Japan’s Toyobo and its US subsidiary, Toyobo USA, have agreed to pay $66 million to resolve claims that they sold defective fiber used in bullet-proof vests bought by US agencies.

The Department of Justice (DoJ) said the payment resolves allegations that Toyobo knew, from at least 2001 to 2005, that its Zylon fiber degraded quickly in normal heat and humidity, rendering the bullet-proof vests unfit for use. The Japanese company is the sole maker of Zylon.

Despite this knowledge, Toyobo is alleged to have continued to market Zylon for bullet-proof vests, publishing misleading data that understated the degradation problem. In addition, when Second Chance Body Armor recalled in late 2003 some of its vests that contained the fiber, Toyobo is accused of starting a public relations campaign designed to influence other body armor manufacturers to keep selling vests made with Zylon.

The US said Toyobo’s actions delayed by several years the government’s efforts to determine the true extent of Zylon degradation. Finally, in August 2005, the National Institute of Justice (NIJ) completed a study of Zylon-containing vests and discovered that more than 50% of used vests could not stop the bullets that they had been certified to stop. The NIJ subsequently decertified all Zylon-containing vests.

The settlement is part of a larger probe by the DoJ’s Civil Division into the body armor industry’s use of Zylon. The DoJ said the Civil Division has previously recovered more than $66 million from 16 entities involved in the manufacture, distribution or sale of Zylon vests, including body armor manufacturers, weavers, international trading companies and five individuals. The settlement with Toyobo brings the Division’s overall recoveries to more than $132 million.

Toyobo has denied all allegations but said it decided to enter into a settlement agreement after considering the costs to continue, the uncertainty of the jury verdict and the potential of further delays.