Itochu pays $6.75 million to settle False Claims Act allegations regarding defective bulletproof vest fabric

by bvernia | December 9th, 2009

On December 7, DOJ announced a settlement of False Claims Act allegations with the Japanese firm Itochu Corp., and its American subsidiary. The firms imported and sold defective Zylon fibers for use in manufacturing bulletproof vests sold to American law enforcement agencies, DOJ stated. The companies agreed to pay $6.75 million. According to the government’s press release:

The Itochu companies imported the Zylon fiber on behalf of the Zylon manufacturer, Toyobo Co. Ltd. of Japan. The United States alleged that the Itochu companies were aware that the fiber degraded quickly over time and that the companies knew that this degradation rendered bullet-proof vests containing woven Zylon unfit for use. The government further alleged that, despite this knowledge, Itochu personnel actively participated in the marketing of the Zylon fiber and downplayed the extent of the degradation problem.

The case arises out of a broader investigation into the sale of Zylon, and has already resulted in recovery of $47 million from five manufacturers. DOJ stated that it also has suits pending against Toyobo Co., Honeywell Inc., Lincoln Fabrics, Ltd., Second Chance Body Armor Inc., and First Choice Armor Inc., and several former executives of Second Chance and First Choice.

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