ST. LOUIS – In a brazen scam, Theodore J. “Ted” Stegeman, 60, owner and CEO of Industrial Steel Fabrication LLC (ISF), admitted to committing wire fraud, netting his company $238,059 in a Mississippi River Lock and Dam repair project.
Stegeman, who pleaded guilty in U.S. District Court in St. Louis, devised a scheme to defraud the contractor and the U.S. Army Corps of Engineers by falsely claiming that a part manufactured by his company passed safety tests. The flanges, which Stegeman’s company fabricated and welded for all 17 bridge spans on Lock and Dam No. 25 near Winfield, Missouri, were supposed to undergo ultrasonic tests to identify any defects in the welded joints.
The government believes these flanges are critical, load-bearing components, and if a span weld cracks, there is a possibility the bridge and dam could fail, leading to possible fatalities and major damage to a large crane weighing up to 220,000 pounds that traverses the dam. Stegeman’s position, according to the plea agreement, is that the flanges are not “fracture critical components.”
In October 2019, Stegeman’s company delivered a flange for bridge span #10 that had failed an ultrasonic test. To conceal the failed test, Stegeman re-assigned ISF employees who knew about the failed test. He then altered the ultrasonic testing report to make it appear as if that flange had passed. ISF also supplied a flange for bridge span #12 that had not been tested, and Stegeman told others to falsify a test to make it appear as if the part had passed.
The contractor installed the flanges on bridge span #10 in October and November of 2019 and the upstream bottom flange on span #12 in December of 2019. Stegeman’s crime caused a total loss of $238,059, representing the cost of removing, testing and re-installing flanges. He has agreed to repay that money.
Stegeman is scheduled to be sentenced on September 12. Wire fraud is punishable by up to 20 years in prison, a $250,000 fine or both prison and a fine. The Defense Criminal Investigative Service and the Department of the Army Criminal Investigation Division investigated the case, with Assistant U.S. Attorney Kyle Bateman prosecuting the case.
Related Federal Cases
- KC Drug Kingpin Shawn Burkhalter Jailed for Life in Murder Scheme · Mississippi
- Steel Exec Admits Falsifying Lock & Dam Repairs · Mississippi
- FDIC Appoints Five New Members to Advisory Committee on Community Banking · Mississippi
- Mississippi Entrepreneur Indicted for $1.2M Bank Fraud Scheme · Mississippi
- Visa & Marriage Scam: 12 Plead Guilty in MS · Mississippi
Key Facts
- State: Missouri
- Agency: DOJ USAO
- Category: White Collar Crime|Fraud & Financial Crimes
- Source: Official Source ↗
🔒 Get the grimiest stories delivered weekly. Subscribe free →
Browse More
