BREAKING: U.S. Government Sues L3 Com’s (EOTech) For Fraud

EOTech_Logo

L3 Communications, the holding company that owns EOTech, is being sued by the United States Government for fraud. Their products were the subject of a recent SOCOM warning that the EOTech holographic sights experienced shifting zero across different temperature ranges, which was also a factor in Elite Defense, the international distributor for the sights, cutting ties with L3. SoldierSystems.net has more information on the lawsuit:

The Department of Justice has been investigating EOTech for some time and has finally filed suit (US v. L-3 Communications EOTech Inc., 15-cv-09262) in US District Court, Southern District of New York (Manhattan).

Specifically, the Government’s allegations concentrate on the performance of the Holographic Weapon Sights at temperature extremes as well as in high moisture environments.  The Government also claims that EOTEch failed to disclose testing that demonstrated the inaccuracy issues in those environments.

In addition to naming L-3 and EOTech as defendants in the Government’s suit, they also named EOTech’s president, Paul Mangano which isn’t very common. They are seeking unspecified triple damages plus civil penalties of as much as $11,000 for each fraudulent claim.

L-3 has been aware of the pending action, having mentioned the issue in their July 2015 SEC filing as well as setting aside $26 million.

EOTech sights, though they have a steady fanbase, have had their fair share of issues. The sights have been troubled by much poorer battery life (about an order of magnitude lower) than comparable Aimpoints, due to the laser diode projection system, as opposed to the latter’s LED-based system. In the past, there have also been complaints with L3 Communication’s quality control, and the optics having parts breakages, such as broken battery contacts and detached reflectors. On the other hand, L3 Communications is one of the only manufacturers of laser diode holographic weapon sights on the market, which makes EOTechs one of the only available optics lines with the sharp, clear, customizable reticle afforded by holographic laser projection.

L3 Communications has apparently been under investigation by the Department of Justice for some time, and not just for faulty weapons sights. Earlier this year, they reached a settlement with the Department of Justice on a case regarding the company fraudulently overcharging the DoD for maintenance hours.



Nathaniel F

Nathaniel is a history enthusiast and firearms hobbyist whose primary interest lies in military small arms technological developments beginning with the smokeless powder era. In addition to contributing to The Firearm Blog, he runs 196,800 Revolutions Per Minute, a blog devoted to modern small arms design and theory. He can be reached via email at nathaniel.f@staff.thefirearmblog.com.


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  • flyingburgers

    You can’t consider L-3 Communications to be one company in the traditional sense. L-3 is more of a investment group that acquires, and sometimes sells, small to medium sized defense and aerospace based companies. How one division is run is often very different from another division, and they do have considerable autonomy.
    Other businesses that are very similar are Heico and Teledyne.

  • CommonSense23

    Well great, first we lose our KAC cans, now our Eotechs. Thanks Surefire.

    • Steven Allred

      What’s Surefire got to do with it?

      • CommonSense23

        Just sarcasm. When we switched from the KAC cans to the Surefire ones, we had some teething issues. Mainly how hot they got. So happened we also switched from the Eotechs running the double As to the 123s. Well low and behold we started experiencing some issues with some of the Eotechs losing Zero within the first week. We initially blames the Surefire Cans. I even wrote up a couple equipment failure reports on the Surefire Cans.

        • Steven Allred

          Oh. See, I love hearing these stories from the field. It’s not too often you hear this stuff.

        • KestrelBike

          and then you had to wait an additional six months for the stamps to clear to get new cans… oh wai that’s just us poor peasants lol

          hehe I kid I kid (not about the fed/ATF sucking and NFA being horses__t)

  • Steven Druzynski

    Worked for L-3 when they were known by another name that does military contracts in their optics div here in Phoenix. mfging semiconductor for optics for their sniper scopes….I did QC and couldn’t believe what they let through and when i found so many bad wafers they reprimanded me later letting me go, i was only male QC inspector on my shift…..

    • Gene

      ” i was only male QC inspector on my shift…..”

      Go on….

