Fiber Manufacturer Agrees to Pay the US $66 Million to Settle Alleged False Claim Act Violations
Some cases of alleged governmental fraud are so egregious that the government takes special efforts to pursue violators. This was the case last month when the Department of Justice announced that Toyobo Co. Ltd of Japan and its American subsidiary have agreed to pay $66 million to resolve clams that they violated the False Claims Act when they sold defective Zylon fiber used in bullet proof vests. The vests are used by federal, state, local and tribal law enforcement agencies. Specifically, the government alleges that between at least 2001 and 2005, Toyobo and its American subsidiary – Toyobo America Inc. – sold Zylon which they knew was defective. These defects rendered the vest unfit for use. Moreover, the government alleged that Toyobo actively continued to market its Zylon fiber despite knowing that the vests were defective. Toyobo, according to the Justice Department, marketed the material with the use of misleading degradation data that understated fiber’s defects. Toyobo’s actions are alleged to have delayed the government’s actions to determine the extent of Zylon’s flaws by several years. The government’s assertions about the defects in found in Zylon were backed by a National Institute of Justice (NIJ) study that found the vests to be effective in stopping bullets only 50% of the time. Eventually, the NIJ decertified all Zylon-containing vests
“This settlement sends a strong message to suppliers of products to the federal government that they must be truthful in their claims, particularly with regard to health and safety,” said Carol Fortine Ochoa, Inspector General of the General Services Administration. The Civil Division previously recovered more than $66 million from 16 entities involved in the manufacture, distribution or sale of Zylon vests. This included manufactures, weavers, trading companies and five individuals who were involved in the scheme. The US still has lawsuits pending against the former chief executive of Second Chance, and against Honeywell International Inc.
The settlement announced last month resolves allegations that arose from two lawsuits. The first was filed by the United States and the other was filed by Aaron Westrick, a law enforcement office formerly employed by Second Chance. Westrick’s lawsuit was filed under the qui tam, or whistleblower, provisions of the False Claims Act. This act permits private individuals to sue behalf of the government for false claims and to share in any recovery. This can be done using the services of a false claims act attorney. A false claims act attorney, or qui tam lawyer, specializes in all aspects of the False Claims Act. As a result of his actions, Dr. Westrick will receive $5,775,000 as his share of the recovery.