CH2M Hill To Pay $18.5M To Settle Federal Fraud Charges

CH2M Hill Cos. Ltd. has agreed to pay $18.5 million to settle federal civil and criminal fraud charges of overstating hours worked and inflating claims filed for work under a contract at the Dept. of Energy’s Hanford site in Washington state, the Dept. of Justice said.

Under the agreement, announced on March 7, CH2M Hill, Englewood, Colo., also agreed to spend an additional $500,000 to set up accountability systems and continue to cooperate with what the Justice Dept. termed an “ongoing fraud investigation.”

The case deals with work that company subsidary CH2M Hill Hanford Group Inc. (CHG) undertook, from 1998 to 2008, on a DOE contract to manage and clean 177 large underground storage tanks that held mixed radioactive and hazardous waste at the former nuclear-weapons production site at Hanford.

In a statement of facts to which the company and DOJ agreed, CHG employees “routinely overstated” the hours worked and CHG managers “condoned the practice and submitted inflated claims to [DOE] that included the fraudulently claimed hours.”

The statement of facts also said CHG “knowingly, willfully and with intent to defraud facilitated CHG’s hourly workers routinely getting paid for hours they did not work and combined, conspired and agreed with CHG hourly workers to accomplish the same, all at the sole expense of the citizens of the United States.”

John Corsi, a CH2M Hill spokesman, said in a statement, “It goes without saying that we are very disappointed by the conduct that made the settlement necessary.”

Corsi added, “This conduct was not consistent with CH2M Hill values, but it happened on our watch, and we should have rooted it out sooner.”

Corsi also said, “Since 2008, we have made many important oversight and governance changes in how we monitor and manage time cards and overtime at Hanford to make sure that this does not happen again.” Corsi said the company has cooperated fully with federal officials and will continue to do so.

The Justice Dept. said the CHG time-card fraud was “widespread,” went beyond overtime issues, took place over many years and began before CH2M Hill got the tank-farms contract, according to the statement of facts.

The statement also said “certain members of CHG’s upper management, certain direct supervisors of the hourly workers and certain other supervisory personnel accepted the practice of hourly workers only working until the particular overtime job was completed, leaving Hanford, and falsely claiming a full eight hours even when the job took less than eight hours.”