Streamlight

The Details – UNITED STATES OF AMERICA v. L-3 COMMUNICATIONS EOTECH, INC., L-3 COMMUNICATIONS CORPORATION, and PAUL MANGANO

As most of you know by now, the US Government sued L-3 Communications and its subsidiary EOTech as well as EOTech’s CEO, Paul Mangano for fraud regarding issues with their Holographic Weapon Sights which have been purchased by the Departments of Defense, Homeland Security, and Justice. While we have provided a copy of the case, many won’t take the time to actually read it so we’ve extracted some of the pertinent information for you. What the Government’s attorneys have done is demonstrated a pattern of fraudulent behavior on the part of L-3 on how the sights work in various environments. In particular, they’ve named EOTech CEO Paul Mangano due to his part in the scheme.

This is a civil fraud action by the United States of America (the “United States” or the “Government”) against Defendants L-3 Communications EOTech, Inc. (“EOTech”), L-3 Communications Corporation (“L-3”), and EOTech’s President, Paul Mangano (“Mangano,” and collectively with L-3 and EOTech, “Defendants”), to recover treble damages and civil penalties under the False Claims Act, 31 U.S.C. § 3729 et seq., and damages under the common law theories of mistake of fact and unjust enrichment, arising from a scheme to defraud the United States Department of Defense (“DoD”), the Department of Homeland Security (“DHS”) and the Federal Bureau of Investigation (“FBI”) in connection with EOTech’s knowing sale of defective holographic weapon sights (also referred to herein as “combat optical sights” or “sights” and sometimes abbreviated “HWS”).

The suit shows that EOTech knew about issues as far back as 2006 and failed to alert the Government. Rather, the Government had to discover the issues on their own.

Since at least 2006, Defendants knew about defects in their weapons sights that caused product failures, particularly in the extreme environmental conditions in which Special Forces operate. Instead of making a prompt disclosure of the defects, Defendants delayed disclosure for years, until they believed they had a fix or were compelled to make a disclosure because of employee or other complaints.

By 2006, Defendants knew that the sights failed to perform as represented in temperature extremes. Specifically, they learned that the sights experienced a condition referred to as “thermal drift,” meaning that the sight’s point of aim differed from its point of impact (or “failed to hold zero”) when subjected to hot or cold temperature. Although EOTech was contractually required to disclose any information concerning the reliability of the sights, EOTech waited nearly a decade to disclose the defect. In more recent years, as EOTech subjected new models of the sights to qualification testing, the test engineer documented thermal drift in every sight tested in report after report. Finally, in March of 2015, the FBI independently discovered the thermal drift defect and presented EOTech with the very same findings that the company had documented internally for years. Shortly thereafter, EOTech finally disclosed the thermal drift defect to DoD.

By early 2007, Defendants knew of a separate performance failure in cold temperature. Beginning around 32 degrees Fahrenheit, the sights’ aiming dot became significantly distorted, affecting the accuracy of the sight and worsening as the temperature approached -40 degrees. At sub-zero temperatures, the distortion of the aiming dot affected the accuracy of the sights by more than 20 inches for every 100 yards. EOTech delayed disclosing the defect for more than a year, and until it had a fix in place. Even then, EOTech presented its fix to DoD as an upgrade to a quality product that already conformed to specifications.

By 2008, Defendants also knew that their sights failed to perform as represented in humid environments. Defendants knew that the sights leaked, allowing moisture to enter and causing a degradation of the reticle (i.e., the circle and aiming dot in the sight necessary for acquiring a target). Although the sights were always sensitive to humidity, in 2008 EOTech inspected a large shipment of returns from DoD and noticed damage caused by moisture in nearly every sight. In the years that followed, moisture-related complaints (typically dimming or disappearing reticles) became the number one reason for EOTech’s customer returns, and EOTech’s own testing repeatedly confirmed that the sights were not properly sealed and quickly degraded when exposed to moisture.

Defendants, however, waited to disclose the problem until 2013, when, once again, they believed they had arrived at a solution. And again, EOTech pitched its fix as an upgrade to a
quality product that conformed to specifications.

Once again, EOTech never disclosed these issues to the Government. Instead, internal testing at the FBI brought them to light.

Finally, in March 2015, the FBI discovered what EOTech had known for years. In conducting its own testing of the sights for zero stability, the FBI exposed the sights to normal temperature variations for the state of Virginia, a temperature range much narrower than -40 to 140 degrees Fahrenheit. A ballistics team then tested the sights for point of aim/point of impact accuracy, or zero stability, and similarly found significant drift at both higher and lower temperatures.

