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Case Number: 1:08-cv-00961
Judge: Paul L. Friedman
Court: United States District Court for the District of Columbia (Washington County)
Plaintiff's Attorney: United States Attorney’s Office
Description: Washington, DC: civil litigation lawyers represented Defendant accused of violating the False Claims Act by selling defective material for bullet proof vests used by law enforcement officers.
The United States alleged that, between 2000 and 2005, Honeywell sold its patented Z Shield material to Armor Holdings, a bullet proof vest manufacturer, despite Honeywell knowing that Z Shield degraded quickly over time in heat and humidity and was not suitable for ballistic use. Armor Holdings’ vests containing Honeywell’s Z Shield were purchased by federal agencies under a General Services Administration (GSA) contract, and by various state, local and Tribal law enforcement authorities that were partially funded by the Justice Department’s Bulletproof Vest Partnership program.
“This settlement and the Justice Department’s industry-wide investigation demonstrate the department’s resolve to hold accountable those businesses and individuals who supplied Zylon-containing bullet proof vests, even after learning that the material degraded in a way that could compromise its ability to stop a bullet,” said Principal Deputy Assistant Attorney General, Brian M. Boynton, head of the Justice Department’s Civil Division. “The safety of law enforcement officers is of paramount importance, and we are committed to ensuring that taxpayer dollars go only to the high-quality ballistic protection our first responders deserve.”
“It is completely unacceptable for a company to produce and sell faulty products that law enforcement officers rely on for their safety,” said Inspector General Carol F. Ochoa of the GSA Office of Inspector General (GSA-OIG). “I appreciate the relentless efforts GSA OIG employees and our law enforcement partners dedicated to this case.”
The settlement concludes over a decade of litigation and ends the Justice Department’s long-running investigation of the body armor industry’s sale of defective Zylon bullet proof vests to the government. The United States previously recovered over $133 million in settlements with 17 entities and individuals involved in all stages of the body armor supply chain.
The resolution obtained in the Honeywell litigation was the result of efforts by the Justice Department’s Civil Division, Commercial Litigation Branch, Fraud Section, with assistance from the GSA-OIG; the Department of Commerce, Office of Inspector General; the Department of Homeland Security, Office of Inspector General; Treasury Inspector General for Tax Administration; the Department of Energy, Office of the Inspector General; the Defense Criminal Investigative Service; the U.S. Criminal Investigative Command; the Air Force Office of Special Investigations; and the Defense Contracting Audit Agency.
Fraud Section Attorneys Alicia Bentley, Jennifer Chorpening and Tom Morris handled the litigation and settlement.
31 U.S.C. 3729 provides:
(a) Liability for Certain Acts.—
(1) In general.—Subject to paragraph (2), any person who—
(A) knowingly presents, or causes to be presented, a false or fraudulent claim for payment or approval;
(B) knowingly makes, uses, or causes to be made or used, a false record or statement material to a false or fraudulent claim;
(C) conspires to commit a violation of subparagraph (A), (B), (D), (E), (F), or (G);
(D) has possession, custody, or control of property or money used, or to be used, by the Government and knowingly delivers, or causes to be delivered, less than all of that money or property;
(E) is authorized to make or deliver a document certifying receipt of property used, or to be used, by the Government and, intending to defraud the Government, makes or delivers the receipt without completely knowing that the information on the receipt is true;
(F) knowingly buys, or receives as a pledge of an obligation or debt, public property from an officer or employee of the Government, or a member of the Armed Forces, who lawfully may not sell or pledge property; or
(G) knowingly makes, uses, or causes to be made or used, a false record or statement material to an obligation to pay or transmit money or property to the Government, or knowingly conceals or knowingly and improperly avoids or decreases an obligation to pay or transmit money or property to the Government,
is liable to the United States Government for a civil penalty of not less than $5,000 and not more than $10,000, as adjusted by the Federal Civil Penalties Inflation Adjustment Act of 1990 (28 U.S.C. 2461 note; Public Law 104–410 1), plus 3 times the amount of damages which the Government sustains because of the act of that person.
(2) Reduced damages.—If the court finds that—
(A) the person committing the violation of this subsection furnished officials of the United States responsible for investigating false claims violations with all information known to such person about the violation within 30 days after the date on which the defendant first obtained the information;
(B) such person fully cooperated with any Government investigation of such violation; and
(C) at the time such person furnished the United States with the information about the violation, no criminal prosecution, civil action, or administrative action had commenced under this title with respect to such violation, and the person did not have actual knowledge of the existence of an investigation into such violation,
the court may assess not less than 2 times the amount of damages which the Government sustains because of the act of that person.
(3) Costs of civil actions.—A person violating this subsection shall also be liable to the United States Government for the costs of a civil action brought to recover any such penalty or damages.
(b) Definitions.—For purposes of this section—
(1) the terms “knowing” and “knowingly”—
(A) mean that a person, with respect to information—
(i) has actual knowledge of the information;
(ii) acts in deliberate ignorance of the truth or falsity of the information; or
(iii) acts in reckless disregard of the truth or falsity of the information; and
(B) require no proof of specific intent to defraud;
(2) the term “claim”—
(A) means any request or demand, whether under a contract or otherwise, for money or property and whether or not the United States has title to the money or property, that—
(i) is presented to an officer, employee, or agent of the United States; or
(ii) is made to a contractor, grantee, or other recipient, if the money or property is to be spent or used on the Government's behalf or to advance a Government program or interest, and if the United States Government—
(I) provides or has provided any portion of the money or property requested or demanded; or
(II) will reimburse such contractor, grantee, or other recipient for any portion of the money or property which is requested or demanded; and
(B) does not include requests or demands for money or property that the Government has paid to an individual as compensation for Federal employment or as an income subsidy with no restrictions on that individual's use of the money or property;
(3) the term “obligation” means an established duty, whether or not fixed, arising from an express or implied contractual, grantor-grantee, or licensor-licensee relationship, from a fee-based or similar relationship, from statute or regulation, or from the retention of any overpayment; and
(4) the term “material” means having a natural tendency to influence, or be capable of influencing, the payment or receipt of money or property.
(c) Exemption From Disclosure.—Any information furnished pursuant to subsection (a)(2) shall be exempt from disclosure under section 552 of title 5.
(d) Exclusion.—This section does not apply to claims, records, or statements made under the Internal Revenue Code of 1986.
Outcome: Honeywell agreed to pay $3.35 million to settle the claim that it used defective Zylon for use in body armor.
10/24/2022 253 MANDATE of USCA as to 245 Notice of Appeal to DC Circuit Court filed by HONEYWELL INTERNATIONAL, INC. ; USCA Case Number 21-5179. (Attachment: # 1 USCA Judgment August 30, 2022)(zjm) (Entered: 10/25/2022)