Bankrupt, convicted Colorado company pays $1 million to settle export-related False Claims Act allegations

by Ben Vernia | July 8th, 2011

The Department of Justice announced a settlement today of $1 million with Rocky Mountain Instrument Company which pleaded guilty in 2010 to violating export restrictions on sensitive technology. According to DOJ’s press release:

The United States has reached a settlement with Rocky Mountain Instrument Company (RMI) to resolve claims that the manufacturer violated the False Claims Act, the Justice Department announced today. 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.).

The case appears to have been an agency referral, and not related to a qui tam suit.

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