tungsten

Tungsten Parts Wyoming’s building on Venture Drive in Laramie is seen here on a gloomy December afternoon.

Seven former employees of Tungsten Parts Wyoming, a manufacturer in West Laramie, have accused the company of misleading its customers into believing that all its products are made in the U.S. while actually selling them foreign-made products.

The company’s former CEO, general manager, and several engineers have also accused the company’s chairman, Joseph Sery, of knowingly violating the U.S. International Traffic in Arms Regulations, administered by the U.S. Department of State, despite the repeated protests from employees.

Sery told the Laramie Boomerang on Friday that he cannot comment on the specifics of the allegations because an ongoing FBI investigation against the plaintiffs.

That FBI investigation was apparently prompted by Sery himself after an exodus of top management this summer. The investigation is one reason that the plaintiffs now have sued Sery for defamation.

At an Oct. 15 state unemployment hearing, Sery apparently “testified under oath that he was aware of a federal investigation and that his lawyers were meeting with federal investigators that day … as part of an investigation into alleged illegalities at (Tungsten Parts Wyoming),” according to a lawsuit filed by the seven former employees. Sery will be required to file a response to the lawsuit’s allegations by Jan. 10.

Those employees filed a lawsuit this month against Sery and the company for wrongful termination, constructive termination, and defamation after Sery apparently told police and others that the employees had committed crimes.

Originally based in San Diego, Tungsten was recruited by the Wyoming Business Council to move to Laramie.

After substantial work by both local and state officials, Sery relocated the company to Laramie and began manufacturing here in 2017.

The state provided a $3 million grant for the construction of Tungsten’s building that was completed in 2016.

Tungsten’s website boasts that “all these jobs have been brought back from China.”

“The just proves how much the company takes pride in American workmanship, and how much it values goods that are ‘Made in the USA,’” the website says.

Tungsten’s clients include major aerospace and defense companies, including Lockheed Martin, BAE Systems, and Northrup Grumman.

The lawsuit claims that Joseph Sery’s brother, Dror, works as a consultant for Tungsten in violation of the Code of Federal Regulations’ partial ban “foreign individuals” handling technical data of military parts.

According to the lawsuit, Dror Sery is Israeli and does not have a green card.

Under federal regulations, Tungsten should have obtained a license from the State Department for Dror Sery for “each specific defense article, product or component before he can have access to drawings, prints, manufacturing processes or technical data related to each specific defense article, product or component,” the lawsuit states.

The technical data license required for Dror Sery also requires Tungsten’s customers to give permission for a foreign person to handle any defense article, product or component manufactured by the company, the lawsuit claims.

Initial concerns raised

Kyle Stickelman began working as Tungsten’s manufacturing technologist in December 2016, when he began writing computer programs to dictate the movement of the company’s tools as machinery while overseeing machine operators and designing protoypes.

That job involved reviewing military-related components, and Stickelman became concerned that Tungsten was violating federal regulations by giving Dror Sery access to the company’s Sharefile systems that store product information to defense articles subject to the International Traffic in Arms Regulations.

The lawsuit claims that on July 13, 2018, Dror Sery sent an email indicating that he would send a customer’s ITAR-controlled property to a company in China that manufactures balancing machines.

However, ITAR prohibits taking or releasing “defenses articles out of the United States in any manner” and the “transfer of technical data to a foreign person in the United State.”

In October 2018, Joseph Sery emailed several drawings from DSG Technology to Dror Sery that depicted a type of ammunition designed to travel well underwater.

Stickelman reported his concerns that the Serys’ actions were violating federal law and, according to the lawsuit, “whenever Mr. Stickelman asked Joseph Sery if Dror Sery possessed a Technical Data License for products that were subject to ITAR, Joseph Sery would assure Mr. Stickelman that everything had been taken care of.”

However, the lawsuit also claims that the person at the company tasked with overseeing compliance with ITAR, George Pazos, had no formal ITAR training before being given that responsibility in May 2016.

Eventually, Dror Sery was given an office at Tungsten in March 2019.

Made in the USA?

