IE Circular No. 79-08, Attempted Extortion - Low Enriched Uranium


                               May 17, 1979 

MEMORANDUM FOR:     B. H. Grier, Director, Region I 
                    J. P. O'Reilly, Director, Region II 
                    J. G. Keppler, Director, Region III 
                    K. V. Seyfrit, Director, Region IV 
                    R. H. Engelken, Director, Region V 

FROM:               E. Morris Howard, Director 
                    Division of Safeguards Inspection, IE 

                    ENRICHED URANIUM 

The subject document is transmitted for issuance on May 18, 1979 and is a 
follow-up to IE Information Notice No, 79-02. A summary of the GE Wilmington
event is attached. 

This circular should be issued to all fuel facilities and reactors licensed 
by NRC. Also, enclosed is a copy of the transmittal letter. 

No inspection follow-up is necessary since no action by the licensee is 

                                        E. Morris Howard, Director 
                                        Division of Safeguards Inspection 
                                        Office of Inspection and Enforcement

1.   IE Circular No. 79-08
       with attachments 
2.   Draft Transmittal Letter 

CONTACT: N. Ervin 

(Draft transmittal letter for IE Circular 79-08, to each operating reactor 
(power and nonpower) and fuel facility licensee.) 

                                                      IE Circular No. 79-08 


The enclosed IE Circular 79-08, is forwarded to you for information. If 
there are any questions related to the contents or intent of the Circular or 
its attachments, please contact this office. 


                                        (Regional Director) 

IE Circular No. 79-08

                              UNITED STATES 
                          WASHINGTON, D. C. 20555 

                               May 18, 1979 

                                                      IE Circular No. 79-08 



In January 1979, a temporary contractor employee who was working at the 
General Electric plant in Wilmington, North Carolina, allegedly entered the 
plant and removed a drum containing two 5-gallon cans of low enriched 
uranium from the facility with the intention of extorting money for the 
return of the material. The Federal Bureau of Investigation conducted an 
intensive investigation leading to the arrest of the employee on February 1, 
1979. All material was recovered and returned to the plant. 


Based on preliminary information provided the NRC, the theft was allegedly 
carried out in the following manner: 

     On Friday, January 26, 1979, the subject worked the day shift. At 10:50
     p.m. the same day he drove back to the plant and entered with the night
     shift. He showed his Florida driver's license at the entrance gate 
     instead of his yellow contractor badge because it had a blue background
     similar to that on the picture badge which he thought was required to 
     gain access to the area of the plant that he wanted to penetrate. He 
     had allegedly gained access using his driver's license on previous 

     Once inside the plants, the subject would have been guided by gates and
     fences into a parking area had it not been for the fact that one gate 
     had been removed to allow installation of truck scales. He proceeded 
     down the unprotected road to an area adjacent to the building he wanted 
     to enter. 
     After the subject entered the building through a personnel door, he 
     proceeded to his normal working station which was the Chem Tech Lab and
     entered, using his own key. In the lab he picked up his protective 
     clothing, a two wheel cart used to move 55 gallon drums and a container
     used to ship chemicals. The container could hold two 5-gallon cans. He 
     then proceeded to a door leading up a stairwell into the radiation 

IE Circular No. 79-08                                      May 18, 1979 
                                                           Page 2 of 2 

     controlled area. The door was normally locked even though not required 
     by regulations; however, at this time it was slightly ajar due to 
     malfunction of the locking mechanism. Once inside the door, the subject
     put on his protective clothing and proceeded up the stairs to the Blend
     Queue Area. He removed two 5-gallon cans of U02, carried them down the 
     stairs and put them in the shipping container. He then removed his 
     protective clothing and retraced his steps on to the Chem Tech Lab. 
     Once back in the lab he opened one can and removed some of the material 
     which he intended to use to effect his blackmail scheme. Using the 2 
     wheel cart, he transported the remaining material to his car and loaded 
     it in his trunk. He retraced his steps and left the plant just before 
     midnight on Friday, January 26. Procedures require anyone leaving the 
     plant after midnight to sign out. He had been in the plant 
     approximately one hour. He had come in with the incoming plant change 
     and had left with the outgoing shift. 

