin Corp., 328 F.3d 374, 378 (7th Cir. 2003) (observing
that a mere “fail[ure] to keep one’s promise is just
breach of contract,” not fraud); Harrison v. Westinghouse
Savannah River Co., 176 F.3d 776, 789 (4th Cir. 1999) (af-
firming dismissal where allegations showed only “poor
and inefficient management of contractual duties”). Nor
do mere “differences in interpretation growing out of a
disputed legal question” involving the terms of a con-
tract. See Lamers, 168 F.3d at 1018. To establish the
objective falsity of the co-production line item price in
Modification Five, Yannacopoulos needed to present
evidence showing that Greece did not in fact agree “to
pay [that amount] for the items and services to be de-
livered” under the co-production line item.18
None of the evidence on which Yannacopoulos
relies is sufficient to show either the falsity of the co-
production line item price in Modification Five or
Lockheed’s knowledge of that falsity. Much of that evi-

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No. 09-3037 39
dence shows, at best, that General Dynamics and Greece
reached other agreements regarding the co-production
program before Modification Five was executed. But
nothing about those agreements prevented Lockheed
and Greece from reaching a new agreement when they
negotiated the final terms of Modification Five. The
parties to the original agreement were not bound to
follow that agreement even after both agreed that it
was not in their best interests to do so. Yannacopoulos
also claims that General Dynamics collected millions of
dollars for work on the co-production program that was
not yet completed at the time Modification Five was
signed, but we fail to see how this goes to show that Greece
did not actually agree to pay the price set forth in that
modification. The remainder of the evidence on which
he relies — the decrease in demand for F-16 parts and
General Dynamics’ decision to no longer submit in-
voices in relation to the co-production program — suffer
from that same failing. None of it could enable a rea-
sonable jury to conclude that the price of the co-produc-
tion program line item in Modification Five was
objectively false, in the sense that Greece did not
actually agree to pay the price set forth in that line item.
2. Government Recoupment Line Item Price
In his reply brief, Yannacopoulos takes issue with the
fact that a $29,047,706 line item for “U.S. Government
recoupment” was included in the total contract price

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40 No. 09-3037
Government recoupment was described by one deponent 19
as encompassing such things as the cost to the U.S. Govern-
ment for developing the F-16.
By contrast, the facts allegedly showing the falsity of the co- 20
production line item were all discussed in Yannacopoulos’
opening brief. He failed to connect the dots adequately in that
(continued...)
set forth in Modification Five. This was false, he says,19
because a later amendment to Contract 5/86 states that
most of this money had already been repaid to the
United States. Moreover, he claims that Article 8.7
of Contract 5/86 prohibits this line item — accurate or
not — from being included in the contract price in the
first place. By placing an inaccurate price for the gov-
ernment recoupment line item into the total price of
Contract 5/86, Yannacopoulos says, Lockheed “inflat[ed]
the contract’s total price and conceal[ed] the fact that
[it had retained] millions of dollars of [loan] funds that
defendants had been paid for the value of work they
never performed.”
Yannacopoulos waived this argument for purposes
of this appeal. Unlike his argument regarding the co-
production program line item — the falsity of
which Yannacopoulos also argued only in his reply
brief — Yannacopoulos failed to present any facts or
argument regarding the government recoupment line
item anywhere in his opening brief’s discussion of
Modification Five. The argument was waived. E.g.,
United States v. Diaz, 533 F.3d 574, 577 (7th Cir. 2008). 20

