Moritz Embroidery Works has agreed to pay $500,000 to settle a False Claims Act suit that alleged violations of the Buy American Act.

The company won a contract to supply the Dept. of Defense with U.S. flag patches for use on military uniforms. As part of the contract specifications, Moritz agreed to comply with statutes requiring that the patches be produced in the United States.

The False Claims Act suit against Moritz was brought Action Embroidery Corp. under the qui tam provisions of the law, which allow private relators to bring suits on behalf of the government. Action learned that the patches were in fact being produced in Thailand.

The U.S. Attorney’s Office for the Middle District of Pennsylvania issued a July 10, 2007 press release on the settlement.

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