The two contractors building the country’s largest radioactive waste treatment at the Hanford Site in southeastern Washington State have agreed to pay $57.75 million to settle a whistleblower lawsuit alleging they fraudulently inflated labor costs billed to the government.
The U.S. Department of Energy contracted Bechtel Corp. and its leading subcontractor to build the $17 billion vitrification plant to be used in the ongoing cleanup at the Hanford Site, which manages the cleanup of radioactive waste from five decades of nuclear weapons production. The plant, slated to start operating in 2023, will turn radioactive waste held in underground tanks at the site into a stable glass form for disposal.
On Tuesday, Sept. 22, the U.S. Department of Justice unsealed a whistleblower complaint when it reached a settlement with the contractors over the alleged billing fraud.
“It is stunning that for nearly a decade, Bechtel and Aecom chose to line their corporate pockets by diverting important taxpayer funds from this critically essential effort,” said Joseph Harrington, first assistant U.S. attorney for the Eastern District of Washington state, in a statement about the settlement.
The settlement resolves a False Claims Act lawsuit filed by four Hanford Site employees. They filed their original False Claims Act lawsuit in 2017, alleging Bechtel and Aecom inflated the work hours for hundreds of electricians, millwrights, pipefitters and other craft workers in labor charges billed to the DOE.
The whistleblowers alleged that the contractors continued to knowingly bill the DOE for inflated overtime hours even after they knew they were being investigated.
The total that the DOE overpaid the companies for labor was nearly $26 million. The contractors will pay a little more than twice that amount as a punishment for the fraud. The total is still less than the amount they would have paid had the case gone to trial and resulted in a ruling for the U.S. government. Under the False Claims Act, defendants are automatically on the hook for three times the damages in addition to other fees.
“Providing for multiple damages and significant penalties means that a company or individual can’t just falsely claim payments, get caught and then pay back the amount they stole,” said Dan Fruchter, assistant U.S. attorney.
The settlement agreement also requires Bechtel and Aecom to admit to the fraud.
The decades-long effort to clean millions of gallons of nuclear waste is of “critical importance … to the people of the Pacific Northwest and to our nation,” Assistant U.S. Attorney Dan Fruchter said, according to the Spokesman-Review. “We do not believe it was appropriate for Bechtel and AECOM to simply cut a check and deny everything. We required them to admit to their conduct in a detailed statement of facts.”
The Justice Department will pay $13,750,000 of the total settlement amount. Under the False Claims Act, whistleblowers who False Claims Act lawsuits result in a recovery receive up to 25% of the total settlement amount as a reward. Whistleblowers can receive up to 30% of a settlement or judgment if the Justice Department declined to intervene.
Beasley Allen has a Whistleblower Litigation Team in place to handle False Claims Act (FCA) claims. Due to our firm’s heavy involvement in whistleblower litigation, there was a definite need for the creation of a team specializing in whistleblower cases. Fraud against the federal government has been and continues to be a huge problem, involving many industries in this country, and is usually rampant in the wake of disasters requiring federal assistance, such as major hurricanes, the Deepwater Horizon oil spill, and as we have seen in recent months, the coronavirus pandemic. We expect the amount of fraud against the government to increase greatly during the coming months.
As we have consistently stated, whistleblowers are the key to exposing corporate wrongdoing and government fraud. A person who has first-hand knowledge of fraud or other wrongdoing may have a whistleblower case. Before you report suspected fraud or other wrongdoing – before you “blow the whistle” – it is important to make sure you have a valid claim and that you are prepared for what lies ahead. Beasley Allen’s group of lawyers dedicated to handling whistleblower cases can navigate you the oftentimes risky and complex litigation.
Lawyers on our whistleblower litigation team are Lance Gould, Larry Golston, Lauren Miles, Leon Hampton, Leslie Pescia, Paul Evans and Tyner Helms. If you are aware of fraud being committed against the federal or state governments, you could be rewarded for reporting the fraud. If you have any questions about whether you qualify as a whistleblower, you can contact a lawyer at Beasley Allen for a free and confidential evaluation of your claim.
Additional source: Tri-City Herald