3M Company Agrees To Pay $9.1 Million To Resolve Allegations That It Supplied The United States With Defective Dual-Ended Combat Arms Earplugs

The U.S. Department of Justice released the below information:

The Department of Justice announced today that 3M Company (3M), headquartered in St. Paul, Minnesota, has agreed to pay $9.1 million to resolve allegations that it knowingly sold the dual-ended Combat Arms Earplugs, Version 2 (CAEv2) to the United States military without disclosing defects that hampered the effectiveness of the hearing protection device. 

“The Department of Justice is committed to protecting the men and women serving in the United States military from defective products and fraudulent conduct,” said Acting Assistant Attorney General Chad A. Readler of the Department’s Civil Division.  “Government contractors who seek to profit at the expense of our military will face appropriate consequences.”

“Through rigorous enforcement of the False Claims Act, we protect taxpayer dollars from waste, fraud, and abuse,” said U. S. Attorney Sherri Lydon for the District of South Carolina.  “And in this case in particular, we are proud to defend the integrity of our military programs and ensure that our men and women in uniform are adequately protected as they serve our country.”

"Today's settlement will ensure that those who do business with the government know that their actions will not go unnoticed," said Frank Robey, director of the U.S. Army Criminal Investigation Command's Major Procurement Fraud Unit. "Properly made safety equipment, for use by our Soldiers, is vital to our military's readiness. Our agents will respond robustly to protect the safety of our military."

“This settlement demonstrates the commitment of the Defense Criminal Investigative Service and our law enforcement partners to hold companies accountable for supplying substandard products, in particular products that could directly impact our service members’ health and welfare.  DCIS protects the integrity of Defense Department programs by rooting out fraud, waste, and abuse that negatively affect the wellbeing of our troops,” said Special Agent in Charge Robert E. Craig, Jr., DCIS Mid-Atlantic Field Office.

The settlement announced today resolves allegations that 3M violated the False Claims Act by selling or causing to be sold defective earplugs to the Defense Logistics Agency.  Specifically, the United States alleged that 3M, and its predecessor, Aearo Technologies, Inc., knew the CAEv2 was too short for proper insertion into users’ ears and that the earplugs could loosen imperceptibly and therefore did not perform well for certain individuals.  The United States further alleged that 3M did not disclose this design defect to the military. 

The allegations resolved by the settlement were brought in a lawsuit filed under the qui tam, or whistleblower, provisions of the False Claims Act.  The act permits private parties to sue on behalf of the government when they believe that defendants submitted false claims for government funds and to share in any recovery.  As part of today’s resolution, the whistleblower will receive $1,911,000. 

The settlement was the result of a coordinated effort by the Civil Division of the Department of Justice, the United States Attorney’s Office for the District of South Carolina, the Army Criminal Investigation Command, and the Defense Criminal Investigative Service.        

The case is captioned United States ex rel. Moldex-Metric v. 3M Company, Case No. 3:16-cv-1533-MBS (D.S.C.).  The claims resolved by the settlement are allegations only, and there has been no determination of liability. 

Former Army Contracting Official Sentenced In Pentagon Bribery Scheme

The U.S. Justice Department released the below information:

ALEXANDRIA, VA—James Glenn Warner, 44, of Manassas, Virginia, was sentenced today to 42 months in prison, followed by three years of supervised release, for soliciting a $500,000 bribe from executives working for a private company on a contract that Warner managed out of the Pentagon. Warner was also ordered to pay $50,000 in forfeiture.

According to court documents, in October 2014, Warner made arrangements to meet with two executives of Company A, a Virginia-based company which held a five-year contract with the Department of the Army worth up to $120 million. At the meeting, which took place at a restaurant located in the Pentagon Centre in Arlington, Virginia, Warner instructed the two executives to communicate with him by typing messages into his cell phone, which was passed around the table.

Warner then passed a menu to the two executives. Inside the plastic covering for the center section of the menu was a piece of paper which outlined a bribe and extortion solicitation, suggesting that if Company A paid $500,000 it would secure a contract renewal from the Department of the Army and that alleged damaging information about Company A would be destroyed.

