Longtime Spokane Valley manufacturer files for bankruptcy; embezzlement skimmed $1 million from company

One of the few Spokane-area businesses that takes raw materials and molds them into useful parts for other industries has filed for Chapter 11 bankruptcy after suffering a series of setbacks, including one from an employee who was charged with siphoning more than $1 million into her own bank accounts.

Spokane Industries, which originally was founded in 1952 and primarily operates a foundry at 3808 N. Sullivan Road in Spokane Valley, filed for protection from its creditors in the type of bankruptcy that allows it to restructure its finances while it continues operations.

The business, which reportedly has between 70 and 100 employees, was purchased in 2022 by Patrick and Lisa Turner from brothers Greg and Tyrus Tenold.

“It was our intent to expand the (Spokane Industries) operations to service the mining industry, particularly after recognizing the increase of global copper demand,” Patrick Turner wrote in U.S. Bankruptcy Court records.

But since purchasing the company, it has suffered a series of “major and unforeseeable setbacks that have led to the need for this reorganization proceeding,” Turner wrote.

Upon purchasing the company, the Turners said they learned that company equipment, in which workers inject molten metal into moldings to make heavy-duty parts for the mining and rock crushing industry, “proved to be older and far less reliable than had been represented in our acquisition,” court records state.

In addition, the Turners purchased a company that faced pressures coming out of the COVID-19 pandemic.

Spokane Industries had not been able to operate at full capacity, which contributed to a backlog of orders from customers who had ordered parts for prices that did not cover the escalating costs of materials.

Two of the alloys used in production have risen in price about 25-35%, Turner wrote. “This decimated the (company’s) working capital, a situation from which it has been unable to recover.”

In its initial bankruptcy filing, the company listed assets of about $9.8 million, including raw materials and finished parts that had previously been ordered.

However, Turner also indicated the company owes about $19.8 million to creditors in secured and non-secured claims.

Efforts to reach Turner and his attorney, Thomas Buford, were not immediately successful on Wednesday.

Sky is falling

The company slogged through the limitations of its older equipment and labor issues to improve its balance sheets by about midway last year, but then two major events befell the manufacturer.

“On August 17, 2025, a structural beam in the (company’s) primary operating facility collapsed, resulting in a complete production shutdown for five weeks and a $1.48 million financial loss,” Turner wrote.

For that damage, the company has thus far only received $450,000 to cover that loss from an advance from its insurance claim.

The second major hit, according to court records, was self-inflicted.

Earlier last year, Turner was contacted by agents from the FBI about the finances of one of its employees, Tahnya H. Shafer.

“My subsequent internal investigation documented for the FBI identified $1.068 million that Shafer had fraudulently obtained from (Spokane Industries) between 2023 through 2025 through a variety of means,” Turner wrote.

According to court records, federal investigators charged Shafer with 26 counts of wire fraud and two counts of money laundering in federal court in Idaho. Shafer, according to court records, worked for the Spokane Valley business but lived in Coeur d’Alene.

She had been working as Spokane Industries’ human resources manager from 2022 to 2025, responsible for processing and recording payments to vendors.

With access to the company’s books, Shafer was able to “inflate her paycheck so that she was paid more than she was entitled to earn as a salaried employee,” her indictment states.

But for her second act, Shafer created “new fictional employees” and collected the paychecks to those ghost employees that were deposited into her own bank accounts, court records state.

“Shafer fraudulently obtained at least $774,385.87 from the two above-described fraudulent payroll schemes,” Assistant U.S. Attorney Adam Johnson wrote.

As part of a different scheme, Shafer made changes to payments to vendors. Instead of paying vendors for legitimate expenses, those payments were “routed to Shafer’s bank accounts, rather than the seemingly legitimate vendors,” Johnson wrote. “Shafer fraudulently obtained at least $265,740.40 from the above-described” payment scheme.

As for what she did with the money, investigators learned that Shafer transferred more than $120,000 to pay down her home-equity line of credit.

She also “would spend the majority of the funds at a local casino in Idaho,” court records state.

Reached by telephone on Wednesday, her attorney, Matt Duggan, declined to comment about the allegations. But Duggan did confirm that Shafer has indicated her willingness to plead guilty to a single count from the 28-count indictment.

Shafer is scheduled to appear in U.S. District Court in Coeur d’Alene on March 24.