Grand Junction Weapons Manufacturer CAPCO To Pay Over $1 Million To Resolve Allegations Of Fraud As

Grand Junction Weapons Manufacturer CAPCO To Pay Over $1 Million To Resolve Allegations Of Fraud As To Grenade Launchers It Supplied To The U.S. Army


DENVER – United States Attorney Jason R. Dunn announced that Capco, LLC (Capco), a manufacturer based in Grand Junction, Colorado, will pay the United States over $1 million to resolve civil allegations that it defrauded the United States Army in connection with contracts to manufacture weapons.

The allegations relate to grenade launchers, known as M320s, that Capco manufactured in Grand Junction and shipped to the Army. The United States conducted a civil investigation, with Capco’s cooperation, into whether Capco supplied the Army with weapons that did not meet contract specifications.

According to the United States, Capco knowingly shipped M320s with barrels that did not meet the contract specifications. Despite this knowledge, Capco certified to the Army that each shipment conformed to contract specifications. Also, as to two shipments, Capco had reason to know that it had used the incorrect steel in manufacturing the firing pins for the M320s. While Capco conducted an internal investigation into the potential use of incorrect steel, this investigation was inadequate and Capco did not disclose this matter to the Army. The United States concluded that this conduct, which involved M320s shipments from July, 2016 through March, 2018, gave rise to civil liability under the False Claims Act.

The United States was alerted to the problems in Capco’s production process by James Cole, who formerly worked as a quality engineer at Capco. Under the False Claims Act, private citizens with knowledge of a fraud against the United States may present those allegations to the government by bringing a lawsuit on behalf of the United States under seal. If the government’s investigation substantiates those allegations and the United States obtains a monetary recovery under the False Claims Act, the private citizen may share in that monetary recovery. Mr. Cole filed such a lawsuit here under the False Claims Act. Of the $1,025,429 settlement amount from Capco, Mr. Cole will recover approximately $235,000.

Read more: https://www.justice.gov/usao-co/pr/grand-junction-weapons-manufacturer-capco-pay-over-1-million-resolve-allegations-fraud