PULASKI COUNTY, Va. (WFXR) — On Wednesday morning, the Department of Justice (DOJ) announced that HEYtex USA in Pulaski has agreed to pay $3 million to resolve allegations that it violated the False Claims Act for nearly six years, as well as enter an agreement with the Defense Logistics Agency (DLA) to ensure the company complies with testing requirements going forward.

The False Claims Act originally ruled that anyone who knowingly submits false claims to the government is liable for double the government’s damages, in addition to a $2,000 penalty for each false claim, according to the DOJ. However, the act has been amended several times and now says that violators are liable for treble damages, plus a penalty linked to inflation.

Officials describe HEYtex USA as a worldwide manufacturer of various technical textiles and materials, but its North American headquarters in southwest Virginia specializes in fabrics and materials produced for the U.S. military.

The DOJ says HEYtex USA is accused of knowingly selling fabrics to the military that failed to meet certain required specifications between Jan. 1, 2013, and Dec. 31, 2018.

In the settlement, the United States says that HEYtex caused false claims to be submitted in connection with fabrics manufactured for military and personal equipment. More specifically, an employee of HEYtex USA, who later came forward as a whistleblower, brought information about falsified test results to the attention of former company management, but the whistleblower was initially ignored. 

According to the DOJ, the employee reported that on more than 100 separate occasions, HEYtex falsely certified that its military-grade fabrics met all requisite performance specifications set by the military even though the fabrics actually failed those tests.

“We applaud the courageous efforts of whistleblowers, who put their livelihood on the line to do what is right. Whistleblowers are essential to combatting fraud against the government and we aggressively investigate all such allegations,” U.S. Attorney Chris Kavanaugh said. “We commend our citizen partners and encourage all who know, or have reason to know, of fraud against the government to come forward and report it.”

The civil settlement includes the resolution of claims brought under the qui tam or whistleblower provisions of the False Claims Act against HEYtex USA. Under the qui tam provisions of the False Claims Act, a private party can file an action on behalf of the United States and receive a portion of the settlement if the government takes over the case and reaches a monetary agreement with the defendant. The qui tam case is captioned U.S. ex rel. Altizer v. Heytex USA, Inc., Civil Action No. 7:20-cv-00170 (W.D.Va.). 

The resolutions obtained in this matter were the result of a coordinated effort among the United States Attorney’s Office for the Western District of Virginia, the Defense Criminal Investigative Service (DCIS), and the United States Army Criminal Investigations Division (Army CID).

Assistant U.S. Attorney Justin Lugar and the Affirmative Civil Enforcement team for the Western District of Virginia investigated the matter in conjunction with Special Agent in Charge, Christopher W. Dillard of the Department of Defense, Office of Inspector General, DCIS, and Army CID Special Agent Joshua T. Kimrey.

The claims resolved by the settlement are allegations only and there has been no determination of liability.

Statement released on May 25, 2022 by the U.S. Attorney’s Office for the Western District of Virginia