2 Men Accused of Selling Inferior Steel to Military
A father and son who operate an Orange County steel supply firm were indicted Tuesday by a federal grand jury in Los Angeles for allegedly selling to the Defense Department inferior steel that “potentially jeopardizes” the lives of military personnel.
Donald R. Bigalke, 53, president of District International Supply Co. of Costa Mesa, and his son, Timothy D. Bigalke, 30, the firm’s vice president, were each charged with 15 counts of mail fraud in connection with the sale of steel not treated with certain alloy additives as specified in defense contracts, U.S. Atty. Robert C. Bonner said.
Federal officials also filed a $1.1-million civil complaint against the two men and the firm to recover money and penalties because of alleged false claims submitted to the government.
In one instance, $76,000 in compensatory damages are being sought because metal supplied for use on a B-52 bomber failed heat treatment tests. The metal was never used on the aircraft.
The indictment alleges that the father and son defrauded the government by falsely saying that their steel conformed to specifications required by the defense contracts they signed with the government.
Those contracts called for either Type 321 or 347 steel, treated with certain alloy additives, such as titanium, columbium or tantalum, to make the metal more durable and able to withstand corrosion and heat stress.
But military tests allegedly showed that the steel supplied by the Bigalkes was not treated, Bonner said.
The indictment alleges that after obtaining the metal from a manufacturer or distributor, the Bigalkes changed the product certifications to make it appear that the steel they were supplying conformed to the quality specifications set down in the Defense Department contracts. Authorities were not clear on where it was manufactured.
No Lives Endangered
The high-quality steel that the government contracted for is suitable for use in aircraft exhaust manifolds, jet engine parts and fire walls.
Bonner and Assistant U.S. Atty. Manuel Medrano said they were unaware of any instances in which the steel supplied by the Costa Mesa firm actually endangered lives or caused damage to military aircraft or equipment.
“It potentially jeopardizes lives . . . because welded joints can fail catastrophically,” Medrano said.
“Illegal substitution of inferior and below-spec products is one type of defense-contractor fraud that will not be tolerated,” Bonner added.
Bonner said the Bigalkes fraudulently submitted 28 separate invoices--totaling at least $236,900--to the Defense Department for the steel, most of which was shipped in 1984.
District International Supply Company Inc., founded in 1976, did $3 million in sales last year with a staff of nine employees, including the Bigalkes, financial records show. The firm operates out of rented office space in the 1000 block of Brioso Drive in Costa Mesa.
Calls to the company’s offices late Tuesday went unanswered, as did those made to Donald Bigalke’s home in Garden Grove.
Timothy Bigalke, reached by phone at his home in Newport Beach, said: “I had no idea that it (the indictment) was coming and I don’t want to comment.”
Both defendants face a maximum sentence of 75 years in prison and a $15,000 fine if convicted of all charges, federal officials said.