After discovering the problem in March 2015, the FBI immediately presented its findings to EOTech. Shortly thereafter, EOTech disclosed the issue to Crane, but stated that the problem was only recently discovered and that it was devoting substantial efforts toward finding a solution.

When asked about the company’s previous efforts at finding a solution for thermal drift, a former EOTech optics engineer explained that the company knew for years that thermal drift was an inherent design flaw with the “Generation II” model of the product that was specially designed for military use, and that no fix existed without substantial modification of the product.

Many have wondered why CEO Paul Mangano was specifically named. The key is in this passage from the suit:

Both Mangano and EOTech’s contracting officer acknowledged that EOTech was contractually obligated to notify Crane if the sights deviated from the contractual specifications. Mangano also testified that L-3’s ethics policy requires disclosure of quality issues to the Government.

And this:

The decision maker on disclosure of quality-related defects was Mangano. As the Co-founder testified, until a solution was in place, Mangano “did not want this [defect] disclosed to the marketplace at all and he specifically communicated that.” According to two EOTech employees, the Co-founder fought repeatedly with Mangano over whether to disclose the distortion defect, with the Co-founder supporting immediate disclosure and Mangano opposing it. Moreover, Mangano admitted at a deposition that the decision to disclose a quality issue to a customer ultimately was his.

Mangano’s decision to hide defects goes back to at least 2007.

By email dated September 16, 2007, Mangano reported to other senior managers that “[t]he take-away from this past Friday’s Red Review is that we will not be in a position to fully disclose to Crane and Colt/Canada [a Canadian EOTech customer] until November at the earliest.” Mangano added that “[w]e will only disclose to Crane and Colt/Canada. Given that we have no product returns over the years from other military customers reporting the issue, we see no need to communicate the patent defect.”

Internally at EOTech, employees knew this course of action was wrong. This statement may be the most damning of all.

Shortly thereafter, a sales and marketing employee wrote to the Co-founder “in confidence” about Mangano’s email, stating, “I have an issue with this . . . Is it worth risking one person’s life on this? What if there is a guy in the mountains in Afghanistan, and he brings up his sight picture on the enemy who has the drop on him with an AK[?] He takes aim as quickly as possible and puts a shot that misses wide due to the distortion of the reticle. He’s dead a fraction of a second later from a 7.62 mm round. This is a dramatic example, but this is the risk that is posed the longer the end-user is unaware of the risk.”

The sales and marketing employee added that “[w]e have been sitting on this issue for a long time and it makes me very uncomfortable that we have still done nothing about this to protect soldiers and LEOs [law enforcement officers] of both this country and those across the globe from getting killed. What if it has happened already?

Another issue that comes up in the suit is that Naval Surface Warfare Center Crane, which acts as Program Manager for Special Operations Forces Weapons on behalf of USSOCOM needs to institute a more robust testing and quality control regimen. I believe that they relied too heavily on the vendor (L-3 Communications) to self monitor for adhering to specifications. While this may have made sense early in the war, in order to quickly field equipment to troops in the field, there has been plenty of time to allow acquisition best practices to become the norm. Additionally, if EOTech is an ISO certified company, someone needs to conduct a thorough audit.

While L-3 Communications was quick to settle the suit with a $25.6 Million fine, we wait to see if the Government will recommend debarment for L-3 Communications, just EOTech, or not at all. Additionally, there are several other user groups not represented in this suit, such as State and Local government agencies, domestic consumers and international customers.

We have extracted some of the most significant sections of the suit, but we still encourage you to read the entire filing which is available here.

Tags: ,

49 Responses to “The Details – UNITED STATES OF AMERICA v. L-3 COMMUNICATIONS EOTECH, INC., L-3 COMMUNICATIONS CORPORATION, and PAUL MANGANO”

  1. Anthony says:

    Will SSD be releasing any statements by L3 or EOTech? I am curious to see what their retort might be. It seems like they would almost have to do something for folks given the depth of the secrecy. I could be wrong. I was wrong enough to rely on the sight even though I have not experienced any of those issues. Yet.

  2. Looks like some legal teams are going to be making a packet out of this one. Litigation is never great and is not only costly financially but is often the end of many companies reputations.

