Two Carson Helicopter Inc. officials were indicted Monday on federal charges of conspiring to defraud the U.S. Forest Service by falsifying information about the weight, balance and performance of firefighting helicopters, including one that crashed in August 2008, killing nine people, seven of them Southern Oregon firefighters.
The allegedly false information was provided so the Merlin-based helicopter company could get $20 million in contracts, the U.S. Department of Justice claimed in a news release Monday.
The information also was used by pilots, thereby endangering the safety of the helicopters in flight, it said.
A Carson Sikorsky S-61N helicopter crashed Aug. 5, 2008, while fighting the Iron 44 fire in Northern California, killing nine people, including seven firefighters from Jackson and Josephine counties.
The aircraft clipped a tree, smashing and bursting into flames, becoming the deadliest helicopter crash involving working firefighters in U.S. history.
Steven Metheny, 42, of Central Point, and Levi Phillips, 45, of Grants Pass, were indicted last week by a federal grand jury in Medford on charges the pair schemed to defraud the U.S. Forest Service.
Metheny, a former Carson vice president, also was charged with 22 counts of mail and wire fraud, making false statements to the Forest Service, endangering the safety of aircraft in flight, and theft from an interstate shipment.
Phillips was the company's director of maintenance, reporting directly to Metheny.
The 25-page indictment says that roughly between March and October 2008, Metheny and Phillips submitted bid proposals on behalf of Carson Helicopters that contained information the two knew was false.
The bid proposals contained falsified weight and balance charts and falsely altered performance charts that were submitted so the Forest Service could determine whether the helicopters met minimum contract specifications, court documents claim.
Prosecutors say Metheny knowingly distributed the false information to pilots and helicopter flight manuals for use in the field.
"The falsified charts were then used by pilots, unaware of the false nature of the charts, in performing firefighting flight operations, including calculating the helicopter's maximum payload capacity during firefighting operations, thereby endangering the safety of the helicopters in flight," court documents state.
When asked why the specifications were different than those on similar helicopters, the indictment says Metheny told the Forest Service the company had modified the engines to be more powerful.
Calls to Metheny seeking comment Monday were not returned. Phillips does not have a listed phone number. No attorney is listed for Metheny or Phillips on the court docket.
The men face a maximum of 20 years in prison, if convicted on the conspiracy charge. Metheny could potentially get decades more on the other charges, prosecutors said.
Prosecutors described the altered documents as part of a scheme to defraud the government and gain contracts.
"The helicopters were not weighed on the scales as represented, they were not weighed on the dates listed and they were not actually weighed as represented," the indictment states, adding one of the helicopters "was in a different country at the time of the alleged weighing."
As a result of these "materially false and fraudulent representations," Carson Helicopters got contract work totaling more than $20 million, federal prosecutors said in Monday's release.
The helicopter performance information provided by Metheny "made it appear to reviewing (Forest Service) officials that the helicopters had greater performance capability during firefighting operations than they actually did and were capable of carrying a higher payload," the indictment states.
"As a result of the materially false and fraudulent pretenses, representations and omissions of fact by defendants, the (Forest Service) awarded helicopter contracts for firefighting operations to (Carson)," it states.
Carson Helicopters, which recently decided to close its Oregon center and consolidate operations in Pennsylvania, said in a statement that it has fully cooperated with the investigation, The Associated Press reports.
"During the course of the investigation, Carson Helicopters learned information about the conduct of Steve Metheny, and the company terminated his employment in 2009," the statement said. The company said it suspended Phillips on Monday after learning he had been indicted.
The crash occurred on a nearly 6,000-foot-high mountaintop near Weaverville, Calif., while the Sikorsky S-61N helicopter was ferrying out firefighters battling the Iron 44 fire in the Trinity Alps Wilderness.
A National Transportation Safety Board investigation showed the helicopter weighed more than 19,000 pounds when pilots tried to take off from a mountaintop clearing during the Iron 44 wildfire in the Shasta-Trinity National Forest. If Forest Service guidelines had been followed, investigators said, the weight shouldn't have exceeded 15,840 pounds. It concluded in 2010 that Carson's deliberate understatement of the weight of its helicopter and lapses in safety oversight caused the fatal crash.
In March 2012, a federal jury in a civil suit in Portland determined that a faulty engine, not overloading, was responsible. That suit, filed by surviving co-pilot William Coultas, 48, of Cave Junction, his wife, Chris, and the widow of victim Roark Schwanenberg, sought $177 million from engine-maker General Electric.
The jury took two weeks to reach a decision. It placed 57 percent of the blame on GE, and the rest on the helicopter's owner and manufacturer. The verdict flew in the face of the NTSB's 2010 conclusion.
Coultas, who was severely burned in the crash, was awarded $37 million in the judgment. He has maintained the cause was loss of power in the No. 2 engine less than a minute after takeoff. He said he relied upon the log books, and blamed the crash on design flaws in the Sikorsky helicopter's engine.
Attempts to reach Coultas Monday were unsuccessful.
Reach reporter Sanne Specht at 541-776-4497 and Anita Burke at 541-776-4485. Steven Dubois of The Associated Press also contributed to this story.