Pending Criminal Division Cases

United States v. Hydro Extrusion Portland, INC., f/k/a Sapa Profiles, Inc.
Court Docket No.: 1:19-cr-00123 (E.D. Virginia)

United States v. HYDRO EXTRUSION USA, LLC, f/k/a Sapa Extrusions, Inc.
Court Docket No.: 1:19-cr-00124 (E.D. Virginia)

Court Assigned: These cases are assigned to U.S. District Judge Liam O'Grady, U.S. District Court for the Eastern District of Virginia, Albert V. Bryan U.S. Courthouse, 401 Courthouse Square, Alexandria, VA 22314.


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Criminal Charges: On May 13, 2019, Hydro Extrusion Portland, Inc., formerly known as Sapa Profiles, Inc. (“SPI”), is expected to plead guilty to an April 2019 Information charging it with one count of mail fraud, and Hydro Extrusion USA, LLC, formerly known as Sapa Extrusions, LLC (“SEI”), is expected to enter into a 3 year Deferred Prosecution Agreement to resolve an April 2019 Information charging it with one count of mail fraud.  The violations relate to a scheme to conceal the inconsistent quality of aluminum extrusions produced by SPI for its customers, including U.S. government prime contractors and subcontractors, by falsifying thousands of failing tensile test results on those extrusions; to increase SPI’s and SEI’s profits and productivity by preventing delays in production and the costly scrapping of metal; and to obtain bonuses for the employees involved, which were calculated in part based on a production metric. 

The employees generally falsified the tests in one of two ways.  First, from in or about 1996 through in or about 2006, an SPI plant manager led a scheme to make thousands of handwritten alterations to failing test results by changing failing numbers that fell below the minimum required test results to appear to be passing.  Those numbers were then typed onto a certification and provided to customers.  Second, from in or about 2002 through September 2015, Dennis Balius, the SPI testing lab supervisor, led a scheme to alter tests within SPI’s computerized systems and provide false certifications with the altered results to customers. Balius pleaded guilty in July 2017 and has been sentenced for his role in the scheme.  As part of the guilty plea and DPA, Hydro Extrusion Portland, Inc. will pay $34.1 million in restitution and comply with a requirement to report annually regarding remediation and implementation of a compliance program.  SPI has also agreed to forfeit $1.8 million in ill-gotten gains. 

A number of significant factors contributed to the Department’s criminal resolution with the companies.  Among these, the companies received significant credit for their cooperation with the Department’s investigation and their engagement in extensive remedial measures to address the misconduct, including the termination and severance of employees who were involved, the implementation of state-of-the-art equipment to automate the tensile testing process, company-wide audits at all U.S. tensile labs, increased resources devoted to compliance and revamping internal quality controls and quality audit processes.  However, the companies did not receive more significant mitigation credit, either in the penalty or the form of resolution, because the companies did not voluntarily self-disclose the full extent of their misconduct to the Department.


For more information about the SPI Plea Agreement and the SEI Deferred Prosecution Agreement, please see below:

Press Release
SPI Criminal Information
SEI Criminal Information
SEI Deferred Prosecution Agreement (DPA)


Victim Impact Statement:  If you would like to attend the plea hearing scheduled for May 13, 2019 and make a Victim Impact Statement in person, please contact the Victim Assistance Line at (888) 549-3945 or email us at VictimAssistance.fraud@usdoj.gov.

If you would like to submit a Victim Impact Statement (or a letter addressed to U.S. District Judge Liam O'Grady) you may do so by mailing the Victim Impact Statement below (or a letter to Judge O’Grady) to: Victim Witness Unit, U.S. Department of Justice, Criminal Division, Fraud Section, 10th & Constitution Avenue, NW, Bond Building, Room 4416, Washington, DC 20530. You also may submit the Victim Impact Statement via email at Victimassistance.fraud@usdoj.gov or by fax at: (202) 514-3708.

Victim Impact Statement (PDF)

The information on this website will be updated as new developments arise in the case. If you have any questions, please call the Victim Assistance Line toll-free at (888) 549-3945 or email us at VictimAssistance.fraud@usdoj.gov.


Presumption of Innocence: It is important to keep in mind that an Information contains allegations only, and that defendants are presumed innocent until proven guilty.  That presumption requires both the court and our office to take certain steps to ensure that justice is served.

Crime Victims’ Rights Act and Right to Retain Counsel: The Crime Victims’ Rights Act (18 U.S.C. § 3771) applies only to victims of the counts charged in federal court, and thus individuals may not be able to exercise all of these rights if the crime of which the individual is a victim was not charged. Section 377I(c)(2) of this Act requires that we advise you that you have the right to retain counsel. Although the statute specifically sets forth your right to seek advice of an attorney with regard to your rights under the statute, there is no requirement that you retain counsel. The Government may not recommend any specific counsel, nor can the government (or the court) pay for counsel to represent you. Government attorneys represent the United States.

If you elect to obtain counsel to represent your interests, please have your attorney notify this office in writing at: U.S. Department of Justice, Criminal Division, Fraud Section, 10th & Constitution Avenue, NW, Bond Building, 4th Floor, Washington, DC 20530, Attention: Victim Witness Unit; fax: (202) 514-3708; or email: VictimAssistance.fraud@usdoj.gov. If you elect not to retain counsel to represent your interests, you do not need to do anything.

Plea Agreements: Please be aware that many criminal cases are resolved by plea agreement between the Department of Justice and the defendant. If you want to inform the prosecutor of your views regarding the plea agreement, or any other aspect of the case, please call the Victim Assistance Line toll-free at (888) 549-3945 or email us at VictimAssistance.fraud@usdoj.gov, and we will put you in touch with the prosecutor.

 

Updated May 6, 2019

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