Routine timecard fraud alleged at former Hanford contractor

By Annette Cary, Tri-City HeraldNovember 4, 2011 

Timecard fraud was an accepted practice under former Hanford contractor CH2M Hill Hanford Group, court documents alleged in the case of a former Hanford tank farm worker who pleaded guilty Thursday to conspiracy to turn in false timecards.

Carl Schroeder, 43, of Richland, admitted to being paid at least $50,000 for overtime claimed on his timecard but not worked, according to a plea agreement filed Thursday in Eastern Washington Federal District Court in Yakima. He waived indictment by a grand jury and pleaded guilty.

He has agreed not to appeal his sentence if the court imposes a prison term of one year or less and a fine of not more than $50,000. He pleaded guilty to a felony that carries a maximum penalty of 10 years in prison and a fine of $250,000.

When Schroeder started working at the Hanford tank farms as a radiological control technician in January 2002, he learned of the timecard fraud scheme, according to the plea agreement. The tank farms hold 56 million gallons of radiological waste left from plutonium weapons production in underground tanks.

An employee working a swing shift from 4:30 p.m. to 12:30 a.m. would leave when the job requiring overtime was completed, but claim a full eight hours of overtime pay.

The practice was so widespread that Schroeder could see that none of his fellow radiological control technicians or other CH2M Hill hourly employees stayed for a full eight-hour overtime shift, according to the plea agreement.

The timecards claiming unworked overtime routinely were approved by CH2M Hill supervisors who had seen the hourly employees leaving well before the end of eight hours, according to the plea agreement. In fact, many of the supervisors approving the false timecards had claimed the full eight hours of overtime when they were hourly employees, according to the plea agreement.

Supervisors would say at the beginning of the job that when it was completed, workers could conduct "self study" or "go to that place and do that thing that we do," according to the plea agreement.

Schroeder and other employees took that as a cue that they could go home early while still claiming eight hours of overtime, according to the plea agreement.

In addition, supervisors would tell employees when they were leaving and then say things like "don't pass me on the way home," according to the plea agreement. At other times, they would ask "what are you still doing here?"

Overtime shifts nearly were always offered by CH2M Hill management in eight-hour blocks, which encouraged employees to claim the full eight hours no matter how long they worked, according to the plea agreement.

At one point, Schroeder and three other employees were told by their supervisor to go into town to eat and return, which was a one-hour round trip. They were gone for two hours and the supervisor who authorized the leave approved the two hours Schroeder was gone as overtime, the plea agreement said.

The conspirators also worked to avoid detection by law enforcement, according to the U.S. Department of Justice.

In May 2008, Schroeder's supervisor received an anonymous tip through a text message that employees were not at the tank farms during an overtime shift. The supervisor, who had left for the day, went back to the tank farms and confirmed that most, if not all, employees working overtime that night had left, according to the plea agreement.

Rather than taking disciplinary action, the supervisor called employees and told them to record only the time they worked on their timecards, according to the plea agreement. It also said that the supervisor's action was approved by at least one person higher up in CH2M Hill's management.

The next day, Schroeder and his co-workers were told not to claim more hours than worked to avoid detection. They did that for a month or two, before resuming the practice of claiming a full overtime shift while working less, according to the plea agreement.

Between May 2004 and October 2008, Schroeder routinely would leave at 9:30 p.m. or earlier, while claiming an eight-hour shift, according to the plea agreement. He claimed a total of 1,765 hours of overtime, which were paid by the federal government.

Although it was an accepted practice at CH2M Hill to pay hourly employees for hours claimed but not actually worked, the practice was contrary to CH2M Hill's written procedures, according to the plea agreement.

CH2M Hill's contract with the Department of Energy expired Oct. 1, 2008. The next month, the Herald learned that new contractor Washington River Protection Solutions had placed four tank farm employees on leave, saying an investigation of timecard practices had been under way by the DOE Office of Inspector General before it took over the contract. Schroeder has not worked at the tank farms since early 2009, according to the new contractor.

"Employees of government contractors at Hanford who engage in corrupt practices, which defraud the government and the American people, must be held accountable," said Michael Ormsby, U.S. attorney for the Eastern District of Washington, in a statement.

The U.S. attorney's office, the DOE Office of Inspector General and the Federal Bureau of Investigation are committed to investigating all credible allegations of corporate fraud no matter how widespread the conspiracy or how high up the corporate ladder a scheme may go, he said.

Schroeder is scheduled for sentencing May 17. However, as part of the plea agreement, he will continue to assist in the investigation of the timecard conspiracy and the sentencing could be delayed until his help no longer is needed.

-- Annette Cary: 582-1533;

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