Tickets to Masters Tournament golf and NASCAR events were among the perks provided to participants in a scam that defrauded the federal government of more than $6 million, the U.S. Justice Department stated in a lawsuit filed against two companies that worked on a now-terminated plutonium-conversion facility at the Savannah River Site in South Carolina.
On Feb. 15, the Justice Department alleged that CB&I AREVA MOX Services and a subcontractor, Wise Services, made $6.4 million in fraudulent claims during construction of the Mixed Oxide Fuel Fabrication Facility (MFFF) at the Department of Energy site. MOX Services was the prime contractor for the plant, while Wise provided construction labor services.
The detailed 38-page complaint was posted online after the initial DOJ announcement.
Wise Services had been on the MOX project since 2008, a year after MOX Services broke ground on the facility. In the complaint, the Justice Department said MOX Services was aware that, from 2008 to 2016, the subcontractor made 484 fraudulent claims to the prime in the form of invoices for nonexistent materials, and added a 3 percent fee to the cost of the materials. MOX Services then submitted 221 of those claims to DOE’s semiautonomous National Nuclear Security Administration (NNSA) for payment.
From 2013 to 2014 alone, Wise Services allegedly kicked back more than $52,000 in various forms to buy the silence of MOX Services employees. Those included sports tickets, cash, YETI coolers, sunglasses, and guns and other hunting supplies. The $6.4 million in alleged claims is separate from the kickbacks. The suit does not list a total number of dollars in kickbacks MOX employees allegedly received.
“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,” Justice Department attorneys wrote in the complaint.
“These things of value from Wise to MOX were kickbacks because they were provided by Wise, a subcontractor, to MOX, a prime contractor, to improperly reward MOX and to obtain favorable treatment from MOX related to the award, modification, and administration of the Wise Subcontracts,” the complaint adds.
The suit names at least seven recipients of these alleged kickbacks, including Joe Yates, a MOX subcontract technical representative. According to the complaint, Yates was supposed to review and approve invoices submitted by Wise. But on multiple occasions, He allegedly signed off on invoices for nonexistent materials. In return, the federal government said he was given car tires, a barbeque grill, a welding machine, and other gifts from Wise Services.
Another alleged recipient, Jamie Morris, was a MOX field electrical superintendent and construction manager who was supposed to confirm the receipt of materials listed in the invoices. But the Justice Department said he also confirmed nonexistent materials and was paid off with University of Alabama football tickets and hotel rooms. “Wise believed that it was necessary to provide these items to Mr. Morris in order to receive favorable contract actions from MOX,” DOJ lawyers wrote in the complaint.
The suit also names: Evelyn Stephens, a MOX subcontract administrator who allegedly was given a TV set and had her car detailed; Jamie Piazza, a subcontract technical representative (STR) who DOJ said was given gift cards and Masters tickets; Emily Weigle, a MOX control account manager whose son and daughter reportedly god work with Wise; Larry Hull, another STR who was allegedly given a firearm; and Ed Najmola, the MOX vice president of construction who was allegedly given cash to purchase beer for MOX golf tournaments and money to buy golf clubs to give away as prizes.
MOX Services and Wise Services 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 from the two companies, or three times the $6.4 million allegedly stolen via false claims. The department is also seeking up to $22,363 for each of the two false claim violation and the same amount for the Anti-Kickback Act violation. The federal agency is further pursuing financial damages accrued through the breach of contract and through the payment by mistake claim, both of which would be determined during the trial.
The Justice Department nor MOX Services are not offering comment on the matter. Wise Services was contacted via phone but did not answer.