The Company A executives declined Warner’s solicitation, reported the conduct and began cooperating with law enforcement agents. Acting at the direction of law enforcement, a Company A executive then met with Warner on five subsequent occasions, paying Warner a total of $150,000 cash bribes out of the total $500,000 solicited by Warner. On Jan. 28, 2015, at the last of these meetings, Warner was arrested while in possession of $100,000 in bribe payments.

Dana J. Boente, U.S. Attorney for the Eastern District of Virginia; Andrew G. McCabe, Assistant Director in Charge of the FBI’s Washington Field Office; Robert E. Craig, Special Agent in Charge, Mid Atlantic Field Office, Defense Criminal Investigative Service; and Frank Robey, Director, Major Procurement Fraud Unit, U.S. Army Criminal Investigation Command, made the announcement after the plea was accepted by U.S. District Judge Leonie M. Brinkema.

This case was investigated by the FBI’s Washington Field Office, the Defense Criminal Investigative Service, and the U.S. Army Criminal Investigative Command. Assistant U.S. Attorneys Kosta S. Stojilkovic and Mark D. Lytle are prosecuting the case.

Any person who believes they may have information regarding public corruption or fraud in the Northern Virginia area is encouraged to call the FBI’s Northern Virginia Public Corruption Hotline at 703-686-6225, or the Defense Criminal Investigative Service Hotline at 800-424-9098, or the U.S. Army Criminal Investigative Command Hotline at 844-276-9243.

A copy of this press release may be found on the website of the U.S. Attorney’s Office for the Eastern District of Virginia. Related court documents and information may be found on the website of the District Court for the Eastern District of Virginia or on PACER by searching for Case No. 1:15-cr-77.

Two Former Officers Pled Guilty In Connection With Fraudulent U.S. Army Contracts Scheme

The U.S. Justice Department released the below information:

In San Antonio this morning, New Braunfels, Texas resident Lawrence Peter Fenti and Manhattan, Kansas resident Heidi Lynn Webster pleaded guilty to defrauding the United States in connection with U.S. Army contracts worth millions of dollars for medical equipment and personnel, announced United States Attorney Robert Pitman.

Fenti is a 43-year-old former non-commissioned officer in charge of Base Realignment and Closure issues for Brooks Army Medical Center (BAMC) radiology. Webster is a 50-year-old former U.S. Army officer physician and civilian contractor who specialized in radiology.

Appearing before Chief U.S. District Judge Fred Biery, Fenti and Webster pleaded guilty to one count of conspiracy and one count of bribery. The conspiracy included intent to defraud the United States; violate the government conflict of interest law; commit bribery; commit wire fraud; make false claims against the United States; make false statements to federal authorities; and commit money laundering.

By pleading guilty, the defendants admitted to conspiring together since 2007 to fraudulently secure multiple army contracts and sub-contracts for radiology equipment and services by using Fenti’s position of influence, taking advantage of a prime contractor’s non-competitive bidding status, making false statements and fraudulent claims, and bribing army personnel and army contractors.

Those contracts included a $2 million BAMC magnetic resonance imaging (MRI) contract in June 2008, a $4.9 million BAMC MRI contract in July 2008, a $633,406.69 BAMC staffing contract in September 2008, and a $336,600 MRI contract in September 2009 for Womack Army Medical Center at Fort Bragg, North Carolina. Webster also admitted to paying Fenti thousands of dollars for his role in the overall scheme.

“The defendants in this case treated the American taxpayers like their own personal ATMs, rigging bids for government contracts and inflating invoices for radiology equipment and services. This prosecution should send a message to would-be thieves that we are keeping a close watch on government contracting and when we detect fraud we will respond with the full force of the criminal law,” stated U.S. Attorney Pitman.

