N.I. Teijin Shoji: Allegedly Reselling Zylon After a Weaver Stopped Selling

N.I. Teijin Shoji, also known as N.I. Teisho, agreed to pay $1.5 million to resolve potential False Claims Act claims over allegedly reselling Zylon after a weaver stopped selling it. The government alleged that the importer bought woven fabric back from a Canadian weaver that feared liability, then sold it directly to American body-armor manufacturers. For someone who knew the material or handled those sales, the important question is what happened after the refusal.

The Justice Department announced the settlement on January 25, 2011. It covered the Japanese importer and its American subsidiary. The companies imported Zylon on behalf of the fiber’s Japanese manufacturer, Toyobo. Vest makers used the fiber as the key ballistic material in bulletproof vests.

The Alleged 2002 Resale Changed Who Sold the Fabric

For a period in 2002, the Teijin companies allegedly bought back Zylon fabric from the Canadian weaver to which they had sold fiber for weaving. The weaver had refused to sell the fabric because it feared potential liability. According to the government, Teijin then sold that fabric directly to American body-armor manufacturers.

That sequence connects different stages of the business. Toyobo made the fiber. Teijin imported it and supplied the weaver. The weaver turned fiber into fabric for use in body armor. In the government’s account, the weaver’s refusal interrupted that route to the vest manufacturers, and Teijin took over the sale of the woven material.

We see the disturbing point in that handoff: the concern serious enough to stop the weaver’s sales allegedly became a transaction the importer took on. The same fabric, with a different seller.

An insider who handled the purchase-back may know why the seller changed and what the next buyer was told about the fabric.

Degradation Concerns and the Sales Message

The United States alleged that the Teijin companies knew Zylon degraded quickly over time and that this degradation made vests containing woven Zylon unfit for use. It further alleged that the companies failed to tell the United States about those concerns or stop selling the fiber for ballistic use. Teijin personnel allegedly continued marketing Zylon and downplayed the extent of the problem.

The allegations put the importer inside the marketing effort as well as the supply chain. The alleged purchase-back belongs in that context: the material continued toward body-armor manufacturers after another business had refused to sell it.

For defective goods sold into government purchasing, the difference between internal product knowledge and customer assurances is central. Here, we would examine the degradation information alongside the marketing representations and the decision to continue selling. An employee who understood the material may be able to explain why a reassuring sales statement concealed a serious performance concern.

The consequence was particularly stark for body armor. Taxpayers were buying protection for law enforcement officers.

What the Wider Zylon Findings Showed

The Department of Defense Office of Inspector General’s 2018 oversight report describes allegations that Toyobo knew ordinary heat and humidity rapidly degraded Zylon.

The report also recounts the National Institute of Justice’s August 2005 determination that vests containing more than 50 percent Zylon could not stop bullets they had been certified to stop. A vest’s promised protection and its ability to provide that protection over time had come apart.

The Larger Zylon Investigation

By the time of Teijin’s settlement, the United States had settled with eight other participants in the Zylon body-armor industry for more than $59 million. Teijin pledged to cooperate with the continuing investigation.

In Itochu’s Zylon settlement, the government likewise alleged that the importers knew of degradation but marketed Zylon and understated its unsuitability for vests.

The Records Behind the Refusal and Resale

For a person inside an importer, weaver or body-armor manufacturer, the Teijin allegations give the transaction records a specific purpose. We examine how the material’s known condition connects to the refusal, the purchase-back, the later sale and the government-funded purchase. Each business may see a different part of that sequence.

If you handled the supplier relationship, you may know what the weaver said and who received that message. If you worked in sales or product quality, you may know how degradation concerns compared with the assurances customers received. If you handled the purchase-back or resale, you may know how the company arranged to keep the material moving. We bring those perspectives together around the decisions and representations that affected the sale.

A whistleblower case under the False Claims Act can pay 15% to 30% of what the government recovers.

You Know Why the Sale Stopped

If you know who refused defective material and how it reached a government supplier anyway, speak with our whistleblower experts about that decision. We work beside you to connect the quality concerns, sales representations and purchasing chain into your strongest case, and bring in government procurement fraud whistleblower lawyers who understand defective-material claims. You have our expertise and support from the first conversation through the case.