ML20136B239

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Informs That No Applicable NRC Regulations Were Violated Re OI Rept Q2-90-014
ML20136B239
Person / Time
Issue date: 03/28/1991
From: Lieberman J
NRC OFFICE OF ENFORCEMENT (OE)
To: Ebneter S
NRC OFFICE OF INSPECTION & ENFORCEMENT (IE REGION II)
Shared Package
ML20136A614 List:
References
FOIA-96-475 NUDOCS 9703100215
Download: ML20136B239 (1)
v • d • e


Text

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NUCLEAR REGULATORY COMMISSION ..

W ASHING TON, D. C. *20555 <I# (

W s . . . . .h", . m 8 mi W ch MEMORANDUM FOR: Stewart D. Ebneter, Regional Administrator Region II FROM: James Lieberman, Director Office of Enforcement

SUBJECT:

OI REPORT Q2-90-014, RE: STOKLEY ENTERPRISES /SPECTRONIC The above captioned OI report involves the sale of refurbished surplus electrical components which were eventually placed in service at nuclear power plants. The findings of that report indicate that no applicable NRC regulations were vioJated. I do not intend to r? quest an OGC analysis of this report. We will consider this matter closed unless we rec _ive a different view within three weeks of the date of this memorandum. Please contact me or William Troskoski with any comments.

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rames Lieberman, Director ffice of Enforcement i

cc: H. Thompson, DEDS M tlow, NRR B. Hayes, OI

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MEMORANp{FOR: Chairman Carr 4

U.S. bo Commissioner Rogers JUN 13 190I .:4 Commissioner Curtiss k ' '

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Commissioner Remick yy g gj, g; 13 .

James M. Taylor

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SUBJECT:

PRESS RELEASE - STOKLEY ENTERPRISES, INC. y;,3_C)g_g g/

  • 'e to _ __ _ . . C The enclosed press release announcing the indictment of Stokley Enterprises, Inc. et al., was a direct result of the Shearon Harris Nuclear Facility identifying upon receipt, counterfeit / misrepresented circuit breakers, and bringing this matter to the staff's attention.

1 The Office of Investigations (01) with assistance from the technical staff, 3 conducted an investigation which determined that Stokley Enterprises, Inc. had provided counterfeit parts to other Governmental agencies. OI provided this information to the Naval Investigative Service, Norfolk, Virginia, which, in

. turn, utilized our information and executed a criminal search warrant in which additional evidence was obtained.

The technical and investigative arms of the Commission regularly meet with their counterparts to exchange this type of information.

Original Signed gp James M. Taylor James M. Taylor Executive Director for Operations

Enclosure:

Press Release cc: SECY/0GC DISTRIBUTION:

ED0 Reading DEDR Reading JTaylor JSniezek HThompson JBlaha JWafes document name:stok-mem EDb i ek: sam JMTi r q 1 06/ 91 l 1 s 1

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PRESS RELEASE 2

I FOR INNEDIATE RELEASE

! WORFOLE, VIRGINIA )

l June 10, 1991 i MENRY E. BUDSON, UNITED STATES ATTORNEY FOR THE EASTERN 4

l DISTRICT OF VIRGINIA, AND NEILL R. ROBINS, SPECIAL AGENT IN l l j

CHARGE, MID-ATLANTIC REGIONAL FRAUD UNIT, HAVAL INVESTIGATIVE '

I BERVICE, NORFOLK, ANNOUNCED TODAY THAT A FEDERAL ORAND JURY '

l l RETURNED A TNENTY-COUNT INDICTNENT IN & CASE INVOLVING l

! COUNTERFEIT ELECTRONIC FARTS SOLD TO NAVY WAR 8 HIP 8 A i

l NUCLEAR REACTOR 8.

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THE INDICTNENT CHARGES WILLIAM N. STOKLEY, JAN R M. STOKLEY, t

I a AND THEIR COMPANY, STOKLEY ENTERPRISE 8, INC., WITH ONE COUNT OF l CONSFIRACY AND NINETEEN COUNT 5'.0F TRAFFICKING IN COUNTERFEI -

i l GOODS. WILLIAM M. BTOKLEY IS A 39-YEAR-OLD NORFOLK RESIDENT.

l 34-YEARS-OLD. THE HEADQUARTERS FOR MIS WIFE, JANET STOKLEY, 18 l *

IN HORFOLK,

$TOKLEY ENTERPRISES,i1NC., 18 840 AVENUE J.,

! VIRGINIA.

