The former W International metal fabricating site in Goose Creek is the subject of an $80 million whistleblower lawsuit unsealed Monday in federal court in Charleston. The company's assets were acquired last year by Navy contractor Newport News Shipbuilding, which is not part of the lawsuit. This photo is from the company's January 2025 announcement. (Courtesy of Huntington Ingalls Industries)
A former Goose Creek metal fabricator and its founder are accused in court documents of bilking millions of dollars from federal contracts for the construction of the U.S. Navy’s next-generation nuclear submarine, overbilling the government for labor and materials while its executives pocketed much of the money.
W International and company CEO Ed Walker are the key defendants in a whistleblower case unsealed Monday in federal court in Charleston. The case has been sealed from public view since 2022, when the government was first notified of potential wrongdoing at W International.
Walker could not be reached for comment Monday. He lives in Michigan, according to the lawsuit.
The lawsuit names John Klausmeier as the whistleblower in the case. Klausmeier previously worked at W International when it was based in Michigan and moved to South Carolina in 2019 to become chief operating officer of the Goose Creek site. Klausmeier was fired in October 2021.
Klausmeier is represented by former U.S. Attorney Bill Nettles, who declined to comment.
The federal government, which took over the case, is asking for a jury trial, which has not been scheduled.
The alleged fraud dates to 2019, when Walker moved W International to Bushy Park Road in the Charleston International Manufacturing Center with the aim of obtaining government shipbuilding contracts.
W International’s assets were acquired last year by military contractor Newport News Shipbuilding, which builds Navy warships, including aircraft carriers. Newport News Shipbuilding is not a part of the lawsuit.
According to court documents, W International received $80 million from federal government programs in 2019 and 2020 to help establish a metal fabrication firm that could make parts for the Navy’s Columbia-class submarines, the newest design replacing aging models.
Some of those federal funds were administered by another defendant: General Dynamics Electric Boat, the military’s main submarine contractor and W International’s top customer.
W International “grossly inflated the price” of equipment it sold to Electric Boat, court documents state, and charged for labor that didn’t take place.
For example, Electric Boat purchased hundreds of welding/leveling tables — a type of adjustable metal table — from W International at a cost of $15,000 per table. W International’s actual cost for the tables, including labor, was $2,100 apiece.
W International also took federal money to purportedly train and certify welders, although court documents state the company “provided little training to its employees” at the Goose Creek site. Instead of setting up a training program for welders, W International primarily trained its welders “on the job,” the lawsuit states.
W International also inflated the price of equipment and double-billed for labor costs under another federal program meant to help private companies produce materials for national defense. W International outsourced the production of some of that equipment to a purported third party that was, in fact, a wholly owned subsidiary of Walker’s company, court documents state.
W International “engaged in bid rigging to further increase its profits and conceal its inflated material costs and labor costs,” the lawsuit states.
As a result of the alleged fraud, the quality of W International’s products “suffered greatly, which has jeopardized the efficient production of the submarine fleet and jeopardized the lives of workers and sailors,” according to court documents.
W International was originally located in Michigan, where it hoped to supply the automotive industry with fabricated metal products. But the company racked up millions of dollars in debt and was unable to pay its employees, vendors and suppliers, according to the lawsuit.
Walker then shifted focus, looking to take advantage of lucrative Navy contracts at a new site in the Lowcountry, the lawsuit states.
South Carolina’s Department of Commerce heralded the move, stating in late 2018 that W International planned to invest $35.2 million and create 600 jobs at the Goose Creek site. The state also approved tax credits and a $2 million grant to help the company get its foothold.
Under the federal False Claims Act, the government is seeking restitution of up to three times the amount of the alleged fraud. Whistleblowers typically receive between 15% and 30% of that amount for bringing the matter to investigators.
The government has named Electric Boat as a defendant because, as the Navy’s primary submarine contractor, the Connecticut company knew or should have known about the alleged fraud. A spokeswoman for Electric Boat did not respond to a request for comment.
The other defendant in the case is Precision Material Handling Equipment LLC, the Walker-owned company that produced some of the welding/leveling tables that W International sold to the government.
SC Daily Gazette reporter David Wren first reported on W International’s troubles in 2024, after obtaining a copy of a civil investigative demand letter issued to the company by the Department of Justice.
That 12-page letter, which is similar to a subpoena, said investigators were looking into potential violations of the federal False Claims Act, which is meant to deter and punish defense contractor fraud.
In the midst of the federal investigation, Newport News Shipbuilding — a division of Huntington Ingalls Industries — completed its acquisition of W International’s assets in early 2025. Newport News Shipbuilding, the Navy’s largest shipbuilder, said it did not acquire any of W International’s legal or financial liabilities.
Operations continue with Newport News Shipbuilding, which kept most of W International’s employees. State tax incentives transferred to the buyer.
w international lawsuitCourtesy of South Carolina Daily Gazette