The lawsuit claims that, In the last two years, Tungsten purchased tungsten cubes, balls, and plates from Chinese companies that are part of the East Asian country’s “commercial or defense industrial base.”

Oscar Cruz, the company’s chief operating officer and Joseph Sery’s son-in-law, would “verbally instruct employees working at TPW to remove all labeling and markings from any packing of tungsten products that had arrived from China,” the lawsuit claims.

Afterwards, TPW would apparently sell those Chinese-made products to General Dynamics and other customers, “making it more difficult to trace the original source of the products.”

“The Plaintiffs were concerned that General Dynamics and other customers were not informed or aware that TPW was selling them foreign-made defense articles from China, rather than products that TPW represented were manufactured in the U.S.”

The lawsuit also questions the practice’s legality, noting a federal regulation that bans items on the United States Munitions List from being acquired from “any Communist Chinese military company.”

In late 2018, Tungsten used Chinese-made tungsten plates to fulfill a customer’s contract.

“Joseph Sery assured Plaintiffs (General Manager Phillip) Christiansen and (Process Engineer Manager Alonso) Martinez that it was legal to use said Chinese-made tungsten plates to fulfill the contract.”

The lawsuit states that Christiansen repeatedly spoke to Joseph Sery about the ITAR-related concerns regarding Dory Sery, but Joseph Sery would say that he “had permission for Dror Sery to have access to ITAR controlled information.”

“On another occasion, Plaintiff Christiansen was in a meeting with Joseph Sery when Sery telephoned a lawyer about ITAR questions,” the lawsuit states. “Plaintiff Christiansen could hear the lawyer disagreeing with Sery and Sery starting to argue with the lawyer. Sery then asked Christiansen to leave the room and told him later that he (Sery) had convinced the lawyer that he was correct.”

At an “all hands” meeting on May 1, 2019, however, Sery allegedly “acknowledged that he has known for a long time that Dror Sery needs a technical data license and ‘that was being worked on.’”

Daylen Vallejo, a quality assurance technician, said he was concerned in July that another ITAR violation had been committed when “he realized that plans, engineering drawings and specifications for a project on which he had been worked had been sent to China to have a prototype made.”

“At that point, Mr. Vallejo did not know who to trust or speak to about his concern regarding this possible ITAR violation,” the lawsuit states.

Substandard quality

Plaintiffs in the lawsuit described Tungsten’s working environment as “chaotic, characterized by a lack of document control and substandard, outdated equipment that had little capacity to manufacture the products ordered by TPW customers.” The ex-employees claim that they “found it difficult to perform their jobs because Joseph Sery routinely failed to provide them with information necessary to manufacture the products ordered by TPW customers.”

The employees claim they would often also receive conflicting instructions on how to manufacture products, and were also asked to create products that deviated from the customer’s contracts.

“Joseph Sery would later claim that the customer had approved the contract deviation, without providing any written evidence to support that claim,’” the lawsuit states.

The plaintiffs say the company’s substandard equipment created numerous additional problems.

The lawsuit says that “on several occasions,” Stickelman urged Sery to replace outdated or non-functioning equipment and was told to “make do.”

Martinez claims in the lawsuit that he was “tasked with making equipment from scratch and with repairing broken equipment or inexpensive equipment made in China.”

He alleges that equipment the company made for its own manufacturing purposes “could not perform the work for which it was designed.”

“Mr. Martinez spent more in time and materials making equipment from scratch and/or repairing equipment sent from (Tungsten Heavy Powder and Parts) than it would have cost to purchase the same equipment new,” the lawsuit states. “Contrary to its representations to the public that (it) has a ‘modern factory that combines cutting edge technology and equipment to produce high-quality tungsten parts,’ TPW’s manufacturing equipment was substandard or inoperable and had been procured because it was cheap,” the lawsuit claims.

As a result, the plaintiffs say the company was chronically unable to “fulfill contracts in a timely manner.”

While Pazos is not a party to the case, the lawsuit claims that when Pazos would raise ITAR concerns with Sery, the chairman would “threaten to fire Mr. Pazos and ensure that he would never work in a Department of Defense manufacturing facility again in his career.”