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THE INDICTMENT AL1.EGES TNAT TNE STOKLEY8, OPERATING THROUGH STOKLEY ENTERPRISES, MANUFACTURED A VARIETY OF COUNTERFEIT ELECTRONIC PARTS, SUCH A8 CIRCUIT BREAKERS, TRANSFORMERS, AND l ACCORDING TO THE INDICTMENT, THE8E PARTS SHIPBOARD CONTROLLERS.

WERE THEN SOLD TO VARIOUS CUSTOMERS, INCLUDING THE UNITED STATES

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- O THE INDICTMENT

NAVY AND SUBCONTRACTORS NORKING ON NAVY VESSELS.

CHARGES THAT THE8E PARTS WERE DESTINED TO BE USED IN INFORT FOR EXAMPLE, THE INDICTHENT ALLEGE 8 THAT SOME OF i APPLICATIONS.

l THE PARTS WERE TO BE USED IN THE OVERHAUL OF THE PONER CON i

i SYSTEN OF THE REACTOR C00LhNT PUNPS AND THE PRESSURIEER F i-ie NUCLEAR-PONERED FAST ATTACK SUSMARINE U8s BALTIMORE.

ALSO ALLEGED Is THAT A CIRCUIT BREAKER WAS INSTALLED IN SUPPOR i

l FIRE C6HTROL RADAR ON THE AEGIS CLASS GUIDED MISSILE C ,

l PRINCETON AND NA8 IN USE IN THE VE5SEL NHEN IT NA8 DEPLOYE l (THE US8 l THE PERSIAN OULF DURING OPERATION DE8ERT STORM.

THE L PRINCETCH HIT A SEA-MINE WHILE DEPLOYED IN THE GULF.) .

l INDICTHENT ALSO CHARGES THAT THE STOKLEY8 SENT 22 MOTOR-RELAYS To THE SHEARON HARRIS NUCLEAR PONER PLANT IN NEN HILL, l NORTE CAROLINA.

l THE INDIC' MENT ALLEGES THAT THE STOKLEYS RIRED VARIOUS l '

EMP MYEE8 AT THEIR PLANT, WHO THEN RENORKED CLD AND SURPLUS

. THE INDICTMENT l ELECTRONIC PART8 To MAKE THEN APPEAR To BE NEN.

l., ALSO CHARGES THAT THE SToKLEYS WOULD BUY COUNTERFEIT 8

i4 r FROM VIRGINIA ART METAL AND PLASTIC COMPANY TO INSTAL l

RENORKED PARTS. THE COUNTERFEIT LABEL PLATES BORE THE TRADEMAR l

  • OF SUCH COMPANIES A5 OENERAL ELECTRIC, NESTINGHOUSE, 67EFFERSON

! ACCORDING TO THE INDICTMENT,

! ELECTRIC, AND CUTLER-MANNER.

I l STOKLEY EMPLOYEES ADDED THE PHONY LABEL PLATES TO MAK i

PRODUCTS APPEAR TO DE ERAND NEN AND MANUFACTURED BY L ELECTRONIC COMPANIES.

1 l THE INDICTMENT ALLEGES THAT THE8E LABEL PLATER LEAD TO 2

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_ _ _ _ . ~ . _ _ _ _ . _ _ _ . _ _ . _ _ _ _ _ . _ _ . _ _ . . . _ _ . . . _ _ . . . _ . . _ _ _ _ . _ _ _ _ _ _ . _ .

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00NPUSION, DECEPTION, AND MISTAKE SY CUSTOMERS OF THE STOKLEYS. i l TNF IMDICTNENT ALLEGE 5 TKAT SOME OF THE PARTS THAT THE STOKLEYS I 6044 WERE UN8AFE AND TMAT OTHERS WOULD NOT OPERATE PROPERLY.

l THE INDICTMENT ALSO CMARCES THAT WILLIAM STOKLEY GAVE FALSE f INFORMATION TO INVESTIGATORS FROM THE NUCLEAR REGULATORY COMMISSION WNo WERE INVESTIGATING THE COUNTERFEIT PARTS THAT THE 1 1

I GTOKLEY5 SHIPPED TO'THE SMEARON HARRIS NUCLEAR PONER PLANT.

ACCORDING TO THE INDICTHENT, ON .7UNE 14, 1990, THE STOKLEYS SENT j 22 COUNTERFEIT RELAYS TO THE PLANT. ON .7UNE 27, 1990, 4

j INVESTICATORS FROM THE NUCLEAR REGULATORY COMMISSION CAME To

! NORFOLK TO INTERVIEN STOKLEY, THE INDICTNENT ALLEGES. AT THAT TIME, BTOKLEY LIED SY SAYING THAT HIS COMPANY DID NOT REPLACE l LABEL PLATES ON THE ELECTRONIC COMPONENTS THAT IT SOLD AND BY l

SAYING THAT HIS COMPANY DID NOT RENORK ELECTRONIC PARTS, THE INDICTNENT CHARGES.

