Armor Holdings settles federal probe for $30M

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Posted on 7th October 2008 by Gordon Johnson in Uncategorized

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Date: 10/7/2008 1:03 PM

By DONNA BORAK
AP Business Writer


WASHINGTON (AP) _ Armor Holdings Inc. will pay $30 million to resolve allegations that it knowingly made and then sold defective bulletproof vests to law enforcement personnel, the Justice Department said Tuesday.

Armor Holdings, now a subsidiary of British defense conglomerate BAE Systems PLC, allegedly had information that showed ballistic materials known as the Zylon Shield, “degraded quickly over time” and were unfit for use by state and local law enforcement agencies, according to the government settlement.

A representative from BAE Systems was not immediately available to comment Tuesday afternoon. Armor Holdings denied any responsibility or wrongdoing related to the government’s complaints in its agreement.

The latest settlement is part of a widespread federal investigation of several vendors who played a role in making the defective bulletproof vests. The government has previously settled with three other companies, including aerospace supplier Hexcel Corp., for a total of $16 million.

“The Justice Department will not tolerate its first responders wearing defective bulletproof vests,” said Gregory Katsas, the assistant attorney general for the civil division. “This settlement will help ensure that first responders receive the highest quality ballistic protection.”

In June, the government sued diversified manufacturer Honeywell International Inc. for selling defective material used in the bulletproof vests and for failing to notify the government or Armor Holdings of the defect.

The fabric used in Honeywell’s Zylon Shield was supplied by Japan’s Toyobo Co. Ltd. and its U.S. subsidiary Toyobo America Inc. Honeywell patented its Zylon Shield and later sold it to Armor Holdings and its subsidiaries.

Between 2000 and 2005, the U.S. paid $1.3 million for more than 1,700 vests sold by Armor Holdings that contained Honeywell’s Zylon Shield. The government has paid roughly another $20 million for more than 11,000 bulletproof vests made with the Zylon Shield.

Copyright 2008 The Associated Press.