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No. 09-3037 41
(...continued) 20
brief, but a finding of waiver on that issue would not be
appropriate. See Hernandez v. Cook County Sheriff’s Office, 634
F.3d 906, 913 (7th Cir. 2011) (“While arguments made for the
first time in a reply brief are generally treated as waived, it
does not necessarily follow that arguments that are better
developed in a reply brief are waived.”). On this issue, how-
ever, we simply had no dots to connect until we received
Yannacopoulos’ reply brief, too late to have given Lockheed
notice it might need to justify the recoupment line item.
B. The Modification Six Claim
Yannacopoulos’ final claim on appeal is that Amend-
ment H0006 to Contract 5/86 (“Modification Six”), exe-
cuted on February 26, 1996, was also a reverse false
claim. In Modification Six, Lockheed agreed to refund
to Greece $29,926,515. Of that amount, $22,883,575 re-
lated directly to the aircraft sale and $7,042,940 related
to the co-production program — an amount that Lock-
heed later paid to the United States to be credited to the
Greek trust fund account. On appeal, Yannacopoulos
contends that Modification Six constituted a reverse
false claim designed to conceal Lockheed’s purported
“obligation to refund tens of millions of . . . unearned
[loan] funds” to the United States government, among
other things.
To establish a reverse false claim, Yannacopoulos
must first show that Modification Six was objectively
false in some way. See Wilson, 525 F.3d at 376. He asserts
that Modification Six was false in two separate respects.
First, he claims that Annex AK to Modification Six

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42 No. 09-3037
Lockheed argued in its response brief that Modification 21
Six contained no objectively false statements. In his reply,
Yannacopoulos could articulate only two alleged falsehoods.
To the extent he may believe that Modification Six was false
in some other respects, Yannacopoulos has waived any argu-
ment on those points.
was false because it “states that [the] defendants paid
to the Government . . . $29,047,706 GD collected from
Greece for recoupment,” despite the fact that $1,891,146
in “additional facilities rental recoupment” charges
included in that amount was allegedly unpaid by that
time. Second, he argues that Annex AG to Modification
Six was false because it “did not . . . truthfully reconcile
the payments received by [the] defendants with the
value of the work they performed.” Rather, it set forth
“new payment schedules . . . to collect additional [loan]
funds for the remaining contract work as if [the defen-
dants’] had retained no advance payments.” We address
each of these claims in turn, finding neither sufficient
to defeat summary judgment.21
1. The Annex AK Claim — Additional Facilities Rental
In Article 8.3 of Modification Six, Lockheed and Greece
agreed that line item 14, entitled “U.S. Government
Recoupments,” would be in the amount of $6,097,706.
(A. 408). As explained in Article 8.7 of Modification Six,
this line item represented “the amount of recoupment
that the U.S. Government has directed to be collected
by” Lockheed from Greece. This amount was to be “col-
lected by [Lockheed] and paid to the U.S. Government

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No. 09-3037 43
and is not included in the Contract Price nor . . . in the
Payment Schedule.” Article 8.7 went on to say that the
“method of payment, the frequency of payment[,] and
other payment terms and information are included in
ANNEX AK — U.S. GOVERNMENT RECOUPMENTS.”
Turning to Annex AK of Modification Six, one finds, as
of September 30, 1991, a total recoupment amount
of $29,047,706. This amount was comprised of two
discrete components: (1) $1,891,146 for what Annex
AK calls “Additional Facility Rental Recoupment”; and
(2) $27,156,560 for “Item Delivery Recoupment.” At
issue here is the amount for “Additional Facility Rental
Recoupment,” which was a charge owed to the United
States government for use of the United States’ Fort
Worth facility to produce F-16 aircraft for Greece.
Yannacopoulos argues that, because Article 8.7 dis-
cussed Annex AK in terms of “payment” rather than
“collection,” we must read that Annex as a representa-
tion that the defendants had paid the entire $29,047,706
recoupment amount to the United States Government by
the time the parties executed Modification Six. But see
Lamers, 168 F.3d at 1018 (noting that “imprecise state-
ments” are not actionable false statements). Because
General Dynamics allegedly never paid the $1,891,146
amount for “Additional Facilities Rental Recoupment,”
Yannacopoulos insists that Annex AK was false.
Yannacopoulos misreads the language of Modification
Six. While Annex AK says that, between March 31,
1989 and September 30, 1991, General Dynamics had
collected from Greece $29,047,706 in funds designated

