The owner of a steel company that falsely claimed safety tests were passed for parts used in the repair of a Mississippi River lock and dam has been sentenced to a year and a day in federal prison. U.S. District Judge Stephen R. Clark handed down the sentence on Thursday for Theodore J. “Ted” Stegeman, 60, of Industrial Steel Fabrication LLC (ISF).
Stegeman had already paid $238,059 in restitution, covering the costs of removing, testing, and re-installing cover plates, or flanges, that ISF had supplied to a U.S. Army Corps of Engineers contractor. The faulty parts were part of a project to repair Lock and Dam No. 25 near Winfield, Missouri.
As a subcontractor on the project, ISF was responsible for fabricating and welding cover plates for all 17 bridge spans. The plates were required to undergo ultrasonic testing to detect any defects in the welded joints. However, in October 2019, ISF delivered a flange that had failed the required test.
According to his plea agreement, Stegeman concealed the failed test by re-assigning employees who were aware of it and altering the ultrasonic testing report to falsely show that the flange had passed. He also instructed others to falsify test results for another flange that had not been tested at all.
Stegeman pleaded guilty in April to one felony count of wire fraud. At the sentencing, Judge Clark described Stegeman’s conduct as dangerous and noted that evidence showed Stegeman was aware of the risks created by his actions.
The case was investigated by the Defense Criminal Investigative Service and the Department of the Army Criminal Investigation Division. Assistant U.S. Attorney Kyle Bateman is prosecuting the case.