Per their plea agreements, Fenti and Webster face a maximum six years in federal prison. During the investigation, authorities have seized approximately $500,000, much of which has been forfeited to the government. In addition, the government is seeking a monetary judgment against Fenti in the amount of $402,485.35, as well as a $613,828 monetary judgment against Webster, representing the amount of proceeds obtained directly or indirectly as a result of their fraudulent scheme. Sentencing will occur after the completion of a pre-sentence report by the U.S. Probation Office.

A third defendant in this case, 43-year-old John Walter Hoffman, owner/operator of Hoffman Surgical Devices Inc. in San Antonio, is awaiting trial on charges of conspiracy to commit wire fraud, money laundering, wire fraud, and making false statements to U.S. Army authorities. Jury selection is scheduled for March 3, 2014.

This investigation was conducted by the U.S. Army Criminal Investigations Division (Army CID), the Internal Revenue Service-Criminal Investigation (IRS-CI), Defense Criminal Investigative Service (DCIS), and the Federal Bureau of Investigation (FBI). Assistant United States Attorney James Blankinship is prosecuting this case on behalf of the government.

Army Soldier And Civilian Sentenced On Bribery Charges For Facilitating Theft Of Fuel In Afghanistan

The U.S. Justice Department released the below information today:

A former U.S. Army Sergeant and a co-conspirator have been sentenced in the District of Colorado for their roles in stealing fuel at Forward Operating Base (FOB) Fenty, Afghanistan, Acting Assistant Attorney General Mythili Raman of the Justice Department’s Criminal Division announced. 

U.S. Army Sergeant Christopher Weaver, 30, of Fort Carson, Colo., was sentenced on Oct. 28, 2013, to serve 37 months in prison.  Weaver pleaded guilty Oct. 20, 2012, and was sentenced by U.S. District Court Judge Marcia S. Krieger.                    

Jonathan Hightower, 31, of Houston, Texas, who worked at FOB Fenty as a civilian employee of a contractor and who had conspired with Weaver, was also sentenced on Oct. 28, 2013, to serve 27 months in prison. He pleaded guilty Aug. 3, 2012, and was sentenced by U.S. District Court Judge William J. Martinez.

A third conspirator, former soldier Stephanie Charboneau, pleaded guilty on Sept. 5, 2013, before U.S. District Court Judge Philip A. Brimmer.  Her sentencing is set for Dec. 9, 2013.

Weaver and Hightower were also ordered to pay $1,225,000 in restitution, jointly with Charboneau.  Hightower was also ordered to pay $400,000 in restitution for a related fuel theft scheme that was the subject of the prosecution.

According to court documents, from in or about January 2010 through June 2010, Weaver, Hightower and Charboneau were involved in handling the uploading and transportation of fuel from FOB Fenty, near Jalalabad, Afghanistan, to nearby military bases. 

Weaver and Charboneau created false and fraudulent documents purporting to authorize the transport of fuel from FOB Fenty to other military bases, even though no legitimate fuel transportation was required.  Hightower was a civilian who worked at the base’s “fuel point” uploading fuel trucks, occasionally filling the trucks with fuel to be stolen and taking other steps to assist the conspiracy. 

At the direction of Weaver and Charboneau, fuel truck drivers used the fraudulent documents to justify the filled trucks’ departures from FOB Fenty. 

In truth, after the filled fuel truck left the base, the fuel was simply stolen, and Weaver and Charboneau would receive cash from the representative of the trucking company that supplied the fuel trucks.  The cash would be split among the three conspirators.     

All three conspirators pleaded guilty to receiving payments from a representative of the trucking company in exchange for facilitating the theft of approximately 70 5,000-gallon truckloads of fuel.  Each of the three acknowledged that the loss to the United States was in excess of $1 million.
The cases were investigated by the Special Inspector General for Afghanistan Reconstruction, the Department of the Army, Criminal Investigations Division (CID); the Defense Criminal Investigative Service; and the FBI.

These cases were handled by Special Trial Attorney Mark H. Dubester of the Criminal Division’s Fraud Section, who is on detail from the Special Inspector General for Afghanistan Reconstruction (SIGAR).