      • rob in katy

        And one night, Xi (who has really long fingers) reached into my lab coat…

  • Azril @ Alex Vostox

    American version of G36-Gate?….

    • G0rdon_Fr33man

      Well, there never really was a G36-gate 😛

    • Rock or Something

      In this case, at least you can replace your EOtech sights and still use your rifle. Not so much with G36s.

  • Lance

    Said it before buy Trijicon!!!

    • G0rdon_Fr33man

      Or Aimpoint!

      • Sgt. Stedenko

        Or Primary Arms if your poor like me.

        • El Duderino

          Meprolight.

          • Anonymoose

            All great picks! There’s a ton of better options out there than Eotech. Trijicon, Leupold, Zeiss, Elcan, Schmidt and Bender, and Nightforce blow them out of the water if you got the dosh (1 ACOG for 2-3 Eotechs…), Aimpoint has better dot sights and magnifiers at about the same price, plus that cool CEU thingy to shoot around corners. If you’re on a budget, Primary Arms, Leatherwood/Hi-Lux, and Nikon are inexpensive and very dependable. I usually attribute Eotech fanboyism to cowadooty and uber-tacticool airsofter kiddies, so I don’t understand the attraction other than “it looks cool.” And then there’s THIS:

          • Ethan

            You can’t be serious…
            You can not be serious…
            YOU CAN NO… oh, he’s really serious.
            I guess that explains why his BUIS are deployed.
            #Operator

          • Major Tom

            Can I suggest Kobra or its alleged successor the PK-06?

          • Mazryonh

            Is that EOTech sight in your picture mounted backwards?

          • Anonymoose

            Yes.

          • Mazryonh

            So if that was a live-fire situation, was the person responsible for mounting it backwards disciplined?

  • At the prices they charge, I’m not surprised.

    • Sgt. Stedenko

      I see their prices drifting downwards.

  • INFI

    YEP!

    • Sgt. Stedenko

      That’s a feature.
      Six target acquisitions at the same time.

      • Cal S.

        Let’s get a little Red Dead Redemption going here!!

        • Mazryonh

          Or you could put that on a Google Glass and “acquire targets” for Dead Eye that way.

          • Cal S.

            Dead Eye Daiquiri app to go with that?

          • Mazryonh

            Ever play Hitman: Absolution? That game currently takes the cake for the maximum number of targets you can “acquire and automatically shoot.”

            But didn’t Splinter Cell: Conviction start that trend? Where Sam Fisher somehow became much younger, learned Centre Axis Relock, attached a Red Dot Sight to his signature Five-seveN handgun, and gained the ability to drop 4 guards in less than 2 seconds with that gun?

          • Cal S.

            I just recently got into first person shooters, so I’ll take your word for it. I just know a lot of references from play throughs ;). I think game makers started realizing that modern firearms allowed for rapid-fire and attempted to replicate it.

          • Mazryonh

            The funny thing about the “Mark and Execute” mechanic in Splinter Cell: Conviction is that assault rifles actually have less of those shots than handguns do despite often possessing automatic fire modes. But Hitman: Absolution and Red Dead Redemption instead limit the number of “designated targets” only by the amount of ammunition the gun currently being used has.

      • BattleshipGrey

        Man, all these years I held off on buying an EOTech because of the price. No one told me they radar locking and tracking!

      • Giolli Joker

        Yep, shotgun model, buckshot mode activated.

    • Friend of Tibet

      This looks like an airsoft replica red dot sight. I have a 30 dollars cheap red dot eotech copy that does exactly the samething, the so called red dot ghosting.

      In the meanwhile I own 3 eotech actual sights and they never looked like this…….

      • INFI

        U pay YOU PLAY Champ

      • INFI

        Well at work on the Millennium Pigeon we got 90 eorekts that interploded in a warp vectron, doing 50 giggaclicks high on llama dust. And I just keep on tellin myself.

    • Gene

      Kind of makes a legitimate case for BUIS…..

    • natshare

      It’s like driving drunk, where you simply try to follow one of the three lines you see!