  3. Cropduster says:

    How many of our warriors died because their shots missed due to their POA being off? People should go to prison over this! This should be national news everywhere and we should be deafened by public outcry.

  4. Johnny says:

    Next year when we’re all watching American Sniper on some network television channel, some scummy lawyer will come on the commercial asking all EoTech customers to call a 1-800 number to join in a class action lawsuit where everyone who ever bought an L3 sight will be awarded $3.38.

  5. Jack says:

    It’s sad to see that so many cracks in the system let the sewage pour all over our brothers in arms.

    • Mick says:

      I didn’t see this as a crack in the system… this is out and out corporate greed and fraud. The system has rules in place to require reporting… but when companies do their best to run around the rules, things like this happen.

      • HSR47 says:

        Frankly, while its easy to paint this as nothing more than a case of corporate malfeasance, that’s an overly simplistic view.

        Note that the issues came to light as the FBI conducted internal testing on the optics; the fact that the issues did not come to light sooner therefore indicates that the military used a commercial product for a decade without conducting any substantive internal testing.

        This is not the first time that a company has delivered products that don’t live up to the quoted specs, nor will it be the last. As such, while it is right to flog L3/Eotech, the real focus should be on improving oversight and internal testing practices so that issues like this aren’t allowed to fester for decades.

  6. jm says:

    Watch for a class action from the consumers as well. Gross misrepresentation, false advertising, fraud, and a ton of units in peoples hands who depend on these products. Its not for NERF, this is shit people rely on to stay alive. Bad juju Mr. Paul Mangano. Hopefully a set of bars are in your future.

  7. Matt says:

    Facts and compelling arguments will never sway the “sample of one” users, nor move fan boys to solid ground. Worse are the BTDT guys who also swear by junk just because they never had problems.

    Very damning documents, but again, good luck convincing anyone who already hadn’t figured out that EOTech was a junk product.

  8. Bill says:

    I may be wrong, but I believe that the Chinese government executed a corporate executive who concealed that a product had lead or some other toxic substance in it that rendered it dangerous to use as per normal.

    The guys and girls who are really going to get boned are the individuals, particularly in LE, who went out of pocket on a relatively expensive product for duty use who tonight will be out on a hot car stop not know ing when or if their unit will fail. It’s back to squirreling away $20.00 a pay period until enough gets saved up for a new unit from a different company. This coming from a guy whose first car was a Corvair.

    • Anthony says:

      You hit the nail on the head my friend. I like my EoTech and took a chance on one. I have never had an issue with the XPS series but now I no longer have confidence in them after seeing the depth of the corruption.

      It’s not that I am stupid, it’s that I got lied to.

      • Matt says:

        Yep, and with these issues being so public now, it puts anyone using an EOTech product for LE duty on notice that the sight may not hold zero. No admin or user should be using these with such notice. It would be considered lack of due consideration or even reckless disregard.

        • joe_momma says:

          Except when you work for an agency that has no real gun people in charge of gun shit and make decisions on sales people and with a business mindset. Some snake oil salesperson sold my agency on gg&g short rails and vfgs about a month ago. So now we all are required to have these add on rails and vfgs installed (by a certified armor ) even if you don’t want one or shoot that style. And we all have eotechs which we’ve already spent the money on so they are definitely not going anywhere. Oh you want to use your own aimpoint? Nope, cause then you won’t match. Oh you want a light on your rifle too? Nah, you have an issues handheld and can use one of those support rifle with forearm while using hand for light techniques….

    • BAP45 says:

      Ditto, no issues with the one I’ve had but confidence is definitely shaken. Bummed because I really did like the reticule and objective size.

  9. Darkhorse says:

    A few things to consider when placing blame for any piece of equipment fielded by DOD-

    If EOTech met or exceeded all of the performance parameters initially, then SOF was getting a decent product at some point. Did the PM conduct any LAT? If YES, did it identify any issues and if so, when and what corrective action took place? If NO, why wasn’t LAT conducted? It’s the PM’s responsibility to make sure his customers are getting the item performing as advertised.

    If EOTech didn’t meet or exceed the performance parameters, then the PM fielded an inferior product to his customers. Again, that’s a PM failure.

    It’s the governments responsibility to make sure the item it is taking delivery of performs in accordance with the performance parameters established by the customer. That’s the job of the PM.

    The government (specifically on the combat development front) is taught to NEVER trust industry and that’s a GOOD practice. It keeps vendors honest and should establish a thorough test plan that the PM rigorously executes and keeps his customers informed, especially when a problem arises.

