Department of Defense Contractor ATK Launch Systems, Inc. To Pay Government Nearly $37 Million To Settle False Claims Act Lawsuit

On April 23, 2012 the Department of Justice announced a settlement it reached with ATK Launch Systems, Inc. in connection with a False Claims Act Lawsuit filed against the company in 2006.  Under the terms of the settlement, ATK will pay a total of $36,967,160.00 to resolve allegations that the company sold defective and dangerous illumination flares to the Army and the Air Force.

According to the allegations, ATK knowingly sold defective LUU-2 and LUU-19 flares to the Department of Defense.  These flares are three-foot long tubes filled with propellant that burns at over 3,600 degrees Fahrenheit for over five minutes.  They are attached to parachutes and are used for nighttime combat and covert search and rescue operations.  Notably, they have been used extensively by the United States Military in both Iran and Afghanistan.  The government specifications required ATK’s flares to withstand a 10-foot drop test without exploding or igniting.  ATK allegedly never tested their flares before they were sold to the Department of Defense.  Additionally, ATK allegedly knew that their flares could not withstand the drop test.  By not performing the critical testing that the government required, military personnel were put at a serious risk for death or injury.  Aside from their irresponsible behavior, ATK’s alleged actions were selfish, greedy, and morally unacceptable.  According to the government, the company risked the lives of countless individuals of the armed forces in order to make a quick buck.

Under the terms of the settlement agreement, ATK will pay the US $21 million in cash.  They will also retrofit the 76,000 defective flares that are still in the government’s inventory.  The repairs are valued at nearly $16 million.

The whistleblower in this case is Kendall Dye.  Dye became the flare program manager for ATK in 2005.  According to Dye, once he began working for the company, he realized that ATK had been aware of defects in the flares since 2000, but that they were not conducting tests on the flares before selling them to the Air Force.  Additionally, once ATK performed the tests and confirmed their beliefs, they did not inform their military consumers that they had known of the defects for years.  When Dye complained about this dishonesty to his supervisors, he was told to keep his mouth shut.  Dye’s bravery for turning his employer in and taking active steps to rescue the lives of our military personnel is extraordinarily commendable.  If Dye had not taken these actions, the American taxpayers would have allegedly paid for the faulty flares and the burden of fixing the remaining flares would fall on our shoulders as well.  Dye will receive between 15 to 25% of the settlement as his reward for alerting the government about ATK’s alleged wrongdoing.

Doing the right thing and turning your fraudulent employer in to the government can be a daunting task.  With help from experienced attorneys, you can be sure that you are taking every precaution to protect yourself and to stop your employer’s unlawful behavior.  For more information on how to file a qui-tam lawsuit, contact the attorneys at Tycko & Zavareei today.

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