L-3 to Pay $25.6 Million in Gun-Sight Fraud Settlement

  • U.S. said company knew devices can fail in hot, cold weather
  • Troops used product in Iraq and Afghanistan, government said

L-3 Communications Corp. agreed to pay $25.6 million to settle claims that it knowingly supplied the U.S. military and law enforcement with thousands of defective holographic weapon sights that malfunction in hot, cold and humid conditions.

The company announced the settlement in a statement Tuesday, the same day the U.S. sued it for fraud in Manhattan federal court.

L-3’s EOTech unit has been paid “tens of millions of dollars” since 2004 by the Defense Department, Department of Homeland Security and Federal Bureau of Investigation for weapon sights that were supposed to perform in temperatures ranging from -40 degrees to 140 degrees Fahrenheit (-40 degrees to 60 degrees Celsius) and in humid weather, the government said in its lawsuit. 

The New York-based company failed to disclose tests that showed the sights were less accurate in extreme temperatures and degraded when exposed to moisture, the U.S. said.

“U.S. troops used EOTech’s optical sights in Iraq and Afghanistan, as well as in the jungle, mountains, desert and other extreme environmental conditions around the world,” the government said in its complaint.

In the complaint, the government named as defendants L-3, EOTech and EOTech’s president, Paul Mangano. The sought unspecified triple damages plus civil penalties of as much as $11,000 for each fraudulent claim.

L-3 dropped 1.1 percent to $124.61 in New York trading.

The settlement must be approved by a judge, L-3 said in the statement. A spokesman for the U.S. Attorney in Manhattan declined to comment on the accord.

The case is U.S. v. L-3 Communications EOTech Inc., 15-cv-09262, U.S. District Court, Southern District of New York (Manhattan).

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