FOR IMMEDIATE RELEASE

CIV

TUESDAY, MARCH 7, 2000

(202)514-2007

WWW.USDOJ.GOV

TDD (202) 514-1888


NEVADA DEFENSE CONTRACTOR WILL PAY $320,000

FOR SELLING UNTESTED ELECTRONIC PARTS TO MILITARY


WASHINGTON, D.C. -- The Justice Department announced today that a Nevada defense contractor will pay the United States $320,000 to settle allegations that the company sold improperly tested electronic parts to the U.S. Department of Defense and the National Aeronautics and Space Administration for a number of military and aerospace programs.

Acting Assistant Attorney General David W. Ogden of the Civil Division said that the settlement resolves charges brought against Carson City, Nevada-based Maxwell-Sierra, a division of Maxwell Technologies, and five of its present and former employees. The complaint was filed by Scott Peterson, who was a technician support, quality assurance employee for Maxwell-Sierra.

"Today's settlement is an example of the Justice Department's determination to insure that the government is compensated for overcharging on government contracts," said Ogden. The settlement was filed in United States District Court in Reno, Nevada.

Peterson alleged that the defense contractor and five of its employees failed to test or improperly tested capacitors and filters -- key electronic components in a number of military and aerospace systems. Many of these components were required to be manufactured and tested in accordance with detailed military specifications.

The case was brought under the qui tam provisions of the False Claims Act in the U.S. District Court in Reno in 1994. Under the settlement, Peterson will receive $48,000 for bringing the matter to the attention of the government. Under the qui tam provisions of the False Claims Act, the whistleblower can file an action on behalf of the United States and receive a portion of any recovery if the party satisfies certain requirements.

The case was investigated by the Sacramento, California Office of the Department of Defense's Criminal Investigative Service, the Sacramento, California Office of the Air Force's Office of Special Investigations, the Sacramento, California Office of NASA's Office of Inspector General, and the Army's Civil Investigation Command, with assistance from the Sacramento, California office of the Defense Contracting Audit Agency. The Civil Division negotiated the settlement.

The lawsuit is filed as U.S. ex rel Peterson v. Maxwell-Sierra,

No. CV-N-94-00704-ECR.

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