Information Notice No. 89-56, Supplement 2: Questionable Certification of Material Supplied to the Defense Department by Nuclear Suppliers
NUCLEAR REGULATORY COMMISSION
OFFICE OF NUCLEAR REACTOR REGULATION
WASHINGTON, D.C. 20555
July 19, 1991
Information Notice No. 89-56, SUPPLEMENT 2: QUESTIONABLE CERTIFICATION
OF MATERIAL SUPPLIED TO THE
DEFENSE DEPARTMENT BY
All holders of operating licenses or construction permits for nuclear power
This information notice supplement is intended to alert addressees of
additional information concerning a problem with the certification of
material furnished by the Meredith Corporation, Pressure Vessel Nuclear
(PVN), of Hillside, New Jersey, discussed in U.S. Nuclear Regulatory
Commission (NRC) Information Notice (IN) 89-56 and IN 89-56, Supplement 1.
It is expected that recipients will review the information for applicability
to their facilities and consider actions, as appropriate, to avoid similar
problems. However, suggestions contained in this information notice do not
constitute NRC requirements; therefore, no specific action or written
response is required.
Description of Circumstances:
In NRC IN 89-56, the staff discussed a 27-count indictment rendered on
May 4, 1989, by a Newark Federal Grand Jury charging PVN and Alloy & Carbon
Steel Company Incorporated (Alloy) corporate officers with substituting
commercial-grade steel for military-grade steel and fraudulently documenting
the substitutions as meeting military specifications. The notice indicated
that the NRC was interested in obtaining information relevant to material
supplied to nuclear utilities or vendors by PVN or Alloy in which
discrepancies have been found. The NRC is aware that a number of
organizations have independently tested PVN material. Some of the results
of that testing were made available in NRC IN 89-56, Supplement 1. The
following discussion provides additional information that has been made
available to the NRC.
In January 1991, William Lanza, President of PVN, pleaded guilty before U.S.
District Court Judge Harold A. Ackerman in Newark, New Jersey, to charges
IN 89-56, Supplement 2
July 19, 1991
Page 2 of 3
of conspiracy, mail fraud, and making false statements on test reports in
connection with supplying steel to contractors working for the United States
Navy. Lanza admitted to charges of Federal conspiracy in connection with
the making of false statements on test reports for material supplied to the
Navy by PVN. Lanza also admitted to providing false and incomplete
documents to the U.S. Naval Investigative Service in response to a subpoena
issued by the Department of Defense. He was sentenced to 30 months in
prison, 3 years probation and fined $20,599. PVN was ordered to make
restitution of $25,800.
In August 1990, a guilty plea was entered by Dean Lanza of PVN. In
December 1990, guilty pleas were entered by Hamilton Vazquez of PVN and
Louis Mikosh and Thomas Syms of Alloy. Dean Lanza was sentenced to 9 months
in prison, 2 years probation, and fined $10,000. Hamilton Vazquez was
sentenced to 3 years probation and fined $5,050. Louis Mikosh was sentenced
to 20 months in prison, 3 years probation, and fined $20,599. Thomas Syms
was sentenced to 4 months in a halfway house, 5 years probation, and fined
$10,000. Alloy was ordered to make restitution of $25,800.
Attachment 1 contains copies of the press releases which were issued by the
U.S. Department of Justice for the District of New Jersey.
The NRC has reviewed 1073 separate records on PVN material representing 504
different heats provided by 41 primary manufacturers and supplied to
23 organizations indicating a commercial nuclear end use. Forty-eight
records contained one or more property values which failed to meet the
specification requirements which covered 29 heats of material and
represented 5 percent of the total records. Except for those previously
reported in IN 89-56, Supplement 1, the nonconformances appear to represent
minor deviations from the specifications. PVN appears to have made a
practice of altering the documents which they obtained from manufacturers.
Such changes, when coupled with nonconforming tests of PVN material
performed by utilities, suggest that the authenticity of data on PVN
Certified Material Test Reports (CMTRs) may be questionable.
Recipients of this information may wish to evaluate PVN-supplied material to
determine if it is suitable for applications that are important to safety.
Addressees also may wish to consider this recent additional information in
planning their activities relative to the validity of the certification of
materials supplied by PVN. The NRC remains particularly interested in
receiving additional results from independent verification testing of
material supplied by PVN.
IN 89-56, Supplement 2
July 19, 1991
Page 3 of 3
This information notice requires no specific action or written response. If
you have any questions about the information in this notice, please contact
the technical contacts listed below or the appropriate NRR project manager.
Charles E. Rossi, Director
Division of Operational Events Assessment
Office of Nuclear Reactor Regulation
Technical Contacts: Ramon Cilimberg, NRR
U. Potapovs, NRR
1. Press Releases
2. List of Recently Issued NRC Information Notices
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