Colo. defense contractor pays $1 million to settle export-related False Claims Act claims

by Ben Vernia | November 1st, 2010

On October 29, the Department of Justice announced that Rocky Mountain Instruments of Colorado – which pleaded guilty to export-related charges in June, 2010 – has agreed to pay $1 million to resolve allegations that as a sub-contractor, it caused prime defense contractors to submit false claims. According to DOJ’s press release:

The Lafayette, Colo.-based company is alleged to have submitted claims for payment to various Defense Department prime contractors. The contractors, it is alleged, in turn claimed reimbursement from the government for optical and laser products manufactured overseas using sensitive technical data exported by RMI in violation of the Arms Export Control Act and International Traffic in Arms Regulations.

On June 23, 2009, RMI, a manufacturer of optical components used in laser and imaging applications, filed a petition for bankruptcy under Chapter 11 of the Bankruptcy Code in the U.S. Bankruptcy Court for the District of Colorado. To settle the False Claims Act allegations, RMI has agreed to pay the United States $1 million as part of its bankruptcy reorganization. This amount is in addition to a $1 million criminal forfeiture and five year probationary term ordered in connection with RMI’s June 22, 2010, plea of guilty to knowingly and willfully exporting defense articles without a license in United States v. Rocky Mountain Instrument Company, 10-cr-00139-WYD-01 (D. Colo.).

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