    I’m not defending EOTech’s sketchy practices. It’s disgusting and I’m glad to see that someone (with some integrity) on the inside spoke up in an attempt to right a serious wrong.

    This has nothing to do with fanboys or EOTech being junk or not junk. It has EVERYTHING to do with the PM failing to ensure it’s customers got the item as advertised. Epic failure.

    • ScottyC says:

      Totally agree. It has long been known that Crane is the Fanboy Depot for all things SEAL, for at least the weapons program. That’s why we (Army SF) get junk a lot of the time, all because some SEAL liked a product that looked cool. We have gotten better over the years of our R&D an acquirement of POM’s but Crane still wields a mighty power with Industry that often overpowers the users wants and needs.

      • Darkhorse says:

        Interesting to me that the govt will litigate against a commercial entity all the while, exactly how many people at Crane got fired over this?

        • SSD says:

          Crane didn’t drive the train on this, it was DoJ after FBI got the first lieutenant salute from EOTech when they raised these issues.

      • majrod says:

        Interesting thoughts on the subjects.

  10. Dellis says:

    I’d like to be a fly on the wall around the dinner tables of the L3 exec’s tomorrow as family members go round and give thanks.

    What will they say I wonder

    • straps says:

      It remains to be seen what level of official culpability L3 will bear. It’s a huuge company and everyone in the Defense sector is trying to figure out how to keep the lights on.

      Government procurement being what it is, end users with a preference–and a grudge–always seem to be seven degrees separated from procurement people playing numbers games. It’s how EOTech product continued to be procured after its shortcomings (reliability, battery life, battery circuit integrity) were pretty much taken as settled fact, it’s how SERPA became the SOCOM holster even as those on tip of the spear expressed concerns about that platform’s finger position AND tendency to de-laminate AND trap the gun when fouled.

      No doubt there are a few current/former EOTech subsidiary folks (a) checking their archived e-mails or (b) evaluating the severity of their exposure. The prospect of lawyering up really does impact holiday plans…

  11. BigD says:

    A quick search reveals that L3 bought EOTech in November of 2005. I wonder if the original owners had an inkling of the problem then….Its no excuse for L3, but in retrospect they were taken as badly as the gvmnt.

  12. TM says:

    I’m a little confused. Don’t all red dot optics shift POA/POI with dramatic temperature change? I’m at Ft. Wainwright, Alaska where we can go from -40 in the winter to +90 in the summer, and we constantly adjusts zero regardless of what optic we’re using. Even Aimpoints shift about 1MOA for every 10 degree temp change.

    • In my experience – which on this topic is considerable – the ammunition plays a significant factor in this. Making a blank statement about an optic shifting zero in cold temps and not factoring in the Ammo at all is not seeing the whole picture. Guns and ammo do strange things at the temperature extremes – just like people.

      • Erock says:

        Nail on the head, LAV.

      • rowan11b says:

        Yep, rule of thumb is was taught was 1 minute for every 20 degree temperature shift from zero temp and 1 minute for every 20% degree changed in humidity from when you zeroed. That’s knowledge from some old school B4 qualified guys though, but I was wondering the same thing about how much the temp affected the POI of the bullet and not just the optics zero shift.

        • RonboF117 says:

          If you look at terminal ballistics, going from 0-100% humidity changes the data about 1.5%. That is why humidity is generally disregarded or set at 50% when running ballistic software.

      • dfam says:

        LAV – does Aimpoint have any similar ‘thermal drift’ or parralax issues like are described with the Eotech? What kind of testing has been done to show AP is immune to those temp effects?

  13. rowan11b says:

    Great! Now who wants to buy my 557/su-231???

    Can we do something to fix the fucking peq-15 now? Its another seriously faulty L3 product. I’ve probably broken 3 in my short time in, the mount is terrible, the body cracks, the battery cap lets moisture in, and the lasers don’t hold zero. Whos palms were greased in to buying that one?

    • darrel says:

      Never heard anything about this. What the heck are you doing with it? Even banging it around inside LAVs and trucks, I have never managed to come even close to getting my zero thrown off, let alone breaking the housing. It’s made out of fiberglass impregnated polymer IIRC. That’s as good as it gets.

      You’re barking up the wrong tree. The PEQ-15 and by association the LA-5 are great, reliable devices.

