Three bankrupt body armor companies pay $1 million to settle False Claims Act allegations

by Ben Vernia | November 8th, 2011

On November 7, the Department of Justice announced that three bankrupt corporations have, after the sale of their assets, paid $1 million to settle allegations that they sold defective bulletproof vests. The payments are part of an investigation and suit against several manufacturers. According to DOJ’s press release:

Debtor companies Point Blank Solutions Inc. (formerly DHB Industries Inc.), Point Blank Body Armor Inc. and Protective Apparel Corporation of America Inc. (collectively, “Point Blank”) have paid the United States $1 million to resolve allegations that they violated the False Claims Act by knowingly manufacturing and selling defective Zylon bulletproof vests, the Justice Department announced today. The payment was made to the United States at the closing of the sale of the bankrupt companies’ assets.

The United States alleged that the Pompano Beach, Fla.,and Jacksboro, Tenn., companies manufactured and sold Zylon bulletproof vests despite possessing information showing that the Zylon materials degraded quickly over time and were not suitable for ballistic use. The Point Blank vests were purchased by the federal government, and by various state, local, and tribal law enforcement agencies that were partially reimbursed by the United States under the Justice Department’s Bulletproof Vest Partnership Grant Program.

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This settlement is part of a larger investigation of the body armor industry’s use of Zylon in body armor. The United States has settled with nine other participants in the Zylon body armor industry for more than $61 million. Additionally, the United States has pending lawsuits against Toyobo Co., the manufacturer of the Zylon fiber, and Honeywell Inc., Second Chance Body Armor Inc. and First Choice Armor Inc., which were involved in the production or sale of Zylon body armor. As part of today’s agreement, Point Blank has pledged cooperation with the United States’ ongoing efforts.

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