A settlement has been reached to resolve False Claims Act allegations against Kilgore Flares Company and ESM Group Inc.
The whistleblowers' share of the settlement will be $400,000 as part of the settlement with ESM Group Inc.
The allegations arose from a lawsuit, claiming that Kilgore Flares Company and ESM Group Inc violated the False Claims Act by selling or conspiring to sell defective infrared countermeasure flares to the U.S. Army and, in the case of ESM, knowingly evading customs duties owed to the United States.
On March 28, 2016, Department of Justice announced, that from July 2003 through May 2005, ESM knowingly misrepresented the content of ultrafine magnesium powder imported from the People’s Republic of China in order to avoid paying antidumping duties owed to the United States.
The government also alleged that from March 2005 through August 2006, Kilgore used the illegally imported Chinese magnesium powder purchased from ESM in the countermeasure flares it sold to the U.S. Army. The Chinese magnesium powder allegedly violated both the requirement for domestically produced powder and engineering specifications required by the contracts.
Kilgore Flares Company and ESM Group Inc agreed to pay $6 million and $2 million to resolve the government’s allegations.
