Former metallurgist lab director pleads guilty to major fraud on USA

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Tacoma – The former Director of Metallurgy at Bradken Inc. pleaded guilty today in U.S. District Court in Tacoma to defrauding the United States by falsifying test results that measure the strength and toughness of steel used in U.S. Navy submarines, announced U.S. Attorney Nick Brown.  Elaine Thomas, 67, of Auburn, Washington, pleaded guilty to major fraud on the United States.  She faces up to 10 years in prison and a $1 million fine when sentenced by U.S. District Judge Benjamin H. Settle on February 14, 2022.

According to records filed in the case, Bradken is the U.S. Navy’s leading supplier of cast high-yield steel for naval submarines.  Bradken’s Tacoma foundry produces castings that prime contractors use to fabricate submarine hulls.  The Navy requires that the steel meets certain standards for strength and toughness to ensure that it does not fail under certain circumstances, such as a collision.  For 30 years, the Tacoma foundry (which was acquired by Bradken in 2008), produced castings, many of which had failed lab tests and did not meet the Navy’s standards.  Elaine Thomas, as Director of Metallurgy, falsified test results to hide the fact that the steel had failed the tests.  Thomas falsified results for over 240 productions of steel, which represent a substantial percentage of the castings Bradken produced for the Navy. 

Court filings indicate there is no evidence that Bradken’s management was aware of the fraud until May 2017.  At that time, a lab employee discovered that test cards had been altered and that other discrepancies existed in Bradken’s records.  In June 2020, Bradken entered into a deferred prosecution agreement, accepting responsibility for the offense and agreeing to take remedial measures.  Bradken also entered into a civil settlement, paying $10,896,924 to resolve allegations that the foundry produced and sold substandard steel components for installation on U.S. Navy submarines.

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The Navy has taken extensive steps to ensure the safe operation of the affected submarines.  Those measures will result in increased costs and maintenance as the substandard parts are monitored.  

The criminal case against Thomas, deferred prosecution agreement, and civil settlement with Bradken are the result of a coordinated effort among the U.S. Attorney’s Office for the Western District of Washington, the Civil Division’s Commercial Litigation Branch, the Department of Defense Office of Inspector General’s Defense Criminal Investigative Service, Naval Criminal Investigative Service, and the Defense Contract Audit Agency. 

The criminal prosecution is being handled by Assistant United States Attorney Seth Wilkinson.

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