A Grand Junction weapons manufacturer will pay more than $1 million to the U.S. Army for selling the service defective grenade launchers with parts that federal prosecutors say the company knew were not up to standard.
The company, Capco, substituted the high-quality steel used for a key part of the weapon for a cheaper, less durable steel that affected how the grenade launchers worked, according to a news release sent Tuesday by the U.S. Attorney’s Office for the District of Colorado announcing the settlement.
The company was aware that it used the wrong material in the grenade launchers, but shipped them to the Army anyways, according to federal prosecutors. A supervisor told the company’s quality-testing engineers not to speak of the substitute to anybody, according to the civil lawsuit filed in the case.
But one engineer did not stay quiet.
The whistleblower, James Cole, told the company’s vice president of operations and a manager about the faulty parts in April 2017 but was ignored. Five months later, he was laid off, though the company hired another person to fill his position three days later, according to the lawsuit. The layoff was retaliation, according to the lawsuit.
Cole then approached the government and in November 2017 filed a complaint under the False Claims Act. Jason Dunn, the U.S. attorney for Colorado, on Tuesday announced the settlement of the two-year case.
“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,” Dunn said in a statement. “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.”
A company spokeswoman said Capco did not admit in its settlement to the allegations in the lawsuit and that the company cooperated fully with the investigation.
“Every challenge gives us choices about how to respond,” Capco CEO Cordell Bennigson said in a statement. “Our team chose to address this complaint in a way that encompasses the values we embrace – transparency, trust, commitment and extreme reliability.”