The G. E. Wilmington plant had an industrial security system in operation at
the time of the incident. This theft was facilitated by a failure of this 
system. The failure to check the subjects identification badge closely 
enough to distinguish a Florida driver's license from a General Electric 
badge authorizing access other than normal working hours and the failure to 
protect a disabled remotely operated gate which would have denied automobile 
access to the immediate area where material was stored were significant 
factors in the success of this theft. A third contributing factor was access 
to the material through an emergency exit which was normally closed and 
locked against access to the area where the material was stored. 

Although the circumstances surrounding the possible occurrence of an event 
similar to this will vary according to each licensee's operation and 
safeguards system, the attached summary of this event clearly demonstrates 
the interrelationships of minor problems that seem insignificant if taken 
alone, but when combined, can allow a loss to occur. It also emphasizes that
the possibility of an insider threat against a licensed facility does exist.

This Circular is issued for your information. 

No action is requested of you and no written response to this Circular is 
required. If you desire additional information regarding this matter, 
contact the Director of the appropriate NRC Regional Office. 

1.   Sanitized Summary of
       GE Wilmington Incident
2.   List of IE Circulars Issued
       in the Last Twelve Months.

             Sanitized Summary of G. E. Wilmington Incident 

I.   Summary 

     On Monday, January 29, 1979, at 11:45 a.m., Region II was notified by 
     telephone by the General Manager of the Wilmington, North Carolina, 
     General Electric Company plant, that an extortion letter and a sample 
     of UO2 powder were found at his office door when he came to work about 
     8:00 a.m. The letter stated that the writer had in his possession two 
     5-gallon containers of UO2 powder which he had taken from the plant. 
     The containers were identified in the letter by serial numbers and by 
     the gross weight (approximately 145 pounds total). The letter further 
     stated that enough UO2 had been removed from one of the containers to 
     furnish samples to newspaper editors, senators, anti-nuclear group 
     leaders and others if his demand for  $100,000 in cash was not met by 
     Thursday, February 1. The writer further stated that after the samples 
     had been delivered, if he had not received the money, one container of 
     UO2 powder from the second container would be dispersed through another 
     large city if an additional $100,000 in cash was not provided at that 
     The General Manager verified the authenticity of the container numbers 
     and the fact that the containers were not in their assigned locations. 

     Region II advised the Office of Inspection and Enforcement, NRC, 
     Headquarters, and the Atlanta office of the FBI. The Atlanta FBI turned
     the case over to the Charlotte, North Carolina FBI office. 

     The FBI assumed investigative jurisdiction on Monday, January 29. It 
     was decided not to send NRC investigators to the plant at that time, 
     but that the NRC would wait for further developments and concentrate on 
     planning and related safety evaluations. On Tuesday, January 30, two 
     Region II investigators, knowledgeable in accountability and health 
     physics, were sent to the plant to furnish technical expertise in the 
     areas of material control accountability and health physics, and to 
     review GE activities to determine how the event occurred, without 
     interfering with the FBI investigation. 

     A temporary employee of a General Electric Company subcontractor was 
     subsequently arrested by the FBI on 2/1/79. 

     The containers and all the SNM were recovered by the FBI and returned 
     to GE. 

                                                            Attachment 1 
                                                            Page 1 of 2 

IE Circular NO. 79-08                                         May 18, 1979 

II   Conclusions 

     The special inspection disclosed that: (a) the material control and 
     accountability system functioned as designed and identified the missing
     containers in accordance with regulatory requirements; (b) health 
     physics procedures were followed in accordance with regulatory 
     requirements; (c) normal industrial security procedures were followed; 
     and (d) no items of noncompliance with regulatory requirements were 

                                                            Attachment 1 
                                                            Page 2 of 2 


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