A Justice Department investigation into alleged defense fraud by Northrop has prompted the aerospace firm to enter into negotiations for a potential plea bargain, it was reported Saturday.

The Justice Department is expected to seek a criminal indictment in the near future if the two sides do not come to an agreement, sources close to the investigation told The Los Angeles Times.Northrop, which has been the target of an investigation by a federal grand jury in Los Angeles, is suspected of involvement in at least five separate issues of defense fraud - including falsification of testing cruise missile parts, irregular purchasing procedures on the MX nuclear missile project and foreign payments to South Koreans.