The government has joined a False Claims Act lawsuit against Energy & Process Corporation (E&P), which was filed by whistleblower Deborah Cook. According to the qui tam (False Claims Act whistleblower) lawsuit, E&P supplied defective reinforcement bar (rebar) for the construction of a nuclear processing facility in the Department of Energy’s Savannah River site in South Carolina.
Georgia-based E&P received millions of dollars from the federal government to perform critical safety work on rebar that was used to build the Savannah River Site facility, also known as the MOX Facility, which was designed to process nuclear waste. As the lawsuit states, because of the hazardous nature of the radioactive material, the facility was “required to be built to withstand earthquakes.”
Whistleblower Deborah Cook Exposes: Cheap Rebar with False Quality Assurance Certificates for MOX Nuclear Site
One of the critical points of the facility’s safety was the nuclear construction-grade rebar for which E&P was responsible. The company billed the government for the required materials, but the lawsuit claims that it supplied only commercial-grade rebar, albeit accompanied by false quality assurance certificates.
The government’s intervention comes as excellent news for whistleblower Deborah Cook, who originally filed the lawsuit on December 4, 2013. Cook was once a procurement and subcontract specialist employed by the prime contractor involved in the alleged scheme.
Much as any whistleblower who possesses information regarding fraud against the government, Cook was able to file the lawsuit under the False Claims Act and is entitled to receive between 15 and 30% of any recovered damages. In Ms. Cook’s case, the whistleblower reward is likely to be substantial.
Allegations: Energy & Process Corporation Risks Nuclear Accidents w/Cheap Materials
E&P’s contract to supply nuclear construction-grade rebar amounted to $11.5 million. While the government paid $3,400 per ton of material, the lawsuit alleges that the rebar provided was made of commercial grade steel and cost about $750 per ton at the time. Thus, according to the allegations, E&P not only defrauded the government and put the facility at a heightened risk of nuclear accidents, but it also charged nearly five times the market value of the materials it actually supplied.
According to the lawsuit, “to conceal its scheme, with each shipment of rebar, E&P sent a Certification of Conformance/Compliance, in which E&P explicitly and falsely certified that the rebar complied with the quality assurance requirements.”
When news of the government joining the lawsuit became public, Denise Vaughn, a spokesperson for E&P commented, “We are very disappointed to learn of the filing. We deny any wrongdoing, and look forward to presenting our case.”
False Claims Act lawsuits are filed under seal, meaning in secret, while law enforcement investigates the allegations. The government can either then recommend against the case, let the whistleblower continue to prosecute on their own, or “intervene” which means take over the case which they do when they feel the case has substantial merit.
Lawsuit: E&P Intentionally Failed…Quality Control…Then Concealed...
John Horn, U.S. Attorney of the Northern District of Georgia, where the United States’ Complaint in Intervention was filed, emphasized the government’s determination to hold E&P accountable if the lawsuit’s claims are substantiated, “To ensure that the nuclear facility would be safe, the government paid E&P a sizable premium for exhaustive quality control procedures.This lawsuit alleges that E&P intentionally failed to perform the quality control work, and then concealed its failing by providing false certifications to the government. In intervening in this lawsuit, the U.S. Attorney’s Office seeks to ensure that entities that defraud the government are identified and held responsible.”
Without the valuable assistance of whistleblowers, many types of government fraud, such as the ones alleged in the lawsuit against E&P, would be nearly impossible to detect.
Besides offering substantial rewards, the government provides willing whistleblowers with much needed protections against retaliation from employers.