Crane Co. agreed to a $7.5 million fine to resolve a whistleblower suit that it did not submit to a government inspection before bidding on Pentagon contracts, and that it improperly sold foreign-made parts for use on government vessels.
The U.S. Department of Justice had accused the Stamford-based company of violating the False Claims Act, the Berry Amendment and the Buy America Act. The lawsuit was initiated by former Crane employee Walter Klepacz, who will receive a portion of the settlement, as well as $122,000 to cover his legal fees.
The case involved valves Crane sold for use on U.S. Navy ships and U.S. Coast Guard cutters. Crane indicated it fell out of compliance in 2003 after not informing the military that it had moved a valve manufacturing operation from California to Texas, but said the action was unintentional and that is settled the suit to avoid a costly legal battle.
The Navy had warned Crane that the allegations could result in a suspension or ban from doing business with the federal government.
Crane also disclosed that it may have a $25 million insurance gap in a $50 million lawsuit claiming the company”™s fiberglass-reinforced panels accelerated a 2003 fire that gutted a Georgia chicken processing plant.
In separate news, Crane has acquired a Kontron AG unit that produces “rugged” computers, electronics and displays for use in harsh environments. Crane spent $27 million for the unit (previously known as Dolch Computer Systems), which has 35 employees in California and which produced $25 million in revenue last year.
Crane is adding the business to its Azonix rugged computer business, which is located in Billerica, Mass.
In the second quarter, Crane had a $46 million profit on $660 million in revenue, with sales up 18 percent from the same period in 2006.
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