Hexcel to pay $15 million to settle accusations
Hexcel, which is based in Stamford, agreed to cooperate in the federal government's investigation of other participants in actions that authorities say violate the False Claims Act.
"While we deny any liability regarding the Department of Justice's assertions, in order to avoid the distraction, cost and uncertainties of litigation we entered into a settlement with the Department of Justice," Hexcel spokesman Michael Bacal said.
The federal government accused Hexcel of knowing that Zylon fiber it wove into fabric used in bulletproof vests was defective and degraded quickly when exposed to heat, light and humidity. The Zylon was supplied by Japan's Toyobo Corp. and the vests were sold by Second Chance Body Armor, DHB Inc. and its subsidiaries, Armor Holdings and its subsidiaries, and Gator Hawk Armor.
In the second quarter, Hexcel established a $15 million reserve related to the investigation.
The vests were purchased and used by the U.S. directly and by various state, local and tribal law enforcement agencies reimbursed with federal funds, according to the Department of Justice.
"We will never tolerate fraud that places our first responders at risk," Peter Keisler, acting attorney general, said in a statement.
Toyobo officials in June said the charges were "without basis."
Shares of Stamford, Conn.-based Hexcel dipped 17 cents to $24.40 in afternoon trading.
WBJ Web Partners
Most Recent
Most Recent
0 Comments