Shelton Layne Smith, Wire Fraud, Oregon 2024

SEATTLE – A former project manager at Portland, Oregon-based shipbuilder Vigor Marine LLC is facing federal charges after a grand jury indicted him on ten counts of wire fraud. Shelton Layne Smith, 50, of Portsmouth, Virginia, allegedly orchestrated a scheme to steal approximately $1.5 million from his employer, U.S. Attorney Brian T. Moran announced today.

The indictment details how Smith, while overseeing the renovation of U.S. Coast Guard cutters the “Bertholf” and the “Waesche” at Vigor’s Seattle facility in 2016 and 2017, fabricated invoices from a phantom company called “Marine Service Solutions” (MSS). As project manager, Smith was responsible for vendor selection and payment approvals. Instead of legitimate expenses, the invoices represented work never performed and equipment never delivered. Vigor Marine unknowingly shelled out $1.5 million based on these lies.

Smith didn’t just create the fake invoices – he built a complex network to hide the fraud. He strong-armed a legitimate Vigor vendor into acting as a “pass-through,” receiving the bogus MSS invoices, adding a markup, and forwarding the inflated costs to Vigor. Crucially, this vendor was completely unaware MSS was a fabrication. Smith also enlisted a long-time acquaintance in Mississippi, convincing him to open a bank account for MSS, cash the fraudulent checks, and funnel the majority of the proceeds directly to Smith. Emails reviewed by investigators reveal Smith even impersonated the Mississippi man, bolstering the illusion that MSS was a real entity.

The deception didn’t end with the money transfer. When confronted by the FBI, Smith allegedly doubled down on the lies, repeatedly denying any wrongdoing related to MSS and even urging his Mississippi accomplice to maintain the false narrative. This attempt to obstruct justice further complicates his legal predicament. The scheme unraveled in 2017 after Vigor terminated Smith for mishandling the Bertholf project, and his replacement discovered the fraudulent payments.

Vigor Marine promptly reported the crime to the FBI, triggering the investigation that led to Smith’s indictment. If convicted on the wire fraud charges, Smith faces a maximum sentence of 20 years in federal prison and a $250,000 fine. It’s important to remember these are allegations at this stage, and Smith is presumed innocent until proven guilty beyond a reasonable doubt.

The case is being investigated by the FBI and prosecuted by Assistant United States Attorney Seth Wilkinson. The Grimy Times will continue to follow this case as it develops, exposing the underbelly of white-collar crime and holding those responsible accountable. A copy of the indictment is available as s._smith_indictment.pdf.