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44 No. 09-3037
This is consistent with the minutes of Greece’s and Lock- 22
heed’s June 1995 negotiations regarding Modification Six,
which state that the modification “credits $22,950,000 against
Annex AK and [line item] 14” while the “remaining amount of
U.S. $6,097,706 consists of $4,206,560 in reserve and U.S.
$1,891,146 committed for payment to the U.S. Government for
facility rental.” (Emphasis added.)
for recoupment, it cannot be read to say that this entire
amount had already been repaid to the United States
government. Footnote 4 to that Annex states that, out of
that amount, “$22,950,000 [was] refunded to the Greece
commercial sales account of the [FMF] trust fund on
[May 17, 1991].” That amount related solely to “Item
Delivery Recoupment,” though, and not the “Addi-
tional Facility Rental” amount that Yannacopoulos
says was never paid. Footnote 5 to Annex AK went on
to explain that the remaining $6,097,706 recoupment
amount — $1,891,146 for “Additional Facility Rental”
and $4,206,560 for “Item Delivery Recoupment” — “has
been paid and moved below the line under [line item] 14.”
Footnote 5 — the crucial provision of Modification
Six — cannot reasonably be understood to say, falsely or
otherwise, that the $6,097,706 in line item 14 had already
been repaid to the United States government by the
time Modification Six was executed. Line item 14 was
the amount designated by the United States for col-
lection from Greece. By saying that this amount “has
been paid,” footnote 5 indicates that this designated
amount has already been paid by Greece, not by
Lockheed. Because Modification Six never says that22
the $1,891,146 for facility rental had already been paid

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No. 09-3037 45
This $29,926,515 refund should not be confused with the 23
$29,047,706 recoupment amount set out in Annex AK.
to the United States, it is irrelevant whether such a state-
ment would have been false if it had actually been made.
2. The Annex AG Claim — Reconciliation of Payments
Finally, Yannacopoulos argues that Annex AG of Modifi-
cation Six “implicitly represented” that an agreed-
upon refund of $29,926,515 to the United States govern-
ment “was the totality of [the loan] funds that [the] de-
fendants had been paid for the value of . . . work that
they never performed.” This “implicit” representation,23
he says, was false because Lockheed “secretly retained
over $21 million in advance payments for the value of
work it never performed.”
As noted above, a claim under the False Claims Act
requires proof of an objective falsehood. See Wilson,
525 F.3d at 376. In the context of a contractual agree-
ment such as Modification Six, an objective false-
hood requires proof that the parties did not actually reach
the agreement set forth therein. Yannacopoulos does not
claim that Lockheed and Greece did not actually agree
to the refunds set forth in Modification Six, however.
Instead, he says only that they “implicitly” represented
that the refunds provided for in that modification were
the only funds that Lockheed had been paid for work
it had not completed. But see Lamers, 168 F.3d at 1018
(noting that “imprecise statements” are not actionable
false statements). Yannacopoulos provides no eviden-

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46 No. 09-3037
Because we conclude that Yannacopoulos has failed to 24
adduce sufficient evidence showing that Modifications Five
and Six were false, we do not reach the United States’ argu-
ment that the defendants had an “obligation” to return money
to the United States as required for a reverse false claim.
7-26-11
tiary support for such a strained reading between the
lines of Modification Six, apparently believing that a
bald assertion about that modification’s meaning should
suffice. It does not. See, e.g., Drake v. Minn. Min. & Mfg.
Co., 134 F.3d 878, 887 (7th Cir. 1998) (“Rule 56 demands
something more than the bald assertion of the general
truth of a particular matter, rather it requires . . . specific
concrete facts establishing the existence of the truth of
the matter asserted.”) (quotation omitted).
At its core, Yannacopoulos’ complaint is that Lock-
heed and Greece reached an agreement that allowed
Lockheed “to collect additional [loan] funds for the re-
maining contract work as if it had retained no advance
payments.” But this is nothing more than an argument
that the parties should have agreed in Modification
Six to refund more than a mere $29,926,515. Even if that
may be true as a matter of contract law and sound public
policy, that would not make Modification Six false. And
absent evidence of a knowing falsehood, Yannacopoulos’
final claim stumbles right out of the gate.24
The judgment of the district court is AFFIRMED.

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