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About POGO's Federal Contractor Misconduct Database (FCMD)
The government awards contracts to companies with histories of misconduct such as contract fraud and environmental, ethics, and labor violations. In the absence of a centralized federal database listing instances of misconduct, the Project On Government Oversight (POGO) is providing such data. We believe that it will lead to improved contracting decisions and public access to information about how the government spends hundreds of billions of taxpayer money each year on goods and services. Report an instance of misconduct »
Ranking: 127
Armor Holdings, Inc.
Armor Holdings manufactures specialized security products and provides training and support services related to these products. Its products include vehicle armor systems, military helicopter seating systems, aircraft and land vehicle safety systems, and protective equipment for military personnel. In May 2007, it was announced that BAE Systems was purchasing Armor Holdings for $4.1 billion.
Federal Contract $: $ 0.0m
Total Number of Instances: 7
Total Misconduct dollar amount: $ 65.4m
Instances of Misconduct
1. U.N. Contracts FCPA Violations (Department of Justice Settlement)
Armor Holdings (now a subsidiary of BAE Systems) paid a $10.3 million penalty to resolve violations of the Foreign Corrupt Practices Act (FCPA). Pursuant to a non-prosecution agreement with the U.S. Department of Justice, Armor Holdings accepted responsibility for its UK subsidiary’s improper payment of more than $200,000 in commissions between 2001 and 2006 to win U.N. body armor supply contracts. Armor Holdings also acknowledged that it falsely recorded the commission payments on its books and records and that it kept off its books and records approximately $4.4 million in additional payments used to obtain other foreign business. Armor Holdings acknowledged that it failed to devise and maintain an appropriate system of internal accounting controls. Armor Holdings also reached a settlement in the same matter with the U.S. Securities and Exchange Commission (SEC) (see Armor Holdings instance, “U.N. Contracts FCPA Violations (SEC Settlement)”). See related Armor Holdings instance, “USA v. Bistrong (FCPA Violation).”... more»
2. U.N. Contracts FCPA Violations (SEC Settlement)
The U.S. Securities and Exchange Commission (SEC) charged Armor Holdings (now a subsidiary of BAE Systems) with violating the Foreign Corrupt Practices Act (FCPA) by participating in a bribery scheme from 2001 through 2006 to obtain contracts to supply United Nations peacekeeping missions with body armor. The SEC alleged that Armor Holdings’ UK subsidiary made at least 92 improper payments totaling approximately $222,750. The SEC also charged Armor Holdings with failing to properly account for more than $4 million in commissions from 2001 through 2007 in violation of the federal securities laws. Armor Holdings agreed to settle the SEC’s charges by paying nearly $5.7 million in disgorgement, prejudgment interest, and penalties. Armor Holdings also reached a settlement in the same matter with the U.S. Department of Justice (see Armor Holdings instance, “U.N. Contracts FCPA Violations (Department of Justice Settlement)”). See related Armor Holdings instance, “USA v. Bistrong (FCPA Violation).”... more»
3. USA v. Bistrong (FCPA Violation)
Richard Bistrong, a former vice president for international sales at Armor Holdings, was charged with paying bribes on various occasions between 2001 and 2006 to win contracts to supply law enforcement equipment to United Nations peacekeeping forces and government agencies in the Netherlands and Nigeria in violation of the Foreign Corrupt Practices Act (FCPA). It is also alleged that Bistrong falsified records in order to conceal or mischaracterize those payments and illegally exported ballistic body armor and helmets to Iraq in March 2004. In September 2010, Bistrong pleaded guilty to conspiracy to pay bribes, illegally exporting certain goods without authorization, and falsifying books and records.... more»
4. Zylon Body Armor Vests (Product Liability)
In April 2004, two class action lawsuits were filed against Armor Holdings in Florida state court by police organizations and individual police officers, alleging that the company's ballistic-resistant soft body armor vests containing Zylon failed to meet safety and performance capability warranties. The plaintiffs alleged that Zylon, the protective fiber used in the vests, deteriorates over time, causing the vests to lose their protective qualities. Both lawsuits settled later that year with an agreement that established a vest exchange/refund program. The company estimated the program would cost approximately $19.4 million.... more»
5. RCRA and Clean Air Act Claims
In October 2002, Armor Holdings was sued in federal court in Wyoming over subsidiary Defense Technology Corporation of America's Casper, Wyoming tear gas plant. The plaintiffs asserted various state law tort claims and federal environmental claims under the Resource Conservation and Recovery Act and the Clean Air Act against the the tear gas plant. In February 2004, the lawsuit was settled for an undisclosed amount of money.... more»
6. Point Blank Body Armor v. BAE Systems (Tortious Interference)
Point Blank Body Armor, Inc. sued BAE Systems Specialty Defense Systems of Pennsylvania, Inc. (formerly a division of Armor Holdings, which was acquired by BAE Systems in 2007), alleging Specialty Defense used confidential information about Point Blank to get an unfair advantage when the two companies competed for a U.S. Army contract to make bullet-resistant tactical vests. Point Blank alleged that retired Col. John D. Norwood, who began working for Armor Holdings in September 2006, had obtained confidential information pertaining to Point Blank’s business operations while he was working in the Army’s Program Manager’s Office. In March 2009, both parties reached a confidential settlement agreement.... more»
7. Defective Zylon Body Armor Vests (False Claims Act)
Armor Holdings Products LLC (now a subsidiary of BAE Systems) will pay the United States $30 million to resolve allegations that it violated the False Claims Act by knowingly making and selling defective bulletproof vests containing a material called Zylon to law enforcement agencies. Armor Holdings allegedly had information showing that Zylon degrades quickly over time and would thus render vests made with the material unfit for use.... more»
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