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Justice News

Department of Justice
U.S. Attorney’s Office
Eastern District of Washington

Thursday, July 21, 2016

Ch2m Hill Completes Payment of Half a Million Dollars Towards Accountability Systems at Hanford

Richland – This week CH2M HILL Companies Ltd., and its subsidiaries CH2M Hill Hanford Group Inc., and CH2M Hill Plateau Remediation Company, (“CH2M”) completed the payment of $500,000 for accountability systems at the Hanford Nuclear Site as required by the Non-Prosecution Agreement (“NPA”) that it entered into with the United States Attorney’s Office for the Eastern District of Washington in March of 2013. In 2013 CH2M admitted that between 1999 and 2008 CH2M Hill Hanford Group Inc. (“CHG”) participated in a widespread criminal conspiracy with its own employees, at all levels, to defraud the Department of Energy (“DOE”) through systemic timecard fraud. CHG’s fraud directly cost DOE and the federal tax payer millions of dollars.

In March of 2013 CH2M entered into the NPA to resolve CHG’s criminal liability and fully admitted to CHG’s criminal conduct. In addition, at that time CH2M entered into a settlement agreement with the Department of Justice resolving CHG’s civil liability for that same conduct under the False Claims Act.

While CH2M has continuing obligations to cooperate with ongoing investigations under the NPA, it has successfully completed the following requirements:

- Payment of a total of $18.5 million dollars to resolve CHG’s civil and criminal liability;

- Hired and paid for an independent corporate monitor for 3 years, gave her full access to all CH2M Hill Plateau Remediation (“CHPRC”) personnel, systems, and locations to ensure that similar violations would not occur;

- Cooperated extensively in the investigation and prosecution of co-conspirators; and

- Payment of a total of $500,000 for accountability systems at the Hanford Site to further ensure the detection and deterrence of timecard fraud.

Michael C. Ormsby said, “CH2M admitted to the egregious criminal conduct of CH2M Hill Hanford Group Inc., and took the concrete steps to try to make things right as required by the NPA. In particular, the CH2M subsidiary remaining at Hanford (CHPRC) has fully lived up to its obligations under the NPA and we have every reason to expect it will continue to do so.”

Under the terms of the NPA CH2M, through CHPRC, was required to pay $500,000 for accountability systems to detect and deter timecard fraud. CHPRC spent $29,301.57 instituting and implementing modifications to the Time Information System (“TIS”) creating an automated verification of time worked by CHPRC employees. These modifications to TIS were reviewed and approved by the CHPRC independent corporate monitor. The remaining $470,698.43, was paid directly to DOE and has been earmarked for use for additional accountability systems anywhere on the Hanford Site in order to detect and deter timecard fraud and abuse. Further, the NPA requires CH2M to provide a full accounting to the United States Attorney’s Office of the $500,000 to ensure that it came from CH2M’s own money and was not charged directly or indirectly to the federal government. The goal of everyone in this region is to make sure that money allocated to the clean-up of the Hanford Nuclear Reservation is effectively expended for that purpose. The installment of accountability systems to help prevent similar misconduct by contractors in the future was particularly important to the United States  Attorney’s Office.

Michael C. Ormsby noted “The investigation of CH2M Hill Hanford Group’s systemic timecard fraud revealed a disturbing culture of fraud that has infected various areas of the Hanford Site.” USA Ormsby went on to state, “While the vast majority of people working at Hanford are law abiding, my office, and its law enforcement partners, remain committed to doing all we can to root out and hold accountable all persons and entities guilty of stealing federal tax payer dollars. We are also committed, as the NPA shows, to assisting in instituting solutions that will deter such conduct in the future. We are pleased that CH2M, through the NPA process, has become an ally in these efforts and we hope that other contractors at Hanford will follow its lead without the need for the direct involvement of law enforcement.”

This case was investigated by the United States Department of Energy’s Office of Inspector General, Richland, WA and the Federal Bureau of Investigation. Tyler H.L. Tornabene, an Assistant United States Attorney for the Eastern District of Washington, and Daniel Hugo Fruchter, an attorney with the Department of Justice, Civil Frauds Section, represented the United States in this matter.

Press Release Number: 
Cf. United States ex rel. Schroeder v. CH2M Hill, CV-09-5038 (EDWA)
Updated July 21, 2016