Former Hanford worker won't receive part of timecard fraud settlement

By Annette Cary, Tri-City HeraldMay 13, 2013 

A former Hanford worker convicted of timecard fraud will not receive any money from a settlement with the government, U.S. Judge Lonny Suko ruled Monday.

Carl Schroeder's attorney had argued that Schroeder was entitled to a portion of an $18.5 million settlement collected by the U.S. government for helping to expand the fraud investigation from four people to hundreds. The former worker stood to receive a multimillion dollar recovery had the judge agreed, according to court documents.

Schroeder filed a civil whistleblower lawsuit in June 2009 against former Hanford contractor CH2M Hill Hanford Group under the False Claims Act, which allows whistleblowers to collect a portion of any damages awarded.

The federal government took over the civil lawsuit, as provided by the act, in fall 2012. In March, CH2M Hill agreed to pay $18.5 million to settle civil and criminal allegations of defrauding taxpayers.

Under the scheme, workers -- including Schroeder -- would work overtime offered by CH2M Hill in eight-hour shifts, even though the work often could be done in less time. Employees would leave when their work was completed, but claim overtime pay for a full eight hours, which ultimately was paid for with tax dollars, according to the Justice Department.

Schroeder is one of nine current or former Hanford employees to plead guilty to charges related to timecard fraud. Ten current or former upper managers and supervisors at Hanford have been indicted by a grand jury on accusations they enabled timecard fraud.

Suko dismissed Schroeder from the whistleblower lawsuit, agreeing with the Department of Justice that the law is clear that anyone convicted of criminal conduct not receive any part of a settlement that resulted from the fraud.

Schroeder knew of the fraud when he started working at the Hanford tank farms in January 2002, the judge said in his ruling, quoting from Schroeder's plea agreement. Schroeder participated in the timecard fraud from May 2004 to October 2008, according to court documents.

Schroeder did not approach investigators on his own initiative, the judge found. Instead, the Department of Energy Office of Inspector General approached him as part of an investigation it started after receiving an anonymous complaint from someone other than Schroeder in 2008.

Schroeder revealed his participation in the timecard fraud in interviews in December 2008 and January 2009, the judge said.

He provided information that showed that the timecard scheme was widespread and initiated by CH2M Hill, said Schroeder's attorney, Jackson Schmidt.

However, the judge said Schroeder appears already to have been rewarded for his help, reaching a plea deal with the Justice Department "which appears very favorable to him."

The federal government agreed to ask for a reduced sentence if he provides substantial assistance in the investigation. The plea agreement provides for a $50,000 fine rather than requiring restitution for his timecard fraud over more than four years, which likely would be more than $50,000, possibly much more, the judge said.

-- Annette Cary: 582-1533; acary@tricityherald.com; Twitter: @HanfordNews

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