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JUSTICE DEPARTMENT ANNOUNCES SETTLEMENT AGREEMENT

WASHINGTON, D.C. -An Indiana based nuclear missile transport trailer manufacturer has agreed to pay the United States $1 million dollars to settle allegations that it submitted false claims as a subcontractor on two Defense Department contracts, the Justice Department announced today. The government alleged that Elkhart, Indiana's Dynamics Corporation of America and its unincorporated division, Ellis and Watts built non-conforming nuclear missile transport trailers for the Air Force and Navy and falsely certified their compliance with contractual requirements.

"This settlement demonstrates the Department's ongoing efforts to ensure that the safety of the United States military and the transport of arms is not compromised by faulty and substandard equipment," said David W. Ogden, Assistant Attorney General in charge of the Civil Division.

Ellis and Watts, located in Batavia, Ohio, constructed thirty-three nuclear missile transport trailers for the Air Force in 1992-93. After the trailers were delivered, the Air Force discovered numerous electrical and mechanical workmanship defects in the construction. In 1995, Ellis and Watts built a custom trailer designed to hold sophisticated electronic equipment for the Naval Surface Warfare Center in Dahlgren, Virginia. The company violated a contractual requirement for new material by using an old, damaged trailer shell from its yard in the construction of the Navy trailer.

The United States became aware of this conduct through information provided by a former Ellis and Watts employee. The former employee, who will receive a share of the settlement, filed suit on behalf of the United States in federal district court in Cincinnati, Ohio, under the qui tam, or whistleblower, provisions of the False Claims Act. The United States joined the lawsuit and litigated the case for more than two years.

The settlement concludes an investigation undertaken by the U.S. Department of Defense, Defense Criminal Investigative Service's Dayton Resident Agency Office, the United States Attorney's Office for the Southern District of Ohio, and the United States Department of Justice in Washington, D.C.

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