Bryan Swanton

Thanks to whistleblower Bryan Swanton, the U.S. government recovered over $600,000 from a scientific instrument technology company which allegedly defrauded the government by falsely certifying that its Chinese-manufactured products were made in the U.S. when selling scientific instruments to federal agencies and national laboratories.

Under the False Claims Act’s qui tam provisions, Swanton was awarded $124,500 as part of the 2022 settlement for his role in exposing the alleged fraud scheme. He further received $168,000 in attorney fees and costs.

Blowing the Whistle

In 2019, Swanton began working for Instec Inc. as a technical salesperson but was promptly promoted to sales manager. Instec is a scientific instrument technology company based in Boulder, Colorado which manufactures precision thermal control tools designed for scientific research.

Swanton’s job duties involved handling new incoming inquiries, following up on old inquiries, understanding customers research needs, recommending equipment, providing quotes, tracking purchase orders, and following up with potential customers to try to win deals.

In the course of these duties, Swanton came to believe that Instec and its owner, Henry Zou, were engaged in a fraud scheme in which it concealed the origin of its products’ manufacturing in order to circumvent Buy American Act (BAA) requirements in selling products to federal agencies and national laboratories.

The BAA creates a preference that products sold to the federal government are made domestically. Swanton believed that Instec was defrauding the U.S. government when selling its products to federal agencies and national laboratories by certifying that these products were made in the U.S. when they were in fact manufactured in China.

Swanton believed that this misconduct predated his arrival at Instec and included deals to sell products to the Naval Research Laboratory, the Lawrence Berkeley National Laboratory, Edgewood Chemical Biological Center, and the NASA Goddard Space Flight Center among other federal laboratories.

In 2020, Swanton filed a detailed qui tam lawsuit against Instec outlining and detailing his allegations.

Major Recoveries

Following Swanton’s qui tam suit, the U.S. Department of Justice decided to intervene and pursue charges against Instec and Zou. In September 2022, it announced that it reached a settlement in the case in which Instec and Zou agreed to pay $625,000.

Under the False Claims Act, qui tam whistleblowers are eligible to receive between 15-30% of the proceeds collected as a result of their whistleblowing. Swanton was awarded $124,500 (19.92%) as his share of the DOJ settlement.

In announcing the settlement, government officials stressed the importance of cracking down on such a fraudulent scheme, which was all made possible thanks to Swanton’s whistleblowing.

“When companies commit to manufacture their goods in the United States, then shirk that commitment, they violate the law and undermine American manufacturing jobs, too,” said U.S. Attorney Cole Finegan for the District of Colorado.

“Federal contractors cannot simply dispense with contractual requirements designed to protect American industry,” added Department of Energy Inspector General Teri L. Donaldson.

“The Buy American Act promotes American businesses and protects U.S. economic interests,” stated Assistant Inspector General for Investigations Robert Steinau for the NASA Office of Inspector General (OIG).

Following the settlement, litigation continued in the case over whether Swanton was entitled to attorney fees. On April 29, 2024, a federal judge awarded $168,000 in attorneys fees and costs to Swanton and his attorneys, Kohn, Kohn and Colapinto, LLP and co-counsel on the case, attorney Ken Harmon.