JM Eagle Press ConferenceQui Tam Investigation

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					JM Eagle Press Conference–Qui Tam Investigation!
           What is a Qui Tam
•  The Federal False Claims act (qui tam) allows civil damages
   and penalties for false claims made to the government.!
•  A private citizen may file suit on behalf of the government. !
•  Must be filed under seal to allow the federal government time
   to investigate. This is called the “Intervention decision.”!
•  If the government declines to intervene, the “relater” may
   move forward on his own and receive as much as 30 percent
   of claims. !
•  The relater still moves forward on behalf of the federal
   The Federal Investigation!
•  Began July 2006.!
•  The government requested and JM Eagle provided:
   –  Random samples for testing.!
   –  Tens of thousands of pages of documentation.!
•  JM Eagle met with investigators four times.!
•  The state of California was actively involved.
   Complaint was originally filed in California.!
•  Additional states joined the investigation:
   Delaware, Florida, Nevada, Tennessee,
   Massachusetts and Virginia.!
    Govt. Agencies Decline
•  After more than three years of intensive
   investigation, federal government declined
   to intervene.!
•  Statement released Feb. 9, 2010: “… The
   Government elects to decline to intervene.”!
•  The state of California said it would also not
      Florida AGʼs Statement
•  Florida Attorney General Bill McCollum announced
   his office would not intervene.!
• wrote of the Florida case:
   “ʻAfter we looked at it, we concluded the same
   thing (as the federal government),ʼ McCollum said.
   ʻSo we chose not to join in this one.ʼ” !
•  Florida was one of the seven original states
   involved in the investigation. !
•  It is very unusual for a state to proactively declare it
   will not intervene. !
States and Municipalities May
        Be Intervening!
 •  Delaware, Nevada, Tennessee and Virginia
    have chosen to intervene, according to the
    a press release from the plaintiffʼs law firm.!
 •  The release said 43 municipalities also
    decided to intervene. !
    •  Not one has asked JM Eagle for facts. !
    •  Not one registered a complaint with JM Eagle about
       leaking pipes related to these circumstances.!
    •  JM Eagle invites these municipalities to review evidence.!
   States and Municipalities
•  There is no evidence that the states and
   municipalities intervening have had pipe
   failure related to the quality of the pipe,
   according to the relaterʼs press release. !
   Delaware AG Statement
•  Delaware is one of four states
   currently involved in the qui tam suit.!
•  A spokesman for the Delaware
   Attorney Generalʼs office told Plastics
   News that Delaware has experienced
   “no known failures of the pipe.”!
     Pipe Failure in Nevada!
•  Nevada has also intervened.!
•  Gus Nuñez, manager of the Nevada Public works
   board, blamed faulty installation on the several
   breaks in pipe leading to a prison complex.!
•  The New York Times wrote, paraphrasing Nunez:
   “Specialists faulted the materials supporting the
   pipe and the installers.”!
•  CRT Laboratories, an independent company, came
   to the conclusion that breaks due to installation
       CRTʼs Conclusions
•  “The bell and pipe show evidence of
   excessive insertion force and
•  “Scars on the inside of the bell show
   the pipe was inserted with
   considerable pressure.”!
         Quality Claims/

        JM Eagle Integrity!
•  JM Eagleʼs gross quality claim rate
   never reached one-tenth of 1 percent
   between 2005 and 2009. !
•  Gross quality claims include any claim
   made about the pipe itself. This
   includes damages in transportation,
   installation and storage.!
     Whistleblower Integrity
•  The plaintiff, John Hendrix, was terminated
   due to ethical violations.!
•  A sworn statement by a contractor declares
   that Hendrix proposed:!
  –  Inflating a quality claim against JM Eagle in
     order to “stick it” to the company.!
  –  Receiving a kickback earnings on the inflated
     claim: “After getting your money and cashing
     the check, I will send you my address so you
     compensate me for my efforts on your behalf.”!
                    Key Points
•  JM Eagle cooperated in a thorough qui tam investigation.!
•  The U.S. government has declined to intervene, as has
   California where original complaint was filed.!
•  Four states and 43 municipalities are intervening on “free
•  Florida will not intervene.!
•  Delaware has experienced no known failure of its pipe.!
•  Breaks in Nevada were do to installation errors.!
•  JM Eagle adheres to the highest levels of quality and ethics.!
•  The integrity of the relater is in question.!