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Japan, Texas Firms Accused of Fraud

June 29, 1989|From Associated Press

FT. WORTH — A Japanese manufacturer and Texas supplier were indicted Wednesday on charges of fraud, accused of supplying substandard nuts and bolts to the Defense Department and a nuclear power plant.

Officials said the fasteners were used in civilian trucks, military vehicles and at the Comanche Peak nuclear power plant in Glen Rose, Tex. But they said they do not know how many substandard parts were used, where they were used or how many were brought into the country.

Government tests found that the bolts were weaker than their labeling indicated and could break under stress, said Charles Harrison, assistant special agent in charge of U.S. Customs in Houston.

"It's like if someone orders a Cadillac and you slap a Cadillac emblem on a Chevrolet and sell it as a Cadillac," said Jim Flick, agent in charge of the Defense Criminal Investigative Service in the Ft. Worth branch of the Inspector General's office.

Officials learned about the substandard fasteners 2 1/2 years ago after a tip.

Harrison said there were no reports of injuries resulting from failure of substandard nuts and bolts, although some of the parts were shipped to a Peterbilt Motors Co. plant in Denton, Tex., and caused minor accidents after being installed in tractor-trailer rigs.

Brooks Griffin, senior investigator with the Nuclear Regulatory Commission regional office in Arlington, said several substandard bolts had to be replaced in the nuclear power plant's residual heat removal system, which helps cool the reactor core.

Griffin declined to speculate what would have happened had the plant begun operations with the substandard parts, but he said it would have been unsafe.

The indictment names Yamaguchi-Seisakusha Co. of Shizuoka, Japan; Aircom Fasteners Inc. of Arlington, Tex., and 11 employees of the two companies.

Five employees of the Japanese company could each face $3 million in fines and 78 years' imprisonment if convicted. Harrison said the United States will seek their extradition. Six Aircom employees could face fines ranging from $750,000 to $6.2 million and prison sentences of 15 to 143 years.

If convicted, Yamaguchi-Seisakusho faces fines of $3 million on counts of fraud, mail fraud and entry into the United States of falsely labeled goods, Collins said. Aircom faces fines of up to $6.2 million on numerous fraud counts.

Charles Blau, attorney for Aircom president Gerald L. Dunsmore, said Dunsmore and the company are innocent.

Dunsmore and four other Aircom employees made preliminary court appearances Wednesday.

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