Justice Department Files False Claims Act Complaint Against Insect Shield LLC and Its Founder

The Justice Department has filed a complaint under the False Claims Act against Insect Shield LLC for allegedly causing the submission of false claims to the Department of Defense (DoD) under contracts to provide Army Combat Uniforms. The government has also brought claims against the Estate of Richard Lane, who was the founder, majority owner and chief operating officer of Insect Shield until his death in December 2022.

According to the United States’ complaint, several manufacturers of Army Combat Uniforms subcontracted with Insect Shield to apply permethrin, an insect-repellant, to Army uniforms and to conduct contractually-required testing to ensure that the level of permethrin it applied to the uniforms fell within the limits specified in the contracts. The complaint alleges that Insect Shield and Lane falsified the results of its permethrin testing to conceal failing test results, including by inappropriately combining results from different rounds of testing, re-labeling test samples to hide the true origin of the samples and performing re-tests of uniforms in excess of what the contract permitted.

“Government contractors and subcontractors must provide the services for which they were paid, including by performing required testing activities,” said Principal Deputy Assistant Attorney General Brian M. Boynton, head of the Justice Department’s Civil Division. “The Justice Department will pursue those who seek to defraud the American taxpayers by misrepresenting their compliance with contractual commitments.”

“I am thankful that we are able to hold accountable those who would defraud the government,” said U.S. Attorney Sandra Hairston for the Middle District of North Carolina. “This case demonstrates that we will continue to protect the use of taxpayer dollars and ensure that companies who provide services to the military don’t cut corners.”

“Businesses that have been contracted by the U.S. Army must comply with all their obligations and testing procedures to meet the high standards we demand,” said Special Agent in Charge Andrew Johnson of the Department of the Army Criminal Investigation Division’s (Army CID), Fraud Field Office. “Army CID is thankful for the collaborative efforts from all the agencies involved. This is a testament to our commitment of working together and holding those accountable who fail to properly test items that our men and women in uniform depend upon to keep them safe while serving their country.”

“Contractors must fulfill their obligations in an open and fair manner,” said Director Terri Dilly of the Defense Contract Audit Agency (DCAA). “We are proud to have partnered with the investigative team in providing audit expertise to this case.”

“The Defense Criminal Investigative Service (DCIS) is fully committed to protecting the DoD procurement process to ensure military readiness,” said Special Agent in Charge Christopher Dillard for DCIS Mid-Atlantic Field Office. “DCIS will continue to work with our law enforcement partners and the Justice Department to investigate DoD contractors that fail to perform required testing and accurately report results.”

This lawsuit was originally brought by Emelia Downs, a former employee of Insect Shield, under the qui tam or whistleblower provisions of the False Claims Act. Those provisions permit private parties to sue for false claims against the United States and to receive a share of any recovery. The Act permits the United States to intervene in such lawsuits, as the United States has done in this case. The lawsuit was filed in the U.S. District Court for the Middle District of North Carolina and is captioned United States ex rel. Downs v. Insect Shield, LLC et al., No. 1:19-CV-1026.

This matter is being handled by the Civil Division’s Commercial Litigation Branch, Fraud Section, and the U.S. Attorney’s Office for the Middle District of North Carolina. Investigative support is being provided by the DoD Office of Inspector General, Army CID and the DCAA.

Fraud Section Trial Attorney Jonathan Hoerner and Assistant U.S. Attorney Cassie Crawford for the Middle District of North Carolina handled this case.

The claims in the complaint are allegations only, and there has been no determination of liability.

Official news published at https://www.justice.gov/opa/pr/justice-department-files-false-claims-act-complaint-against-insect-shield-llc-and-its

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