3D Printing Company to Pay Up to $4.54 Million to Settle False Claims Act Allegations for Export Violations in Connection with NASA and DOD Contracts

A 3D printing company has agreed to pay the United States up to $4.54 million to resolve allegations that it violated the False Claims Act by improperly transmitting export-controlled technical data to China in violation of the export control laws of the United States in connection with certain NASA and DOD contracts, announced U.S. Attorney for the Northern District of Texas Leigha Simonton.

In parallel agreements also related to alleged export violations, the company has agreed to a $20 million administrative settlement with the U.S. Department of State, and a $2.77 million administrative settlement with the U.S. Department of Commerce. 

Per the terms of a civil settlement executed with the Department of Justice on February 27, 2023, South Carolina-based 3D Systems Corporation agreed to pay $2.27 million in restitution to the federal government within the next 30 days. The company may be required to pay an additional $2.27 million in penalties under the Justice Department settlement agreement, for a total of up to $4.54 million, if it fails to pay at least that amount in civil penalties to the Department of State and the Department of Commerce in connection with the parallel administrative settlements referenced above.

According to the Justice Department Settlement Agreement, 3D Systems – through its Quickparts subsidiary – completed on-demand manufacturing projects both directly and indirectly on contracts issued by DOD and NASA, including for projects involving technical or other data potentially classified under and controlled by the International Emergency Economic Powers Act, the Arms Export Control Act, the Export Administration Regulations, and/or the International Traffic in Arms Regulations (collectively, the Export Control Laws). 

Generally, the Export Control Laws prohibit certain controlled items and/or intellectual property from being exported to certain foreign countries, including the People’s Republic of China, without a license or authorization from the appropriate federal agencies.  In the Justice Department settlement agreement, the United States alleged that between January 1, 2012 and December 31, 2017 3D exported certain items and/or intellectual property to China without the appropriate license or authorization in violation of the Export Control Laws in connection with certain contracts issued by DOD and NASA in violation of the False Claims Act.

The claims resolved by the settlement are allegations only. There has been no determination of liability.

This matter was jointly investigated by the U.S. Department of Defense Office of Inspector General, Defense Criminal Investigative Service, the National Aeronautics and Space Administration Office of Inspector General, Homeland Security Investigations, and the U.S. Department of Commerce, Office of Export Enforcement.  Assistant U.S. Attorney Kenneth Coffin handled this matter on behalf of the Department of Justice.