CH2M Hill Hanford Group has agreed to pay the United States $1.5 million to resolve allegations that it submitted false claims relating to a federal contract to manage mixed radioactive waste at the Hanford nuclear site.
The announcement Thursday by the Department of Justice centers around two former employees of the engineering and construction firm who were responsible for buying supplies for use by CH2M, but between 2003 and 2005 bought from companies owned by their spouses and charged it all to the Department of Energy on federal credit cards.
The more than 200 purchases never were delivered to the firm.
A total of seven people were indicted in spring 2010 in U.S. District Court for defrauding DOE with their purchase cards, or P-cards. The last person pleaded guilty this week to diverting $487,000 for his own use.
CH2M at the time was a DOE prime contractor responsible for management, maintenance and cleanup of the Hanford tank farms.
Internal audits conducted by the firm from 2002-05 showed weaknesses in the P-card controls, "weaknesses exploited by these schemes," yet CH2M failed to do anything which let the criminal action go undetected for years, the Justice Department said in a news release.
"Companies that do business with the government must ensure that their employees are acting fairly, not lining their own pockets," said Tony West, assistant attorney general for the Justice Department's civil division.
The Hanford Group is a subsidiary of CH2M Hill Companies Ltd., which is based in Englewood, Colo.
CH2M Hill spokesman John Corsi told the Herald in an email Thursday that the firm's internal auditing procedures in 2005 identified inappropriate use of P-cards by two employees working at the Hanford tank farms project.
"The alleged violations were immediately reported to the Inspector General's office of the DOE and the two individuals were terminated and prosecuted with our help," Corsi said.
"Today, we closed the matter with the DOJ and we are glad to have it behind us," he added. "While the DOJ questioned our oversight in the matter, it is important to note that the alleged violations were identified by us, immediate action was taken and the incident was immediately reported to the appropriate government authorities."
The agreement is the third civil settlement in a series of related cases stemming from government purchase card fraud at the Hanford site, according to the Justice Department.
In June, Fluor Hanford agreed to pay $4 million to resolve its liability for schemes involving Kennewick Industrial and Electric Supply (KIE) and AMG Marketing, along with two additional fraudulent schemes. And in July, KIE agreed to pay $515,000 to resolve its liability.
"Government contractor fraud at Hanford simply will not be tolerated," said Michael C. Ormsby, U.S. Attorney for the Eastern District of Washington. "This resolution demonstrates that corporations will be held accountable when they turn a blind eye to fraud and self-dealing."