Former Hanford Supervisor Sentenced in Time Card Fraud Case
WC Monitor
4/17/2015
A former Hanford supervisor was sentenced this week to 30 days incarceration, three months of home detention and a fine of $34,146 after pleading guilty to timecard fraud. Daniel Niebuhr was the first defendant to be sentenced in Hanford cases related to timecard fraud after an investigation that lasted for years. Most of the remaining 10 defendants who pleaded guilty are hourly workers. Niebuhr was scheduled to go to trial with four other Hanford field work supervisors, also called a person in charge or PIC, last fall. He changed his plea to guilty just days before the trial. The other four PICs were acquitted of all charges by a jury. After that, the Department of Justice dropped criminal charges against four other former or current Hanford supervisors or managers who were indicted with Niebuhr.
The federal sentencing range calculated for Niebuhr and accepted by the prosecution and the defense in the plea agreement was eight to 14 months incarceration. But the Department of Justice asked the judge for just one month incarceration followed by seven months of home detention. “It is a lenient recommendation within an already lenient plea agreement,” said Tyler Tornabene, assistant U.S. attorney.
Judge Edward Shea of Eastern Washington District U.S. Court said he was surprised that the Department of Justice reduced its recommendation but that the outcome of the trial for other defendants and the dropped charges may have played a role in the decision. Niebuhr’s crime was one of omission, the judge said. Niebuhr admitted he knew there was a high probability of timecard fraud occurring at the Hanford tank farms, the judge said. “Let there be no doubt about it, this is a serious offense,” Shea said. He acknowledged that Niebuhr was a good human being, but said he was not the first good person to admit to a felony in his courtroom.
CH2M Paid $18.5 Million Fine to Settle Allegations
The fraud occurred under CH2M Hill Hanford Group, which held the Hanford tank farm contract from fall 1999 to fall 2008. CH2M agreed in spring 2013 to pay $18.5 million to settle civil and criminal allegations of defrauding taxpayers through widespread timecard fraud at Hanford. Workers would only take overtime shifts if they were called out in eight-hour blocks, according to court documents. When the overtime work was completed in less than eight hours, the workers would go home but claim a full eight hours of overtime.
As a PIC, Niebuhr did not approve timecards. But he did obtain full shift overtime offers for the workers he supervised and then determined when the job was completed and workers could leave the job site, according to court documents. Niebuhr told his workers they could go home when the job was completed, but he did not say they could claim time not worked on their timecards, according to his attorney, Brian Hershman. “My client accepted responsibility for wrongly relying on professionals to do their job,” Hershman said. Niebuhr was not working on the few days that witnesses, cooperating with the prosecution in exchange for leniency in their own cases, accused him of specific incidents of condoning timecard fraud, Hershman said. He said he regretted that Niebuhr took the plea deal. It was a matter of Niebuhr and his family weighing the possible prison sentence he could face if a jury found him guilty or the huge costs he could face, Hershman said. Some defendants feared that the federal government could take civil action against them in addition to criminal charges.
Niebuhr told the judge that the prosecution had tried to intimidate him. He said he was too immersed in his difficult supervisory job at Hanford, with impossible tasks and too few staff, to recognize his other responsibilities to report possible fraud. He cited instructions in the trial of other PICs that told jurors to consider whether the PICs should have known a probability of a crime being committed as playing a role in his decision to change his plea.
Niebuhr’s attorney submitted more than 100 pages of letters from friends, his former coworkers and fellow church members testifying to Niebuhr’s good character. When Niebuhr was living in the parsonage of Redeemer Lutheran Church, he took in a homeless 19-year-old and taught him skills that ranged from working hard to how to knot a tie for an appearance in traffic court. Until Niebuhr pleaded guilty and was fired from his Hanford job in 2014, he led efforts to provide Christmas gifts for 200 children. He also helped The Arc with its activities for developmentally disabled clients, helped with its building assessment and built a rapport with its clients. He has served as the music director for his church and led work on its building programs. He would often volunteer to run the sound system at civic and charitable events and would play taps at funerals for veterans, according to the letters of support. His attorney asked that Niebuhr be given no prison or jail time. He has already lost his Hanford job and taken a lower paying job with less responsibility. He had to pay legal costs from his retirement account, Hershman said.
Niebuhr Caught in Culture of Fraud, Prosecutor Says
The prosecution said Niebuhr pleaded guilty to more than relying on the professionals he supervised to do their jobs. He pleaded guilty to knowingly advancing a timecard fraud conspiracy, it argued. He initially told investigators he did not know that workers were submitting false timecards, but later admitted his awareness of the high probability that the workers he supervised were obtaining payment for overtime hours they did not work, according to the prosecution. Niebuhr is a law-abiding citizen, but was caught in a culture of fraud at Hanford and initially lied about it, Tornabene said. Niebuhr declined to cooperate with the prosecution after changing his plea. “Whether or not the verdicts against his fellow PICs would have been different had he cooperated will never be known,” the prosecution said in a court document.
The federal government has very aggressively pursued and litigated the timecard fraud matter, which was appropriate, Shea said. There may have been a culture of widespread fraud at the Hanford tank farms, but there were people who did not take money for time they did not work, he said. Those people are more reflective of Hanford workers, he said. “I’ve given a lot of thought to what would be a fair sentence,” the judge said. It was a serious offense, but there is no question that Niebuhr will not re-offend. There also is no issue of protecting the public. Niebuhr found himself in a circumstance in which he did not look when he should have looked, the judge said.
Shea will recommend that the 30-day sentence he imposed be served at a minimum security federal prison camp, although the decision on where Niebuhr will be sent will be up to the federal Bureau of Prisons. The three-month home detention will be served without electronic monitoring after his imprisonment. That will be followed by one year of supervised release. “It has been a difficult day for Mr. Niebuhr. I know people who care about you are anguished for you,” Shea said. “You’ve paid a horrific price for what you did.”
