L-3 Communications Holdings Inc, which owns EOTech, agreed on Tuesday to pay the US government $25.6 million to settle a lawsuit accusing the company of providing thousands of defective holographic sights to the military, despite knowing that the sights were defective.

According to Reuters, L-3’s shares dropped as much as 6.1 percent after the lawsuit was filed on Tuesday, but recovered after the company announced the settlement and ended the day at just a 1.1 percent drop. The settlement still requires court approval before it can be paid.

In a copy of the lawsuit obtained by soldiersystems.net, the government accused L-3 of knowingly selling defective sights in a scheme to defraud the Department of Defense (DoD), Department of Homeland Security, and the Federal Bureau of Investigation. EOTech president Paul Mangano was also included alongside L-3 Communications as a defendant.

“Beginning around 2006, Defendants became aware that design defects in the sights caused them to fail in cold temperatures and in humid environments. EOTech was contractually obligated to disclose these efects to DoD, so that DoD could prevent defective products from being fielded to troops. Defendants nevertheless failed to disclose these defects, while touting the U.S. military’s use of their products in order to boost their image and drive sales in the commercial marketplace,” stated the lawsuit.

The lawsuit further claimed that EOTech initially told the DoD that the sights performed in temperatures ranging from -40 degrees to 140 degrees Fahrenheit, as well as in humid conditions. In practice, however, government officials said that the sights failed to perform in extreme temperatures and produced an error called “thermal drift.” In an extremely hot or cold environment, officials said that the sight’s point of aim began to shift, making the sight inaccurate. The US government also claims that EOTech discovered this fact almost a decade ago and it was only when the FBI independently confirmed the thermal drift that the company voluntarily disclosed the defect.

“Even though Defendants knew of EOTech’s contractual obligation to disclose reliability issues involving the sights, Defendants delayed disclosure of this negative information about the sights’ performance to the Government. Moreover, even after Defendants learned of the defects, EOTech continued to sell sights to the Government without disclosing the defects,” stated the lawsuit.

Officials claim that the defect can be noticed at around 32 degrees when the aiming dot becomes visibly distorted. As temperatures drop, the distortion becomes more drastic and can affect accuracy by as much as 20 inches for every 100 yards. Defects also occurred in warm and very humid situations.

The recent settlement is yet another black eye for the holding company. L-3 Communications also agreed in September to pay out $4.63 million to settle allegations that they overcharged the US government for contractor work at military bases in Texas and Georgia.

Featured image courtesy US Army

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20 thoughts on “Maker of EOTech Sights Pays $25.6 Million to Settle Fraud Lawsuit

  1. So, the government just took their word for it?
    They never torture tested them, and put them up against 10 other vendors, like they do everything from toothpix to howitzers before they bought them?
    I’d be looking for who got greased!

  2. Most of Eotech’s products are manufactured by a company called Optiflow Inc. in Ann Arbor. Optiflow Inc. owns the patent regarding a fix on the thermal drift issue for these particular gun sights. They also created the latch system for the base of the EXPS.

    1. Curious? I just got the HHS 2 today ? Exps2-2 is the sight, with the G33 magnifier. My box says inspected in September of 2015. I immediately tried to call eotech before even knowing anything about any of this until just now. The sight was very blurry. But after playing with it for a while looking at different distances off my patio deck it seemed to be better. But now I’m wondering since they just shipped it to me and it’s cold here, the box and sight was cold, and now just playing with it in the house is why it got better? Do you think mine is one of the ones that are included or everyone of them they are still producing are still the same way? Can’t believe I’m just now hearing for the first time. I tried to contact them today, but apparently they only work every other Friday. This must be that Friday cuz they don’t answer . Smh

    2. This sight is junk period mine just would not cut on one day for no reason. Glad eotech has the buyback program though just sent mine in last week now got to wait for the check to be cut in 8 to 12 weeks.

    1. Why would you want to have their optic after reading this is beyond me. They have a buyback program which you may have already heard about. In my case I had the Exps3-0 which stop powering up a few weeks ago for no reason. They are paying for msrp for what it cost new so can’t wait to get the check so I can buy a real optic.

    1. No even if it does not distort which is unlikely it will simply stop working period and not ever cut on again like mine recently did. My eotech Exps3 did just that a few weeks ago. The only positive thing is they have a buyback program for these defective sights and are paying full msrp for what they cost new. Now I got to wait 8 to 12 weeks for them to cut me a check.

      1. No I don’t think I did. I had to put the serial number and other info on their online return form and they emailed me with the approval. You also have to put what price you feel they should pay and if they don’t agree with that it will be reflected in the reply. I put what I paid for it brand new and they agreed to pay it. If you have the Exps3 I suggest you return it asap to them even if it still works especially since they will pay you full msrp like they did me when I bought it 2 years ago.

      2. Thanks for the info. I bought a 512 a few years ago and never had a problem, but I also didn’t register it.

        I’d heard that cold weather brought out the defect, so I left it outside in below freezing conditions and the red dot still cowitnessed with my irons.

        Hopefully I don’t have a problem, I’m fond of the sight.

        Again, thanks for the info.

  3. Did any of the companies executives go to jail over this? They are as bad as leftists, getting away with criminal behavior, while putting the financial loss on its stock holders, and endangering our troops.
    If people continue to support this company, our country has slipped further towards the point of no return.

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