      • rowan11b says:

        Short answer, yes that’s exactly what I’m doing with them. Also on doorways, windows, walls, etc. Admittedly the two who’s housing I cracked were both on a saw and mounted on the side of its rail, they both cracked in the same spot. I had one have the screw that tightens the mount straight up just mysteriously snap off and was left with a peq wiggling under a tie down. Doesn’t include the number of peq I’ve seen that either just fail to turn on or have turrets that don’t track at all, and I’m constantly seeing dudes fall off their rifles because of the screw mount but the same can be said of the acogs thumbscrew mount. We just need a better mousetrap, but shit we need new rifles, optics, and nods too.

        • Nate says:

          Dude, you need to use a thread locker any time you install something that screws onto rails; blue loctite is cheap. In a pinch use some the girlfriend/spouse’s nail polish, but use something. Also, paint witness marks when appropriate to give you early warning that an optic is unscrewing, stop over torquing the PEQ-15 screws AND finally stop mounting and unmounting optics.

          The big issue with the PEQ-15 is that someone convinced the DLA Program Manager for them (and other aiming devices) that all PEQs and other IR aiming aids SHALL be demilled at turn-in to DLA. So if your BN bought or was issued several hundred thousand dollars worth of these for a deployment or something and they aren’t staying on your property books, nobody else will ever use them and the unit replacing you will spend another several hundred thousand dollars buying new ones, unless you keep DLA Disposition Services out of the transaction somehow.

          DLA will NOT accept them back unless you have driven a screwdriver through the lenses. L3 claims ignorance about why this happening, and it isn’t the only item that this is happening with, but it is rather odd.

          • rowan11b says:

            That’s some interesting info about the peq. I can’t imagine the amount of money that has been burned because of that practice. What happens to the demilled peqs? Ours is on our property books and they are old as fuck, which might be where some of the issues come from.

            About the whole mounting optics, thread locker, witness marks thing. Yes, I do all this and more on my personal rifles, thread locker on all screws and paint pen tick marks. I used to do it with work rifles but all our m4’s are in a constant state of broken or higher is trading equipment between companies or somebody decided to fuck with the mal for no reason so it’s kind of a lottery when I go draw a weapon some days. I know that’s totally a unit issue, but I got tired of unfucking rifles so unless it’s a piece I’m deploying with I’m good. Our arms room will no shit cut tie downs and shuffle optics and lasers around on rifles, for example my acog was mounted thumb tight and about 5 slots of 1913 forward from where it was before when I drew it for the school I’m in right now.

  14. Vince says:

    I would imagine that many here on SSD have had the opportunity to either be issued or purchased an Eotech optic and experienced some of the common symptoms mentioned. Wouldn’t this be a great resource for a potential litigation pool? I for one have observed and experienced these issues and would gladly jump in on a class action as would many of you. Show me where to sign so we can get this ball rolling. At least a refund and possibly a price point for potential damages that could have hypothetically arisen from harm caused by relying on use of this optic. This is subjective of course, but how do you put a price on a life? We learn from our mistakes and thankfully had the ability to switch to a more reliable product, read Aimpoint.

    • Ryan says:

      I certainly want my money back.

    • Will V.G. says:

      Exactly. I fell into the trap. I own 4, and have used them as a “reliable” tool over the last 7 or 8 years. I am thankful I discovered an issue with one of them during training and not in a pucker moment. I would like my money back, full retail, plus 7% sales tax. I’ll eat the cost of the batteries, but I would like to kick someone in the nuts for knowingly selling a shit product that lives depend on.

  15. xpoqx says:

    So the goverment will sue L-3 over this but we haven’t sued Boeing and Lockheed-Martin over the F-22 or the F-35?

    Looks me more like L-3 didn’t have the pull or the hush money to keep their defective products in service like some of the other defense contractors. Remember when the F-22 was causing asphyxia among pilots and the Air Force only did something about it after those two pilots went on Dateline or 60 Minutes?

  16. Justin says:

    And this is another reason as to why I am a proud owner of the aimpoint micro T-1 on my LWRC IC rifle. Aimpoint or die

  17. Paul says:

    don’t forget to email this turd and ask for a recall.

    [email protected]

    34-368-2818 (cell)

  18. Jimmy Dugan says:

    I have an Eotech Gen ll that when looked through the dot and circle fade and even disappear at times. Is there an address to return and or replace? I’m not happy about receiving a replacement but at this point but I doubt I’ll get a refund!