Dror Sery allegedly refused to follow ITAR rules, and Pazos’s attempts at compliance only “upset Joseph Sery.”

When Dennis Omanoff, a plaintiff, was hired as Tungsten’s Executive Vice President in April, Pazos asked to be stripped of ITAR responsibilities.

The company’s current CFO, Chris Witt, became the new ITAR official.

After being promoted to CEO on June 24, Omanoff was “constructively terminated” on July 10 and told Sery he would not allow the company to manufacture his patented rounds.

“Mr. Omanoff believed that if he continued to work at TPW, he would be required to engage in unethical and illegal activity,” the lawsuit states.

Patent theft?

Omanoff holds a patent for armor-piercing ammunition.

When he was first hired in April, his initial offer letter from TPW states that the company could “attempt to manufacture the patented armor-piercing rounds, with Omanoff collecting a five percent commission on the sales proceeds,” according to the lawsuit.

Various actions taken by Sery indicated to Omanoff that Sery was trying to find a way around the patent so he wouldn’t have to pay Omanoff.

The morning after Omanoff’s last day in June, Sery allegedly told TPW managers that the company would continue to manufacture Omanoff’s armor-piercing rounds.

“Plaintiff Christiansen stated that Mr. Omanoff held the patent to those AP rounds. Joseph Sery contended that no such patent existed,” the lawsuit states. “Plaintiff Christiansen informed Joseph Sery that there was a copy of the patent on TPW’s ShareFile system and that TPW should not produce a patented product without Plaintiff Omanoff’s permission. Joseph Sery responded that he could do what he wanted, with or without Omanoff’s permission.”

On July 26, Sery fired Stickelman via text message and said he would report the man to police “for stealing TPW property, specifically armor-piercing projectiles.”

Stickelman immediately called an employee at TPW to have him confirm that the armor-piercing projectiles Stickelman was accused of stealing were still “in the office area of the north plant, on the main desk in the back right corner,” the lawsuit states.

Jumping ship

Frustrated by Christiansen’s apparent “betrayal” after Omanoff’s depature, Sery asked a quality assurance technician, Kyle McCurley, to become general manager.

McCurley had graduated from the University of Wyoming with a bachelor’s degree in mechanical engineering in 2018. He began work at Tungsten in January.

“McCurley felt terrified of assuming that level of responsibility, given his lack of experience, but said he would accept the challenge,” the lawsuit states.

Christiansen was “constructively terminated” that afternoon.

At a meeting a week later, Pazos again raised ITAR concerns and recorded a meeting called by the company’s new CEO, J.P. Batache.

When Batache noted that Pazos was recording, he had the man escorted out of the meeting.

After that meeting, another engineer quit for fear that “if he continued to work at TPW, he would be required to participate in illegal activity.”

That engineer, Timothy McMaster, claims in the lawsuit that after quit, he received a text message from an employee still at TPW who said that Sery is “‘under investigation by the FBI’ because he was allowing his brother inside an ITAR facility, Mr. Batache was prohibiting Dror Sery from coming to the TPW facility, and that the ‘whole made in America thing is a lie.’”

Employees take action

TPW is co-owned by Sery and Russell Lewis.

On July 21, McCurley emailed Lewis to alert him of the “legal and ethical concerns McCurley had about TPW’s business practices.” That same day, Stickelman emailed Lewis about his concerns with the company’s manufacturing equipment.

Two days later, Sery reportedly fired Pazos via text message and accused McCurley “of attempting to disrupt production.”

Sery also said he “had fired George Pazos because Pazos was a criminal and he was going to report Pazos to law enforcement” and told McCurley that “he was going to fire Plaintiff Stickelman for inciting a mutiny.”

McCurley was “constructively terminated” after being told he had the choice to “step down from being general manager or resign,” the lawsuit states.

Vallejo was “constructively terminated” on July 25 after believing that “if he continued to work at TPW, he would be required to engage in illegal activity.”

When Alonso Martinez, a process engineer, met with Batache and Eric Nyberg, TPW’s Quality and Technology Development manager, on Aug. 6 to discuss his concerns about ITAR violations.

