PVC Pipe Fraud Leads to False Claims Act (Qui tam) Lawsuits
Four states (Delaware, Nevada, Tennesse and Virginia) and 43 California localities have joined a False Claims Act (qui tam) lawsuit against Formos Plastics and JM Eagle for defective PVC pipes used they purchased for their water and sewage systems. Allegedly, the pipes do not have the tensile strength and have a tendency to break prematurely.
The whistleblower, John Hendrix, accused his former employer of falsifying the test results regarding the longevity of its products. For example, according to the NY Times, pipes that were advertised to last 50 years have broken in the the first year. Hendrix was fired after he told is managers about his concerns with the products. Hendrix’s supervisor’s told him it was a “business risk.”