Newport-linked defense contractor to pay $2.5M to resolve false claims allegations

NEWPORT — Galvion, Ltd., a defense contractor with a production facility in Newport, has agreed to pay $2,495,000 to resolve allegations that it violated the False Claims Act by knowingly selling non-conforming parts to the U.S. Department of Defense, the Office of the United States Attorney for the District of Vermont announced.

Galvion, headquartered in Montreal, Canada, manufactures protective head systems for use by law enforcement and military personnel, including the U.S. military. The company’s products include the modular suspension system (MSS), a helmet insert.

The government’s investigation revealed that between January 1, 2016, and June 30, 2019, Galvion used non-domestic sources for pads, nets, and harnesses in MSS products sold through the Defense Logistics Agency’s Special Operational Equipment Tailored Logistic Support Program, which requires textiles to be sourced from the United States in accordance with the Berry Amendment.

Galvion has acknowledged that employees with oversight of material sourcing, product operations, and/or product sales during this period were aware of the sourcing requirements but nevertheless used non-compliant components.

United States Attorney Nikolas P. Kerest emphasized the seriousness of fraud by government contractors.

“By selling improperly sourced products to the military, the company placed profits over compliance with clear regulations,” Kerest said. “This settlement demonstrates that the United States Attorney’s Office will continue to root out fraud among companies who do business with the government.”

During the period in question, the MSS was a product of Revision Military Ltd.; in September 2019, Revision’s owner sold the company and certain product lines but retained the protective head system business, which thereafter operated as Galvion.

To resolve the claims against it, Galvion has agreed to pay the United States a total of $2,495,000, reflecting the company’s acceptance of responsibility, cooperation with the government investigation, and compliance measures implemented after 2019.

The settlement agreement was the result of a joint investigation by the United States Department of Defense, Defense Criminal Investigative Service, and Department of the Army Criminal Investigation Division, stemming from a complaint made to the DLA Hotline related to the origin of materials used in the company’s MSS products.