Granite Falls Steel Fabricator Sentenced for Providing False Documents to Sound Transit Company Lied About Strength of Steel Used as Casing for Light Rail Columns

DAVID APPLEBY, 52, the President of Appleby NW, Inc., a steel fabrication company located in Granite Falls, Washington, was sentenced today in U.S. District Court in Seattle to one year of probation, a $20,000 fine, and $30,523 in restitution for Making and Using False Documents in relation to his work on the Sound Transit light rail project. APPLEBY pleaded guilty March 19, 2009. At sentencing U.S. District Judge John C. Coughenour said, “There is a major price that is paid when you plead guilty to a federal felony.”

According to records filed in the case, Appleby NW, Inc. was a subcontractor working on the light rail project. Appleby NW, Inc. successfully bid to fabricate steel casings for the footings for the four mile elevated portion of the light rail line in Tukwila, Washington. The casings are large metal tubes, ten or twelve feet in diameter that encase the concrete pilings just below the ground surface. According to the specifications, the casings were supposed to be manufactured from M270 Grade 50 steel. Grade 50 steel is defined as having a minimum yield strength of 50,000 pounds per square inch. DAVID APPLEBY purchased steel plates from Oregon Steel Mills, Inc. to fabricate into the casings. After the first batch of steel plates was ordered, DAVID APPLEBY was aware the steel did not meet the contract specifications. When DAVID APPLEBY placed a second order for steel plates in October 2005, he purchased Grade 36 steel, which had a minimum yield strength of 36,000 pounds per square inch.

Oregon Steel Mills provided DAVID APPLEBY and Appleby NW, Inc. with a Report of Chemical/Physical Tests for the steel plates it supplied. These reports stated that the steel was Grade 36 steel. DAVID APPLEBY then altered these reports and provided the falsified reports to Sound Transit. The falsified reports made it appear that Appleby NW, Inc. had fabricated the casings out of Grade 50 steel, when in fact casings had been fabricated out of Grade 36 steel. Between May 2005 and November 2006, APPLEBY falsified 36 reports and provided them to Sound Transit. The reports were subsequently provided to the Federal Transit Administration (FTA) which provides funding for Sound Transit.

Appleby NW, Inc. supplied more than 150 casings to the light rail project, the majority of which did not meet the contract standards. Both Sound Transit and the Federal Transit Administration asked experts to evaluate the use of the lesser grade steel. The studies concluded there is no safety issue.

Prosecutors argued that a significant fine of $150,000 would punish APPLEBY and deter others from similar conduct saying he should have notified Sound Transit of the steel problem immediately. “Instead, the defendant wrongly assumed that if he told the truth, this would unnecessarily delay the light rail construction. The defendant believed that the resulting economic fallout from such a delay outweighed the need to be truthful. The best way to punish the defendant for this serious offense and to deter others is to impose a significant financial sanction,” Assistant United States Attorney Carl Blackstone wrote in his sentencing memo. Judge Coughenour imposed a fine of $20,000.

The case was investigated by the FBI and the Department of Transportation Office of Inspector General (DOT-OIG).

The case was prosecuted by Assistant United States Attorney Carl Blackstone.

For additional information please contact Emily Langlie, Public Affairs Officer for the United States Attorney’s Office, at (206) 553-4110.