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Press Release

Former Shipbuilding Project Manager Indicted for Fraud in $1.5 Million False Invoice Scheme

For Immediate Release
U.S. Attorney's Office, Western District of Washington
Defendant Falsified Invoices from Phony Company and Misled Business Contacts to Steal from Employer

          A former project manager for Portland, Oregon-based shipbuilder Vigor Marine LLC, was indicted today by a federal grand jury in Seattle for ten counts of wire fraud related to his scheme to defraud his employer out of approximately $1.5 million, announced U.S. Attorney Brian T. Moran.  SHELTON LAYNE SMITH, 50, of Portsmouth Virginia, is expected to be arraigned on the indictment in U.S. District Court in Seattle in the next two weeks.

            According to the indictment, in 2016 and 2017, SMITH served as the project manager on the renovation of two U.S. Coast Guard cutters called the “Bertholf” and the “Waesche.”  The renovations took place at Vigor’s Seattle facility. SMITH was responsible for selecting vendors and approving payments to them for equipment and services related to the renovations.  The indictment alleges that, in this role, SMITH fabricated invoices from a fictitious company called “Marine Service Solutions” (MSS).  The fraudulent invoices caused Vigor to pay out approximately $1.5 million for work that was never done and equipment that was never provided.  The indictment alleges that SMITH used the fraud proceeds for his own purposes, including to finance his gambling activities. 

            SMITH’s scheme to defraud was an elaborate charade.  SMITH persuaded a legitimate Vigor vendor to serve as a “pass-through” entity that received invoices from MSS, marked up the cost of the services, and passed on the fraudulent expenses to Vigor.  The local vendor was not aware that Marine Service Solutions was not a real company.  SMITH also misled a long-time acquaintance in Mississippi into setting up a bank account for MSS, cashing the checks, and funneling most of the proceeds to SMITH.  In emails, SMITH posed as the Mississippi man, making it appear as if the Mississippi man was the owner of MSS. 

           The indictment also alleges that, when questioned by the FBI, SMITH repeatedly lied about MSS and encouraged his acquaintance in Mississippi to stick to a false story about the company.

            Vigor terminated SMITH in 2017 after discovering that SMITH had mishandled the Bertholf project.  SMITH’s successor discovered the fraud, and Vigor reported the crime to the FBI. 

            Wire fraud is punishable by up to 20 years in prison and a $250,000 fine.  The charges contained in the indictment are only allegations.  A person is presumed innocent unless and until he or she is proven guilty beyond a reasonable doubt in a court of law.

            The case is being investigated by the FBI.  The case is being prosecuted by Assistant United States Attorney Seth Wilkinson.


Press contact for the U.S. Attorney’s Office is Communications Director Emily Langlie at (206) 553-4110 or

Updated June 6, 2019

Financial Fraud