Former Production Manager at Portland Manufacturing Company Charged for Role in Product Certification Fraud Scheme Involving NASA and the Missile Defense Agency
A former production manager at an aluminum extrusion manufacturer was charged in an indictment filed April 18, for his alleged participation in a decade-long fraud scheme involving the fraudulent certification of mechanical properties for parts manufactured by his former employer.
Acting Assistant Attorney General John P. Cronan of the Justice Department’s Criminal Division, Executive Officer Renee Juhans of the National Aeronautics and Space Administration’s (NASA) Office of Inspector General (OIG), Special Agent in Charge Loren “Renn” Cannon of the FBI’s Portland Field Office, Special Agent in Charge Chris Hendrickson of the Defense Criminal Investigative Service’s (DCIS) Western Field Office, and Special Agent in Charge John Khin of DCIS’s Southeast Field Office made the announcement.
Dennis Merkel, 71, of Portland, Oregon, was charged in an indictment filed in the District of Oregon with two counts of major fraud against the government. Merkel is scheduled to be arraigned on April 30, before U.S. District Judge Marco A. Hernández of the District of Oregon.
The indictment alleges that between May 1996 and December 2006, Merkel, as a production manager at a Portland-area aluminum extrusion manufacturing facility, carried out a scheme to falsify tensile test results on hundreds of occasions, which were typed onto test certificates provided to the manufacturing facility’s customers. Aluminum extrusions are manufactured for a variety of applications, including aeronautic uses such as rockets and military hardware. There are industry-set specifications for measuring the mechanical properties of extrusions, which are determined by conducting a tensile test. Merkel allegedly sent and caused to be sent testing certifications containing falsified mechanical properties test results in connection with government contracts for NASA and the Missile Defense Agency. The indictment alleges that Merkel and others carried out the scheme to conceal failing tensile test results, increase profits and productivity, and obtain bonuses, which were calculated in part based on a production metric.
An indictment is merely an allegation and the defendant is presumed innocent until proven guilty beyond a reasonable doubt in a court of law.
This case was investigated by the NASA OIG, the FBI’s Portland Field Office and DCIS. The case is being prosecuted by Trial Attorneys Jennifer G. Ballantyne and Emily C. Scruggs of the Criminal Division’s Fraud Section.