Information Notice No. 90-57 Supplement 1:Substandard, Refurbished Potter & Brumfield Relays Represented As New

                               UNITED STATES 
                        NUCLEAR REGULATORY COMMISSION
                    OFFICE OF NUCLEAR REACTOR REGULATION
                           WASHINGTON, D.C. 20555

                              November 27, 1991


NRC INFORMATION NOTICE 90-57, SUPPLEMENT 1:  SUBSTANDARD, REFURBISHED POTTER 
                                             & BRUMFIELD RELAYS REPRESENTED 
                                             AS NEW


Addressees

All holders of operating licenses or construction permits for nuclear power 
reactors.

Purpose

The U.S. Nuclear Regulatory Commission (NRC) is issuing this information 
notice (IN) supplement to inform addressees of the final disposition of a 
case of wrongdoing that the NRC referred to the Naval Investigative Service 
(NIS) and the Department of Justice.  This supplement is also intended to 
remind addressees and their suppliers, as well as their individual 
employees, that they can be subject to criminal prosecution and penalties if 
they intentionally violate NRC regulatory requirements or other Federal 
criminal laws.  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 supplement are not NRC requirements; therefore, no 
specific action or written response is required.

Description of Circumstances

In NRC IN 90-57, the staff alerted addressees that Stokley Enterprises, 
Incorporated (Stokley Enterprises), of Norfolk, Virginia, modified and/or 
refurbished 22 rotary, non-latching MDR-type Potter & Brumfield (P&B) relays 
and supplied them to the Shearon Harris Nuclear Power Plant.  P&B, 
Princeton, Indiana, originally manufactured these relays.  In addition, the 
NRC determined that Stokley Enterprises also provided similar relays to the 
U.S. Department of Defense (DOD) for use on nuclear powered submarines and 
notified the NIS.  The NRC and the NIS conducted additional investigations 
of Mr. William M. Stokley and Stokley Enterprises and provided the results 
to the U.S. Department of Justice for appropriate action.  

The U.S. Attorney for the Eastern District of Virginia, based on the results 
of the investigations conducted by the NRC and NIS, charged Mr. William M. 
Stokley, President of Stokley Enterprises, with selling counterfeit 
electronic parts to DOD and the Shearon Harris Nuclear Power Plant.  The 
indictment charged that, from about August 1985 to September 13, 1990, under 
the direction of Mr. William M. Stokley, employees of Stokley Enterprises 
built or assembled some of the parts with surplus electrical or used 
components, painting and cleaning some products to make them appear new.  
Mr. Stokley directed his employees to attach counterfeit nameplates to each 
part as it was completed to 

9111210087 
.

                                                  IN 90-57, Supplement 1 
                                                  November 27, 1991 
                                                  Page 2 of 2 


make the parts appear to be from established and recognized companies such 
as Cutler and Hammer, General Electric Company, or the Westinghouse Electric 
Company.  All the established companies, except Potter & Brumfield, had 
properly registered their trademarks for these products on the principal 
register of the U.S. Patent and Trademark Office in Washington, D.C.  The 
counterfeit nameplates used by Stokley Enterprises contained marks that were 
identical with or substantially indistinguishable from the genuine 
trademarks that had been registered in the U.S. Patent and Trademark Office.  

On July 24, 1991, William Stokley pled guilty to one count of conspiracy to 
traffic in counterfeit goods and Stokley Enterprises, Inc. pled guilty to 
one count of conspiracy to traffic in counterfeit goods and two counts of 
trafficking in counterfeit goods.

By a judgement dated October 4, 1991, Mr. Stokley was sentenced to two years 
in prison, and upon release from prison, he is to be on supervised release 
for a term of three years.  Mr. Stokley was sentenced to pay a fine of 
$7,500 and ordered to make restitution to the U.S. Government in the sum of 
$350,000.  His company, Stokley Enterprises, Incorporated, was sentenced to 
pay a fine of $30,000 ($10,000 for each count) and ordered to pay 
restitution in the sum of $2,501,000, less the sum of restitution 
contributed by Mr. Stokley himself.     
     
Discussion

All persons involved in NRC-regulated activities (including suppliers and 
vendors) have a responsibility to comply with applicable NRC regulatory 
requirements and Federal law.  The NRC expects and demands compliance and 
will seek criminal prosecution of wrongdoing in cases of intentional or 
willful violations of these requirements.  As evidenced by the case 
described in this information notice supplement, criminal sanctions may 
include a fine and/or imprisonment.

Addressees may wish to distribute copies of this information notice 
supplement to their employees and suppliers.

This information notice supplement requires no specific action or written 
response.  If you have any questions about the information in this 
supplement, please contact the technical contact listed below or the 
appropriate Office of Nuclear Reactor Regulation (NRR) project manager.



                                  Charles E. Rossi, Director
                                  Division of Operational Events Assessment
                                  Office of Nuclear Reactor Regulation


Technical contact:  Kamal R. Naidu, NRR
                    (301) 492-0980

Attachment:  List of Recently Issued NRC Information Notices
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