THE INDICTMENT ALSO ALLEGE 8 THAT STOKLEY ENTERPRI8E8 WAS IN THELPR00888 0F ASSEN8 LING COUNTERFEIT CIRCUIT BREAKERS AND l

l SHIPBCARD CONTROL 8 WHEN AGENTS FROM THE NAVAL INVESTIGATIVE i

l SEAVICE DESCENDED ON THE PLANT TO EXECUTE A FEDERAL SEARCH t

i WARRANT OH 82PTEH8ER 13, 1990. THE AGENTS FOUND THE EMPI4YEE8 0F ,

l STORLEY NERE REPLATING CONTACT 8 AND REPAINTING PART5 ON AN ORDER i

FOR NEN GENERAL EIcECTRIC SHIP 30ARD CONTROLS THAT WAS To BE SENT TO.THE INGALLS SMIPBUILDING COMPANY IN PASCAGOUIA, MIS 8ISSIPPI.

j THE INDICTMENT AL80 ALLEGES THAT THE STOKLEYS HAD AN INVENTORY OF j CowrERrEIT IanEL PLATE 8, INeLUDINo COUNTERrEIT aENEnAL mLEeTate

} LABEL PLATES THAT THEY HERE USING TO MAKE THE PHONY GENERAL i

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ELECTRIC BHIPSOARD CONTROL 8.

UNDER THE INDICTMENT, THE ST0KLEY8 FACE A MAXIMUN POSSIBLE '

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j PRISON TERM OF 100 YEARS AND FIVE MILLION 00LLAR8 IN FINES.

COMPANY FACES A MAXIMUM POSSIBLE PENALTY OF TEN MIL I IN FINE 8.

f THE INVESTIGATION OF THE STOKLEYS NAS CONDUCTED BY INVESTIGATIVE SERVICE AND BY THE NUCLEAR REGULATORY COMNIB8 ION, f HUDs0N FRAISED THE ELEVEN-NONTH INVESTIGATION, f

j SAID MUDSON.

f. CITING IT As AN EXAMPLE OF CLO8E COOPERATION BETNEEN D

! FEDERAL AGENCIE8.

MUD 80N STATED, "THOSE WHO PRODUCE COUNTERFEIT PARTS MUST BE l

AWARE THAT THEY CAN BE HELD ACCOUNTABLE UNDER THE FE HUDSON ADDED, # DELIBERATELY PRODUCING CRIMINAL STATUTE." 1 COUNTER 7EIT PARTS FOR CUR FIGHTING VE8SELS IS REPR -

CONDUCT, AND THOSE WHO ARE RESPONSIBLE WILL BE VIGOROUSLY HUDSON AL50 PRO 8ECUTED BY THE UNITED STATES ATTORNEY'8 OFFICE."

NOTED TMAT THE NAVAL INVESTIGATIVE SERVICES IS CONDUC ADDITIONAL INVESTIGhTION8 INTO THE PRODUCTION OF CO PARTS IN THE TIDEWATER AREA.

l UNITED STATES MAGISTRATE THOMAS MILLER SET ARRAIG

  • l l

THE STOKLEY8 FOR 11:00 A.M. ON JUNE 12, 1991, IN NORFOLK. l f

ASSISTANT UNITED STATES ATTORNEY PAUL G. CASSE COMSTOCK HANDLED THE A,881STANT UNITED BTATES ATTORNEY KEVIN M l l

CASE FOR MUD 80N'S OFFICE.

FURTHER QUE8TIONS MAY BE DIRECTED TO THE UNITED STA i

ATTORNEY'8 OFFICE AT 804-441-6331.

4

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i The attached press relase announcing the indictment of Stokley Enterprises, 1

Inc., et. al., was a direct result'of the Shearon Harris Nuclear Facili_ty s .

3 identifying upon receipt, counterfeit / misrepresented circuit breakers, and i bringing this matter to th>s staff's attention.

l The Office of Investigations (01), with assistance from the technical staff,

{ conducted an investigation which determined that Stokley Enterprises, Inc. had i

provided counterfeit parts to other Govenrmental agencies. 01 provided this
information to the Naval Investigative Service, Norfolk, Virginia, which, in turn, utilized our information and executed a criminal search warrant in which additional evidence was obtained.

4 The technical and investigative arms of the Commission regularly meet with

! their counterparts to exhenage this type of information.

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JTaylor l

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