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Press Release

Former Naval Engineer Charged with Unlawful Disclosure

For Immediate Release
U.S. Attorney's Office, Eastern District of Pennsylvania

PHILADELPHIA – United States Attorney Jacqueline C. Romero announced that Nicole K. Schuster, 32, of Revere, Massachusetts was charged by Information with disclosing contractor bid, proposal, and source information. Schuster was a mechanical engineer and “project lead” employed by the United States Department of the Navy (“the Navy”) at the Naval Foundry and Propeller Center in Philadelphia, Pennsylvania (the “NFPC”).

According to the Information, in or about early 2019, Schuster began working as the project lead on a solicitation for a procurement contract for a submarine propeller-making machine known as a VTC. During the contracting and bidding process, Schuster favored one company, identified in the information as “Company 1,” over other competing companies. Schuster urged her superiors to make the contract for this VTC a “sole source” contract for Company 1. That is, she requested that the contracting process should be established in a manner that would ensure that Company 1 would be awarded the procurement contract. The NFPC and Defense Logistics Agency agreed to favor Company 1 in this process but did not agree to prevent other companies from pursuing the contract. Rather, they established a process that allowed other contractors to submit information and compete for the contract. 

The information further alleges that on or about September 14, 2019, Schuster sent a WhatsApp message to a representative of Company 1 expressing her “loyalty” to Company 1 and attaching to the message Company 2’s confidential and proprietary contractor bid, proposal, and source selection information for its VTC. The documents that Schuster provided to this representative of Company 1 were marked “SOURCE SELECTION INFORMATION,” “OFFICIAL USE ONLY,” and “[Company 2] Proprietary information.” The documents included cost and pricing data and proprietary information about manufacturing processes and techniques. This disclosure gave Company 1 a competitive advantage over Company 2 and other companies seeking to obtain the VTC contract.  

On or about April 28, 2020, the procurement contract for the VTC was awarded to Company 1 for a total price of $15,254,608.

The case was investigated by the Department of Defense, Office of Inspector General, Defense Criminal Investigative Service and the U.S. Naval Criminal Investigative Service, Economic Crimes Field Office, and is being prosecuted by Assistant United States Attorney Louis D. Lappen.

An indictment, information, or criminal complaint is an accusation. A defendant is presumed innocent unless and until proven guilty.

Updated September 15, 2023