Contractor settles with Department of Justice, whistle blower to get $48,000

A Carson City man who accused his employer of shipping untested or mis-tested components to the military and NASA will receive a $48,000 reward.

Scott Peterson, who was a technician support-quality assurance employee for Carson City-based Maxwell-Sierra, charged that the firm and five present or former employees failed to test or improperly tested electronic capacitors and filters, key components in a number of military and aerospace systems.

Peterson will receive 15 percent of a $320,000 settlement announced by the U.S. Department of Justice on Tuesday,.

The Justice Department said the case was opened in 1994 in Reno's U.S. District Court under the False Claims Act. The act provides that a whistleblower can file an action on behalf of the United States and receive a portion of any recovery.

Michael Sund, spokesman for parent company Maxwell Technology, said the settlement resulted from allegations made in the early 1990s by an employee.

Maxwell Technology bought Sierra Aerospace Technology Inc. in February 1992 and renamed it Maxwell-Sierra. The company has since built a new facility at 5200 Sigstrom Drive, in the industrial area north of Carson City Airport.

"Essentially, this is something that happened a long time ago under prior management and the company has elected to settle it without any admission of fault," Sund said from Maxwell Technologies' headquarters in San Diego, Calif.

He said there had never been any complaints of parts failures nor any replacements of the parts involved in Peterson's allegations.

Few people remain at the company who were there when the alleged problems would have happened, he said. Sund said it is difficult to try to reconstruct what happened that long ago. Continuing to try to answer questions could have been more expensive than settling for the agreed amount, he said.

Attempts to contact Peterson or his attorney, Dale Coulam of Carson City, were unsuccessful Tuesday.

Peterson is slated to received $48,000 under the whistleblower provisions of the False Claims Act.

Charles Miller, a Department of Justice spokesman, said the government has recovered more than $3 billion from suppliers since the whistleblower provisions were added to the act in 1986.

Sund said Maxwell-Sierra has undergone significant expansion and investment since the purchase by Maxwell Technologies. "It's a different company, really," Sund said.

Besides supplying military components, Maxwell-Sierra has developed many specialized components for civilian uses, he said. Electronic filters that protect pacemakers and implantable heart defibrillators from interference from cellular phones are an important product of Maxwell-Sierra.

Maxwell Technologies owns a number of companies that provide parts for military and space applications including satellites and space shuttles. One subsidiary is developing a "radiation-hardened" version of the Pentium computer microprocessor, which would resist the bombardment of radiation during future space missions.

Sund said the company may benefit somewhat in obtaining future military or space contacts from not having the cloud of the Maxwell-Sierra investigation hanging over its head.