The U.S. Justice Department on Thursday alleged CB&I AREVA MOX Services submitted $6.4 million in false invoices based on fraudulent claims from a subcontractor while they worked on the Mixed Oxide Fuel Fabrication Facility (MFFF) at the Department of Energy’s Savannah River Site in South Carolina.
Filed on Thursday, the False Claims Act lawsuit says MOX Services from 2008 to 2016 entered into a series of subcontracts with Wise Services while building the now-canceled MFFF.
Wise Services has been providing construction labor services at DOE facilities since 1993 and picked up work at the Savannah River Site in 2008. It received multiple subcontracts from MOX Services over eight years to provide labor, materials, gear, and oversight for labor, plumbing, electrical, and other “unplanned construction activities” at the plant, according to a DOJ press release.
The lawsuit says Phillip Thompson, then the senior site representative for Wise, made false claims for construction materials that did not exist and that MOX Services knowingly submitted $6.4 million in claims to DOE’s semiautonomous National Nuclear Security Administration (NNSA), which managed the MFFF project. Thompson also allegedly provided kickbacks to MOX Services managers with authority over the subcontracts with an eye toward “favorable treatment,” the release says.
The Justice Department filed its case in U.S. District Court for South Carolina. Investigations leading up to the filing were conducted by the Commercial Litigation Branch of the Justice Department’s Civil Division, the U.S. Attorney’s Office for the District of South Carolina, and the Energy Department’s Office of Inspector General.
Thompson is currently serving 23 months in prison after pleading guilty in 2017 to theft of $4.5 million in government funds. He and his partner in the scheme, Aaron Vennefron, admitted they falsified invoices for unspecified materials they were supposed to purchase for the MOX project. Vennefron was the owner of AV Security, and was hired in 2010 to provide security goods and services at MOX.
Vennefron is serving 366 days in prison. Both men were ordered upon sentencing to immediately pay a $100 special assessment and $1.6 million in restitution. They will also be placed under three years of supervised release upon release.
It was unclear at deadline if the $4.5 million from the previous case is connected to the $6.4 million the Justice Department cited in the new suit.
MOX Services and Wise did not respond by deadline Friday for Nuclear Security & Deterrence Monitor to queries about the lawsuit.
The Mixed Oxide Fuel Fabrication Facility was being built to meet the terms of a U.S.-Russian nonproliferation agreement by converting 34 metric tons of weapon-usable plutonium into commercial nuclear fuel. CB&I was hired in 2007 to design, build, and operate the facility. The Department of Energy spent about $5 billion on the project before finally pulling the plug in October, saying the life-cycle cost of the project had tripled from its original $17 billion estimate.
The Energy Department plans to use an alternate “dilute and dispose” method for the 34 metric tons of plutonium and to convert the MFFF into a plant for production of fissile cores for nuclear warheads.
