Owner of Hanford Subcontractor to Pay $235,000 to Settle Small Business Fraud Allegations
Spokane - Joseph H. Harrington, Acting United States Attorney for the Eastern District of
Washington, announced that the U.S. Department of Justice (DOJ) and Sage Tee LLC (Sage Tee), a
subcontractor at the Department of Energy's (DOE) Hanford Site, and its owner, Laura Shikashio,
have reached an agreement wherein Sage Tee and Ms. Shikashio have agreed to pay $235,000 to
resolve allegations that they violated the False Claims Act (FCA) in connection with bidding -
receiving two small business subcontracts at DOE's Hanford nuclear site.
Between 2005 and 2016, Washington Closure Hanford, LLC (WCH), a jointly owned by AECOM,
Bechtel National Inc., and CH2M Hill Companies Ltd., was a DOE prime contractor that was
awarded a multi-billion dollar River Corridor Closure Contract (RCC) at DOE's Hanford Site.
WCH was responsible for environmental remediation on Hanford's River Corridor. WCH workers
were responsible for cleaning up waste sites at Hanford, decontaminating and decommissioning
former plutonium production nuclear reactors and surplus facilities, and disposing of contaminated
waste. The RCC required WCH to award a certain percentage of subcontracts to eligible and
qualified small and disadvantaged businesses, including woman-owned small businesses. Pursuant
to the WCC, DOE fully reimbursed WCH for the amounts WCH paid to subcontractors so long as
they were reasonable and allowable under the contract.
The case originally arose out of a whistleblower complaint filed in U.S. District Court by Savage
Logistics LLC, a Hanford-area small business, and Salina Savage, its owner. In December 2013, the
United States filed a Complaint intervening in the lawsuit, alleging that WCH, Sage Tee LLC (an
entity that purported to be a small, disadvantaged business), Laura Shikashio, the owner of Sage Tee,
and another entity known as Federal Engineers and Constructors (FE&C), violated the False Claims
Act (FCA) with respect to two multi-million dollar subcontracts arranged between WCH and Sage
Tee. The Complaint alleges that WCH, Sage Tee, Ms. Shikashio, and FE&C knowingly
misrepresented Sage Tee to be a qualified disadvantaged small business in order to he eligible for
two multi-million dollar subcontracts that were designated for truly qualified small disadvantaged
businesses. The Complaint further alleges that Sage Tee was not a legitimate small, disadvantaged
business; rather it was a pass-through front company for FE&C, which performed substantially all of
the work on WHC's improperly awarded subcontracts. This settlement resolves Sage Tee and Ms.
Shikashio's liability. See attached Settlement Agreement.
Last month, FE&C agreed to pay $2.0 Million to resolve its own liability exposure. WCH continues
to deny liability and the United States' case against WCH continues.
Joseph H. Harrington said, "Small business fraud not only harms the taxpayers and the vital cleanup
mission at Hanford, but also legitimate small, disadvantaged businesses that are cheated from the
opportunity to fairly compete for and perform DOE subcontracts. I want to commend the
Department of Energy Office oflnspector General (DOE-OIG) and the Small Business
Administration Office of Inspector General (SBA-OIG) for the outstanding efforts investigating and
uncovering the scheme perpetrated here. Harrington added, "The United States Attorney's Office
for the Eastern District of Washington, together with our federal law enforcement partners, will
continue to vigorously pursue large and small business fraud at Hanford."
"The false statements in this case were intended to deceive the government into believing that a
woman-owned small, disadvantaged business was performing valuable work as a government
subcontractor," said Small Business Administration Acting Inspector General Hannibal "Mike"
Ware. "OIG will aggressively pursue parties that, through fraud, gain access to SBA's small
business contracting programs. I want to thank the U.S. Attorney's Office for their dedication to
enforcing compliance in SBA's contracting programs."
Department of Energy Acting Inspector General April G. Stephenson said, "The Department of
Energy Office of Inspector General is committed to ensuring the integrity of Departmental contracts
and financial expenditures. We will continue to investigate allegations of fraudulent diversion of tax
dollars throughout DOE programs. This settlement is a result of our staffs dedicated work to ensure
public funds are properly used for the mission-related purposes for which they are intended. We
appreciate the support of Department of Justice's and Department of Energy's attorneys in these
The Savage whistleblowers will receive approximately $47,000 of the $235,000 settlement DOJ
reached with Sage Tee and Shikashio due to their own private efforts in reporting and exposing the
described scheme to the DOE and DOJ.
DOE-OIG and SBA-OIG conducted the investigation on the Relators' whistleblower complaint.
The DOJ's lawsuit is being prosecuted by Tyler H.L. Tornabene, Vanessa R.Waldref, and Daniel
Fruchter, Assistant United States Attorneys for the Eastern District of Washington.
This case is captioned United States of America ex rel. Salint;J Savage, Savage Logistics LLC, vs.
Washington Closure Hanford LLC, Federal Engineers and Constructors, Inc., Sage Tee LLC, and
Laura Shikashio, EDWA Cause No. CV-10-5051-SMJ.