"UNITED STATES FILES FALSE CLAIMS ACT AND ANTI-KICKBACK ACT SUIT AGAINST GEORGE PETERSON, VICE PRESIDENT OF KENNEWICK INDUSTRIAL & ELECTRICAL SUPPLY, INC."
Spokane – On Friday, the United States Attorney's Office for the Eastern District of Washington filed a civil lawsuit against George Peterson in U.S. District Court in Spokane. In its complaint the United States alleges that, George Peterson, while the Vice President of Kennewick Industrial & Electrical Supply Inc., ("KIE"), knowingly engaged in two schemes, a kickback scheme and a fraud scheme, which ultimately resulted in the loss of hundreds of thousands of dollars to the United States Department of Energy ("DOE").
The allegations regarding the first scheme are that Mr. Peterson engaged, directly and indirectly, in a kickback scheme primarily executed by a KIE employee under his supervision, Martin Perez, and Gregory Detloff, a material coordinator for two DOE prime contractors, CH2M Hill Hanford Group Inc., ("CH2M Hill") and Fluor Hanford Inc. ("Fluor"). The United States alleges that under that kickback scheme KIE through Mr. Perez, with the knowledge of Mr. Peterson, acted as a middleman for Mr. Detloff to make purchases from his wife's company. The purchases were made at substantial and unreasonable markups. Mr. Detloff's purchases on behalf of CH2M Hill and Fluor were made with his government issued purchase card ("P-Card") and were ultimately paid for by DOE.
The United States alleges that as a result of this kickback scheme DOE paid over $700,000 for materials that actually cost approximately $350,000, or less. Mr. Perez and Mr. Detloff have both pleaded guilty to Conspiracy to Commit Wire Fraud for their roles in the scheme.
The allegations regarding the second scheme are that Mr. Peterson engaged in, directly and indirectly, a fraudulent scheme primarily executed by KIE employees under his supervision, including Martin Perez and others, as well as Suzie Zuniga, a material coordinator for Fluor.The United States alleges that these KIE employees, at times with the assistance of Mr. Peterson, facilitated Ms. Zuniga's improper purchases of over $300,000 worth of personal electronics and household appliances with her government issued P-Card. KIE is not in the business of selling personal electronics and household appliances. Nonetheless, the KIE employees acted as middlemen making the improper purchases for Ms. Zuniga and then charging them to Fluor through Ms. Zuniga's P-Card. The United States alleges that as a result of this fraud scheme DOE paid over $300,000 for personal electronics and household appliances that were never received by DOE or Fluor. Ms. Zuniga has pleaded guilty to fifteen counts of Wire Fraud for her role in the scheme.
Pursuant to the False Claims Act and the Anti-Kickback Act the United States is seeking damages and civil penalties from Mr. Peterson for his role in the kickback and fraud schemes.
"Investigating and prosecuting government prime contractor and subcontractor fraud is a top priority," said Michael C. Ormsby, United States Attorney for the Eastern District of Washington. "This complaint sends a clear message that we will aggressively pursue all persons responsible for fraud that runs up costs and frustrates the vital mission of clean up at the Hanford Nuclear Facility."