March 28, 2016
Tennessee-based defense contractor Kilgore Flares Company
and one of its subcontractors, New York-based ESM Group Inc.
, agreed to pay $8 million to resolve charges they violated the False Claims Act by selling defective and illegally imported infrared countermeasure flares to the U.S. Army and, for ESM, knowingly evading U.S. customs duties. The allegations first arose in a whistleblower lawsuit filed under the qui tam
provisions of the False Claims Act by Reade Manufacturing Company
, a domestic manufacturer of magnesium powder which is used in the flares. The company will receive a whistleblower award of $400,000 from the proceeds of the government’s recovery from ESM. Whistleblower Insider