{"id":21831,"date":"2016-03-28T11:35:20","date_gmt":"2016-03-28T18:35:20","guid":{"rendered":"https:\/\/cjnotebook.com\/?p=21831"},"modified":"2016-03-28T11:35:20","modified_gmt":"2016-03-28T18:35:20","slug":"contractors-agree-to-pay-8-million-for-selling-u-s-army-defective-flares-used-to-divert-enemy-heat-seeking-missiles","status":"publish","type":"post","link":"https:\/\/cjnotebook.com\/?p=21831","title":{"rendered":"Contractors Agree to Pay $8 Million for Selling U.S. Army Defective Flares Used to Divert Enemy Heat-Seeking Missiles"},"content":{"rendered":"<p><span style=\"font-size: 18pt;\"><strong>NEW YORK<\/strong><\/span><\/p>\n<hr \/>\n<p>&nbsp;<\/p>\n<p><span style=\"font-size: 14pt;\"><img loading=\"lazy\" decoding=\"async\" class=\"size-medium wp-image-14523 alignleft\" src=\"https:\/\/cjnotebook.com\/wp-content\/uploads\/2015\/08\/Courtroom-300x160.jpg\" alt=\"Courtroom\" width=\"300\" height=\"160\" \/>Tennessee and New York-based contractors will pay $8 million to settle a lawsuit alleging that they sold defective countermeasure flares to the U.S. Army, officials announced today.<\/span><\/p>\n<p><span style=\"font-size: 14pt;\">The military uses infrared countermeasure flares used to divert enemy heat-seeking missiles away from aircraft, according to officials.<\/span><\/p>\n<p><span style=\"font-size: 14pt;\">\u201cOur warfighters\u2013 along with everyone who relies upon them, including their families \u2013 need to know that the equipment they use is of the highest quality and dependability,\u201d said <strong>U.S. Attorney William J. Hochul Jr. of New York<\/strong>. \u201cIn this case, the magnesium flares made by Kilgore were literally the last line of defense for our brave aviators.\u00a0Because of today\u2019s resolution, Kilgore will now ensure that similar incidents do not happen in the future.\u201d<\/span><\/p>\n<p><span style=\"font-size: 14pt;\">Kilgore Flares Company and one of its subcontractors, ESM Group Inc., admitted to selling the flares, in the case of ESM, knowingly evading customs duties owed to the \u00a0federal government, officials said.<\/span><\/p>\n<p><span style=\"font-size: 14pt;\">ESM Group, located in New York, manufactures magnesium powder supplied to the chemical, welding and pyrotechnics industries. \u00a0ESM imported magnesium powder used in the flares from China, which it sold to Kilgore Flares, officials said.<\/span><\/p>\n<p><span style=\"font-size: 14pt;\">\u201cThe Department of Justice is committed to ensuring that contractors do not cut corners in manufacturing critical items sold to the U.S. military,\u201d said <strong>Principal Deputy Assistant Attorney General Benjamin C. Mizer, head of the Justice Department\u2019s Civil Division.\u00a0<\/strong><\/span><\/p>\n<p><span style=\"font-size: 14pt;\">The sale of these flares was brought to light as a result of a whistleblower. This triggered a lawsuit filed by the whistleblower, Reade Manufacturing Co., a domestic manufacturer of magnesium powder, officials said.<\/span><\/p>\n<p><span style=\"font-size: 14pt;\">The act also allows the whistleblower to receive a share of any funds recovered through the lawsuit.\u00a0 Reade Manufacturing received $400,000 as part of the settlement with ESM, according to officials.<\/span><\/p>\n<p><span style=\"font-size: 14pt;\">A primary component of these flares is ultra-fine magnesium powder, which combined with other materials, provides ignition and enables the flares to burn at high temperatures and at rates that mimic an aircraft\u2019s engine.\u00a0 <\/span><\/p>\n<p><span style=\"font-size: 14pt;\">Kilgore\u2019s contracts with the army prohibited the use of magnesium powder from foreign countries, except Canada, in order to maintain domestic manufacturing capability in the interest of national defense, according to authorities.<\/span><\/p>\n<p><span style=\"font-size: 14pt;\"><strong>These are the allegations against Kilgore and ESM:<\/strong><\/span><\/p>\n<ul>\n<li><span style=\"font-size: 14pt;\">From July 2003 through May 2005, ESM knowingly misrepresented the content of ultrafine magnesium powder imported from the PRC in order to avoid paying antidumping duties owed to the United States.\u00a0 <\/span><\/li>\n<li><span style=\"font-size: 14pt;\">Antidumping duties protect against foreign companies \u201cdumping\u201d products on the U.S. market at prices below cost.\u00a0 <\/span><\/li>\n<li><span style=\"font-size: 14pt;\">The U.S. Department of Commerce assesses and U.S. Customs and Border Protection collects these duties to protect U.S. businesses and level the playing field for domestic products.\u00a0 <\/span><\/li>\n<li><span style=\"font-size: 14pt;\">At the time of the imports alleged in this case, ultra-fine magnesium powder from the PRC was subject to a 305\u00a0percent antidumping duty.<\/span><\/li>\n<li><span style=\"font-size: 14pt;\">The government further alleged that from March 2005 through August 2006, Kilgore used the illegally imported Chinese magnesium powder purchased from ESM in the countermeasure flares it sold to the U.S. Army.\u00a0 <\/span><\/li>\n<li><span style=\"font-size: 14pt;\">The Chinese magnesium powder allegedly violated both the requirement for domestically produced powder and engineering specifications required by the contracts.<\/span><\/li>\n<\/ul>\n<p><span style=\"font-size: 14pt;\">Kilgore and ESM agreed to pay $6 million and $2\u00a0million, respectively, to resolve the government\u2019s allegations.<\/span><\/p>\n<p><span style=\"font-size: 14pt;\">Prior to the civil settlements with Kilgore and ESM, five former employees and agents of ESM pleaded guilty to criminal offenses related to the magnesium importation scheme, including ESM\u2019s former president, Charles Wright.\u00a0<\/span><\/p>\n<p><span style=\"font-size: 14pt;\">The criminal defendants were ordered to pay more than $14 million in restitution, officials said.<\/span><\/p>\n","protected":false},"excerpt":{"rendered":"<p>NEW YORK &nbsp; Tennessee and New York-based contractors will pay $8 million to settle a lawsuit alleging that they sold defective countermeasure flares to the U.S. Army, officials announced today. The military&#8230;<\/p>\n","protected":false},"author":1,"featured_media":21836,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[16,3],"tags":[2421,1459],"class_list":["post-21831","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-home-main-slider","category-u-s-department-of-justice","tag-defective-countermeasure-flares","tag-u-s-army"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v28.6 - https:\/\/yoast.com\/product\/yoast-seo-wordpress\/ -->\n<title>Contractors Agree to Pay $8 Million for Selling U.S. Army Defective Flares Used to Divert Enemy Heat-Seeking Missiles<\/title>\n<meta name=\"description\" content=\"NEW YORK &nbsp; Tennessee and New York-based contractors will pay $8 million to settle a lawsuit alleging that they sold defective countermeasure flares\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/cjnotebook.com\/?p=21831\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Contractors Agree to Pay $8 Million for Selling U.S. Army Defective Flares Used to Divert Enemy Heat-Seeking Missiles\" \/>\n<meta property=\"og:description\" content=\"NEW YORK &nbsp; 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