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CH2M Agrees to Settle Civil and Criminal Charges for $18.5 Million

Colorado-based CH2M Hill Hanford Group, Inc. (“CH2M”), an engineering services company, has agreed to settle criminal and civil charges regarding alleged time-card fraud. Carl Schroeder, a former employee of CH2M, initially brought suit against CH2M in 2009 under the qui tam provisions of the False Claims Act. The government later intervened.

The government claimed that, between 1999 and 2008, CH2M had a $2.65 billion contract with the Department of Energy for the cleanup of 177 underground storage tanks containing radioactive and hazardous waste located at the Department of Energy’s Hanford Nuclear Site (“Hanford”) in Washington state. Prior to its shutdown, Hanford was the largest producer of plutonium for U.S. nuclear weapons.

The whistleblower alleged that CH2M employees routinely inflated their time-sheets to reflect substantially more hours than they actually worked. According to Schroeder, CH2M condoned the practice and knowingly submitted the falsified time records to the Department of Energy in violation of the False Claims Act.

As part of the settlement, CH2M agreed that it acted knowingly and willingly with intent to defraud the federal government. CH2M agreed to pay $16,550,000 resolve its civil liability under the False Claims Act, refund $1,950,000 in ill-gotten gains, and dedicate $500,000 toward increased oversight at the Hanford clean-up site.

Under the qui tam provisions of the False Claims Act, whistleblowers are typically entitled to receive a percentage of any recovery or settlement as his or her reward. However, any whistleblower who is convicted of criminal conduct for his or her role in the fraud is barred from sharing in the recovery. Because the whistleblower Carl Schroeder pleaded guilty to his role in the fraud, he is not entitled to any share of the settlement amount.