Defense Contract Fraud Whistleblower to Receive $235,000 from DOJ Qui Tam Action

The Department of Justice (“DOJ”) announced a settlement with weapons manufacturer Capco, on Tuesday, December 3, 2019. The government recovered $1,025,429 from Capco, LLC, a defense contractor in Grand Junction Colorado, through the settlement of allegations that it defrauded the U.S. Army when manufacturing M320 grenade launchers from 2016-2018. Whistleblower James Cole alerted the government to Capco’s alleged failure to comply with the arms contract, bringing a qui tam action against the company under the False Claims Act.

The DOJ alleged that Capco knowingly shipped grenade launchers with barrels that did not conform to contract specifications and labeled those shipments as compliant with contract specifications – dangerously misrepresenting the condition of arms sent to U.S. Army troops. The DOJ complaint also contained allegations that the firing pins on two shipments were incorrect, and Capco knowingly lied to the government claiming that these pins conformed with contract specifications – defrauding the Army and putting its troops at risk.

Under the False Claims Act, private citizens with knowledge of fraud against the United States may present those allegations to the government by bringing a lawsuit on behalf of the United States under seal. If the government’s investigation substantiates those allegations and the United States obtains a monetary recovery under the False Claims Act, the private citizen may share in that monetary recovery. In this case, Mr. Cole will receive $235,000 of the over $1 million recovered by the government in this settlement of his False Claims Act qui tam action.

In the DOJ announcement, United States Attorney Jason Dunn stated: “We entrust our defense contractors to manufacture equipment of the highest quality for the men and women who serve our country in the U.S. Armed Forces. Any breakdown in the production process must be swiftly and honestly addressed and we will hold contractors fully responsible for fraudulently covering up production problems.”

False Claims Act qui tam actions are a vital tool for preventing fraud and uncovering defense contract fraud. Whistleblowers like Mr. Cole assist in the government’s swift action against contractors aiming to defraud the government.

DOJ press release: Grand Junction Weapons Manufacturer CAPCO To Pay Over $1 Million To Resolve Allegations Of Fraud As To Grenade Launchers It Supplied To The U.S. Army

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