      Or, you know, so I’ve heard!

      • uisconfruzed

        Learn to shoo… drive with one eye closed.

        • carlcasino

          Just keep the target between the white lines?

  • whskee

    just breaking from Soldier Systems: Update – By mid-afternoon, L-3 had settled with the government for $25.6 million which clearly indicates L-3 has known since summer how much the US Government would be willing to accept in relief. Their quick action helped turn a drop in stock value of more than 6% at mid-day, yet they still closed the day down from opening prices.

    • Bill

      I haven’t seen all their figures, but I’m guessing $25.6 mil is pocket change to a company like L3, and like in so many cases it’s cheaper to settle and “loose” than to get pushed into some sort of settlement that would require re-engineering and replacing the defective product.

      • whskee

        Very true, but any future product is going to be viewed with extra suspicion and bias. I experienced the battery compartment issue early on, and again even after the supposed fix, so I lost faith back then and stuck to the Aimpoint even though many of my guys stuck with the EO-Tech.

      • yvette99

        True enough about the $26 million, but the real impact would be getting disbarred from future procurements. If EOTech — or L-3, if it goes that high — can’t bid on future government contracts, they’re DRT.

    • milesfortis

      When your Senior VP for Operations in DC is a former Vice Chief of Staff of the Army (Richard Cody), your thought that L3 might know, quite precisely, how much moolah was going to be needed is spot on.

      Not that I don’t have the highest respect for the real Commander Cody.

      • whskee

        I just direct quoted their update, so the credit goes to SolSys, but your point is a very good one as to where that insight came from.

  • Yimmy

    Good. It’s about time the flaws were exposed. People who have tested these in combat systems have said there were issues for years, but no one listened until now.

  • I see in my crystal ball that EOTechs will be on sale with deep discounts this holiday season.

    Just saying 😉

  • A defense contractor ripping off taxpayers? No way! 🙁
    Looks like the optics market just got a competitor removed.

    • Joshua

      Technically Eotechs have had issues since before L3 purchased the company.

      L3 is so much more than optics.

  • Gregory

    When will the class action lawsuit begin for civilian purchases?

    • uisconfruzed

      WHY?!? Have you had a failure with yours?
      Say NO to an entitlement mentality!

      We’re WAY to litigious already.

      • Gregory

        I would not know if mine had a failure because I sold it. I found out I cannot use projected dot type sights because of an astigmatism. I see multiple super imposed images of the aiming dot or pattern. I was being sarcastic about a lawsuit.

        • uisconfruzed

          I feel better about you now 🙂
          I sold mine, I think due to my old man eyes and floaters the extra light of the ring washed out my target. I replaced it with an Aimpoint, less illumination.

  • Joshua

    Here’s the issue.

    I know people want to blame testing by CRANE, but its not them.

    This is an issue you run into all the time in weapons procurement. Parts or designs submitted are hand crafted to insanely high standards and usually only small amounts are made.

    These items are made in ways that are not sustainable for mass production, and once these items start being made by the thousands and being pushed into the field the real issues crop up.

    Procurement testing is good, but nothing tests a product like a soldier in combat.

    The DD RIS II is a prime example, it saw a couple of revisions prior to its adoption. However no one ever broke the bottom rail in half in testing. However once they hit the field and soldiers got them it wasn’t long before soldiers were snapping and bending the bottom rail. So DD had to fix this issue by increasing the thickness and removing lightning holes in the bottom rail which increased the weight slightly.

    Point is things like this get past government testing and one can’t truly see the flaws till a product is mass produced.

  • Pseudo

    Hey TFB, I’m personally interested in possible actions that consumers can take against L3 as I purchased an EOTech. I’m obviously not going to try to sue L3 myself, but I would be interested in joining a class action if one is brought against L3 by consumers. Please stay on this and let the community know whats going on, because you guys have a lot more connections to hear about something like that. I read the US government’s filing and they defrauded consumers just as much as the government. Of course, potentially putting soldier’s and law enforcement’s lives in danger is incomparably worse, but consumers have been shafted as well. I appreciate your coverage of this and hope you continue to follow this closely!

