RMI fined $1 million for illegal exporting

LAFAYETTE – Lafayette-based Rocky Mountain Instrument Co. agreed to pay $1 million to the federal government to settle civil charges related to the illegal export of sensitive military information for the manufacture of certain equipment overseas.

RMI designs and manufactures optical components and assemblies for laser and imaging uses by the military and in the aerospace, medical and other fields. The company filed for chapter 11, or reorganization, bankruptcy in 2009.

RMI pleaded guilty to a related criminal charge in June and was sentenced at that time to forfeit $1 million and spend five years on probation.

The criminal plea agreement said that RMI exported from 2005 to 2007 prisms and technical data related to various optics used in military applications to Turkey, South Korea, China and Russia without having first obtained from the U.S. Department of State a license or written authorization for such exports as required under ITAR.

The civil settlement covers a related allegation that RMI caused defense contractors to submit false claims for payment to the Pentagon in violation of the False Claims Act by illegally exporting technical data that was used to manufacture parts used in certain military equipment the contractors sold to the Pentagon.

“This settlement with the Department of Justice is an unequivocal statement by RMI that it stands as a partner in compliance with the U.S. Government,” RMI’s chief executive Steven Hahn said in a statement.

“The errors we experienced were examined carefully, we took substantial remedial measures, implemented new controls and are now conducting operations at RMI as a model in this industry with respect to U.S. export controls.”

The penalty will not affect RMI’s progress out of Chapter 11 bankruptcy, Heller said.

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