A federal judge last week rejected a request to dismiss the government’s February 2019 fraud lawsuit against a former contractor and subcontractor for the Department of Energy’s never-completed plutonium recycling plant at the Savannah River Site in South Carolina.
Project prime MOX Services and subcontractor Wise Services failed to explain why the case should be thrown out, Judge Terry L. Wooten, of U.S. District Court for South Carolina, wrote in denying the motion for dismissal.
The case is scheduled for trial on Feb. 1, 2021.
In a February 2019 lawsuit, the Department of Justice alleged MOX Services and Wise Services conspired to file $6.4 million worth of fraudulent claims while working on the Mixed Oxide Fuel Fabrication Facility (MFFF) at the 310-square-mile DOE facility near Aiken, S.C. Wise Services had been providing construction labor services for the project since 2008, a year after MOX Services broke ground.
The federal government says the companies violated the Anti-Kickback Act, a federal statute that prohibits the exchange of valuables for services.
In the complaint, the Justice Department said MOX Services was aware that, from 2008 to 2016, its subcontractor was filing fraudulent claims for reimbursement. Wise Services used cash, tickets to NASCAR races and other sports events, and other goods as payoffs for MOX Services employees who filed false invoices for non-existent items, the Justice Department wrote in its lawsuit.
“The MOX personnel receiving kickbacks from Wise also knew that no one at MOX was confirming that the claimed materials actually existed, had been delivered to the SRS, or were needed for the MOX Project,” the Justice Department said.
The companies have been charged with two counts of committing fraud against the federal government, a civil penalty by violating the Anti-Kickback Act, and one count of payment by mistake. MOX Services was separately charged with breach of contract, and Wise with unjust enrichment.
The Justice Department is seeking $19.2 million, three times the $6.4 million allegedly stolen via false claims. The federal government is also seeking up to $22,363 for each of the two alleged false claim violations, and the same amount for the Anti-Kickback Act violation. In addition, it is pursuing financial damages accrued through the breach of contract and through the payment by mistake claims, both of which would be determined during trial.
Both parties have denied the claims, with MOX Services stating Wise should have made sure it was providing accurate invoices. Wise has argued that one rogue employee caused the issue, and that the entire company should not take the blame.
Wooten denied the companies’ motion for dismissal, saying the initial complaint used sound reasoning and facts to support the case.
A scheduling order also filed on March 11 has the two sides meeting for a conference on March 31 to further discuss the case’s schedule. By June 9, the Justice Department must submit a contact information for anyone who may be called as an expert witness.
MOX Services and Wise must do the same by July 9. Discovery, the fact-finding portion of a case, must be completed by Nov. 18, followed by mediation no later than Dec. 31. Finally, jury selection and the trial are scheduled to begin by Feb 1, 2021.
However, the U.S. District Court for South Carolina on Monday issued a new scheduling order after President Donald Trump issued a national health emergency in response to the outbreak of novel coronavirus 2019. That includes a 21-day extension on all deadlines in civil cases.
In October 2018, the Energy Department formally canceled construction of the Mixed Oxide Fuel Fabrication Facility, which was intended to convert 34 metric tons of plutonium into fuel for nuclear power plants. The agency now intends to convert the material into a form safe for permanent disposal at the Waste Isolation Pilot Plant in New Mexico. It is using the bones of the MFFF to build a plant for manufacturing the plutonium cores of nuclear weapons.