    • uisconfruzed

      Are you fighting in extreme temp scenarios or are you wanting something for nothing?
      We’re WAY to litigious already. The EO’s are great, I’ve owned two, along with two Aimpoints.

  • Peewee Sierrafour

    Eotech made ugly optics anyway, I’d stick to trij or aimpoint.

  • tony

    With a P/E close to 80 as of 11/25/2015, I will stay away from this stock like a plague

  • BigFED

    “On the other hand, L3 Communications is one of the only manufacturers of laser diode holographic weapon sights on the market…” So just because it is “one of the only”, that justifies using it? Has a accuracy problem in different temperatures ? That’s OK??? Back when I started adding AR platforms to my “collection”, I did a lot of research and hands on reviewing. Trijicon was a great product, but way too large in physical size and PRICE!!! The LEAST expensive model was about the same as the first RR AR I bought! Aim point came in first on almost ANY evaluation, simple, easy to use, small, light, endurance (physical and power). Just nothing to negate its selection. Still have them and still recommend them.

  • Core

    I own an Eotech military grade model. Not sure if it’s pre L3 or not. I haven’t had any problems with it. It is unique enough to give me exactly what I need in a sighting system. Being electronic I wouldn’t consider going without BUIS. I’ve used Trijicon, and red dot in the past, all good but not what the holosight brings to the table. If it breaks I’ll send it in for repair, I don’t expect perfection but it delivers every time thus far. I think the extreme issues can be addressed and will be addressed, and I plan to buy another model when they fix the issues for my next build.

  • LetsTryLibertyAgain

    At least the US military didn’t buy the N cell version of the EOTech. That was the first and only EOTech I’ve owned. It’d eat batteries, and I’m not talking about the problem the military had where the expected battery life was low when in use. Mine would completely discharge new batteries in less than a month when turned off. Every time I’d grab that weapon, I had to put two new N batteries in it, making it completely useless for a defensive weapon.

    I measured the quiescent current draw (I’m an electrical engineer!) and confirmed the battery draining current when turned off. I sent it back to L3 for repair. They sent it back and it was the same. No fix at all. I looked on the internet and this was apparently a blatant design flaw that never should have shipped. Once discovered, EOTech should have fixed the problem and paid shipping both ways, AND apologized to their customers for this negligent oversight. What did they do? Nada. They ignored the problem and hoped it wouldn’t hurt the sales of their new (at the time) XPS model that uses a CR123A battery.

    Every company can make a mistake. Good companies don’t make many. EOTech’s nonresponse to this mistake told me all I needed to know about L3 Communications. I guess when a company is accustomed to lucrative US military contracts, competing in a customer oriented free market is not going to be one of their strengths.

    I’ve often looked at the fraud and waste in federal government procurement, with outrageous schedule slips and nonstop cost overruns that are nothing but institutionalized theft, and I’ve wondered what it’d take for a supplier to be sued by the US government. Now we know.

  • Secundius

    There was one report, that said a Couple Hundred were made, without Serial Numbers and Sold the “Third Parties” of Unknown Origin’s. If TRUE, that order had to come from the VERY TOP of the Management…

  • jcitizen

    Their crap is so overpriced, I’m not going to feel sorry for them! I’ve used cheap junk for hunting that works fine for me, and no failures in any conditions yet. Even if they did, the price for a complete replacement STILL is way cheaper than paying extortion. I realize in combat you want the best, but it is getting ridiculous here. Besides, I’ve always done okay with iron sights – so in an emergency, I’m not to worried. My night vision is still good. Give me iron sights with tritium and I’m extra good. Most of mine come with that from the factory anyway – like Valmet.

  • Ken Fortin

    Go full auto, shootem all, gimme another beer…..

  • TRUBOOST

    Yet another example of you do NOT get what you pay for. Expensive does not mean superior. I actually love it when companies that screw consumers for years finally get what they deserve.