Insect Shield LLC, a company based in North Carolina, and the estate of its late co-founder Richard Lane have agreed to pay $1.4 million to settle allegations related to false claims submitted under contracts with the Department of Defense (DoD). The settlement addresses accusations that Insect Shield and Lane caused the submission of false claims concerning Army Combat Uniforms.
The U.S. government filed a complaint in December 2023, asserting that Insect Shield, which served as a subcontractor for several defense contractors producing Army uniforms, violated the False Claims Act. According to the complaint, between 2015 and 2021, Insect Shield and Lane did not adhere to required testing protocols for permethrin, an insect repellent applied to uniforms. The allegations include combining results from different test rounds inappropriately, re-labeling samples to obscure their origin, conducting more retests than allowed by contract terms, and hiding failing test outcomes.
Assistant Attorney General Brett A. Shumate of the Justice Department’s Civil Division stated: “Government contractors and subcontractors must comply with contractual commitments and share truthful information with the government. The Justice Department will aggressively pursue those who defraud the American taxpayers by failing to properly perform required testing on goods supplied to our soldiers.”
Special Agent in Charge Christopher Dillard of the Defense Criminal Investigative Service (DCIS) Mid-Atlantic Field Office commented: “The Defense Criminal Investigative Service (DCIS), is fully committed to safeguarding the integrity of the DoD procurement process. Manipulating and failing to perform contractually required testing is not only fraudulent, but compromises military readiness. DCIS will continue to collaborate with our law enforcement partners and the Department of Justice to investigate and hold accountable those who submit false claims.”
Special Agent in Charge Keith Kelly from the Department of the Army Criminal Investigation Division added: “Our Soldiers rely on government contractors to provide equipment that they can depend on while serving their country. The result of this investigation shows that our Army CID and our partner law enforcement agencies are relentless in their pursuit of anyone who may attempt to defraud the U.S. Government by falsely reporting compliance with contractually obligated requirements for equipment used by our Soldiers.”
The civil settlement resolves a lawsuit brought under whistleblower provisions of the False Claims Act. These provisions allow private individuals to sue on behalf of the United States when false claims are made for government funds; whistleblowers may receive part of any recovered funds. In this case, Ms. Downs will receive $315,000 as her share of the settlement.
The case was filed in federal court in North Carolina as U.S. ex rel. Downs v. Insect Shield LLC et al., No. 1:19-cv-1026 (M.D.N.C.). Multiple agencies participated in resolving this matter, including branches within the Justice Department as well as investigative arms from both DoD and Army.
Attorneys Jonathan Hoerner, Jikky Thankachan, Jeffrey McSorley from the Fraud Section handled this matter along with Assistant U.S. Attorneys for North Carolina’s Middle District.
Officials noted that these are allegations only; there has been no determination of liability.
Further details about each agreement can be found at:
and
