Not Guilty Verdict for Former Sapa Extrusions Employee

March 28th, 2019 by Jordan Scott

Dennis Merkel, a former production manager for Sapa Extrusions* in Portland, Ore., was recently found not guilty of two charges of fraud against the U.S. government, in a scheme to falsify tensile test results of aluminum extrusions between 1996 and 2006. Merkel was charged in April 2018.

Depending on the particular customer that ordered aluminum extrusions from the company, the company generally certified that its products met a variety of ASTM or AMS specifications. Those included ASTM or AMS specifications for three mechanical properties: yield strength, ultimate tensile strength, and elongation,” reads the indictment.

In July 2017, Dennis Balius, a former supervisor at Sapa Extrusions, pleaded guilty to the fraudulent certification of mechanical properties for parts manufactured by his former employer.

According to the U.S. Department of Justice, Balius admitted that as a lab supervisor at the company’s aluminum extrusion manufacturing facility from 2003 to 2015, he routinely trained and directed lab technicians to falsify mechanical property test results for extrusions that failed to meet industry specifications.

Balius also admitted that he made, or directed lab technicians to make, alterations to failing test results if the shipping department asked him to rush an order because ensuring on-time delivery of aluminum helped him and other employees receive bonuses,” reads the release.

The case was being investigated by the NASA Office of Inspector General. According to Oregon Live, NASA and the U.S. Missile Defense Agency awarded Sapa contracts to provide aluminum extrusions for rockets. Balius’ defense lawyer argued that the case was driven by a company culture to get the metal out. Sapa paid out at least $2 million as refunds to impacted customers concerned about the reliability of the products.

Sapa determined that Balius and the lab technicians altered the mechanical properties of the aluminum extrusions more than 4,000 times, allowing the company to gross more than $6.8 million in total sales based on altered test results.

In August 2018, Balius was sentenced to 37 months in prison, followed by two years of supervised release. He was also ordered to pay $170,825 in restitution.

Sapa was acquired by Hydro in July 2017. Hydro had not responded to a request for comment as of press time.

*Editor’s Note: The Department of Justice release and indictments do not name Balius or Merkel’s former employer outright. Sapa Extrusions was determined to be the employer based upon the locations of the aluminum extrusion manufacturer’s facilities and reporting from Oregon Live.

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