Afterwards, Batache emailed Dory Sery and Joseph Sery to describe one of Martinez’s concerns: that “Dror Sery may have revealed proprietary information about TPW product formulas to the vendor of a vacuum furnace.”

In response, Joseph Sery sent an email that said “unless this stops immediately I’ll have to take a more serious approach.”

“This is the last time the word ITAR appears on an email when it concerns me or Dror,” Sery wrote in his Aug. 6 email. “If anyone has an issue with this just let me know now!!!!.”

On Aug. 12, police officers, including an FBI agent, arrived at Martinez’s home and took his TPW-issued laptop and hard drives.

“The officers were aggressive and threatening and claimed that Mr. Martinez had improperly downloaded TPW files to his personal computer,” the lawsuit states. “They also said he had destroyed TPW property.”

On Sept. 1, law enforcement officials arrived at Stickelman’s residence and questioned him about Martinez and events at TPW. Those officers said that Sery had accused Stickelman and other former employees of disposing of company property.

The same day, officers arrived at McCurley’s residence and question him about Martinez, ITAR violations and “if Mr. Martinez had sent anything to Mr. McCurley.”

Defamation

The lawsuit claims that Sery or other TPW supervisors falsely claimed Martinez was on the run from the FBI, had stolen TPW files and destroyed company property.

The lawsuit accuses Sery of defamation for having apparently told “one or more persons that Plaintiffs McCurley and Stickelman had stolen or destroyed TPW company property.”

Sery also apparently told a program manager at Northrop Grumman that he fired Omanoff because he had “created a mutiny inside the company” and that Pazos had “committed a crime.”

The lawsuit accuses Sery of wrongfully terminating Martinez and Stickelman while causing the “constructive termination” of McMaster, McCurley, Vallejo, Christiansen and Omanoff by “creating intolerable working conditions that were so unusually adverse that reasonable employees in their position would have felt compelled to resign.”

The lawsuit also accuses Sery of defaming Martinez, Stickelman, McCurley and Omanoff.

Growth in Laramie

This year, Tungsten purchased its building from the city — six years earlier than expected.

At the time, Laramie Chamber Business Alliance President Brad Enzi praised the company’s growth.

“To see somebody come and then exceed the timeline they thought they would grow is a real testament to how hard they’re working and is a great statement about the things that are going on in our economy here,” Enzi said.

Sery also said at that time that he was struggling to find suitable upper-level management, especially in the more technical positions like quality control.

The issue was such a serious one that Sery said told the Laramie Boomerang in September that he’s not comfortable recommending Laramie to other manufacturers interested in coming here.

When Sery first was moving the business to Laramie, he boasted that the company was moving its factories stateside from China.

In 2015, he told the Laramie Boomerang that he misspoke.

“I used a figure of speech,” Sery said. “We never had factories in China.”

At the time the state issued a $3 million grant for Tungsten’s building, the funding was praised by many local officials.

Then-Gov. Matt Mead said the grant was a message that “Wyoming is open for business.”

Then-Wyoming Senate President Phil Nicholas, R-Laramie, expressed skepticism about the Wyoming Business Council paying for such buildings.

Such government-backed construction “because (Laramie) is hungry for a local business to get a new building” was “maybe not what we should be looking at,” Nicholas said at the time.

Editor’s note: The plaintiffs are being represented by Laramie attorney Megan Hayes and Cheyenne attorney Bruce Moats. Moats is also currently representing the Laramie Boomerang in a legal review of the University of Wyoming’s denial of several public records requests.

(3) comments

Trumped

This is why the our state government should stay out of business. Of course they can't attract talent, talent doesn't work for corrupt businesses.

TheReplacement

The same applies for city government.

Brett Glass

It seems that it is always the companies which engage in questionable or illegal business practices which are the first to jump at the chance to feed at the government trough. This shows the wisdom of the Wyoming Constitution's provision against appropriating money to private parties - and the dangers of attempting to bypass it (e.g. via the Wyoming Business Council and the ill-advised "economic development" exception, which should be repealed).

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