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Optics Maker Sued Over Defective Parts

Photonics Spectra
Nov 1999
Gaynell Terrell

PHILADELPHIA -- The US government has sued Plummer Precision Optics Co. and several top managers for knowingly manufacturing and shipping millions of dollars of defective optical lenses and components to the military.

The government alleges that the Pennsburg, Pa.-based optics maker also falsified quality inspection reports and reshipped rejected parts in batches with other components over a 10-year period ending in 1997.

The charges have not disrupted manufacturing, according to Jack Hornberger, president and chief executive officer. This includes orders from defense contractors General Dynamics of Falls Church, Va., and Hughes Aircraft of Arlington, Va., which were cited in the civil complaint as having received defective parts.

Company founder John L. Plummer said in a prepared statement that the company has no knowledge of unresolved customer product defects or warranty claims on the optics cited under the civil complaint.

Pending an extension, the company has until Dec. 1 to file a legal answer to the charges.

The civil complaint was unsealed Sept. 30 in US District Court for the Eastern District of Pennsylvania under the federal False Claims Act. Charged with various counts of fraud and conspiracy are John Plummer; his wife, Jutta B. Plummer, a member of the board of directors; Walter Lagger, executive vice president for operations and manufacturing; Max Haskins, vice president for manufacturing; the Tomilda Trust, located in Liechtenstein and controlled by John Plummer; Plummer Precision Optics, founded in 1944, and its Singapore subsidiary, Plummer Optics Ltd., founded in 1981.

The allegations were originally filed in March 1997 by former marketing director Robert Basore under the False Claims Act. The so-called whistle-blower law allows individuals to sue on behalf of the government, which investigated and joined the case.

Under the False Claims Act, the government would be entitled to recover treble damages, plus up to $10,000 in civil penalties for each false reimbursement claim submitted by the company in compensation for the alleged defective optics components.

Assistant US Attorney Seth Weber said each false invoice constitutes a claim, and hundreds are involved. Government contracts account for about 20 percent of Plummer's $7 million in annual sales, the company said.

Basore, who is employed by Coherent Auburn Group of Auburn, Calif., cooperated with the government investigation of Plummer. He said he was first alerted to quality problems after receiving numerous complaints from customers.

"I learned [that the alleged violations] were being approved by senior management. I was told to mind my own business,'' he said.

Hornberger, former vice president of marketing and sales for Rollins Environmental Services of Wilmington, Del., joined Plummer Precision Optics in 1997, about nine months after the government investigation had begun. He said he found no gross neglect in company operations.

Since taking charge, however, he said he has instituted new work standards, tightened quality control and even added a whistle-blower procedure to the company's operations policy.


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