Friday, March 29, 2013

Contractor Employees Indicted for Timekeeping Fraud

In a case surely to grab a lot of people’s attention and become a case study in contractor and employee ethics, a Federal Grand Jury indicted 10 current or former upper managers and supervisors at Hanford’s nuclear clean-up site, accusing them of enabling timecard fraud (reported by the Tri-City Herald).

One Vice President was indicted on 34 counts, including conspiracy, submission of false claims, major fraud against the United States, wire fraud, violation of the anti-kickback act, and document alteration. A director of the contractor was indicted on 32 counts, a manager was indicted on 34 counts and two supervisors were indicted on 34 counts each. Five other “field” supervisors were indicted on 34 counts each (and also charged with claiming overtime pay for hours they did not work).

Earlier this month, the contractor, CH2M Hill paid $18.5 million back to the Government to settle civil and criminal allegations related to this particular timecard fraud. Now the Government is going after individuals.
In this case, overtime was voluntary but in order to get workers to volunteer for overtime, the contractor promised them eight hour shifts regardless of how long it took to perform the actual work. Additionally, timecard fraud occurred during regular shifts when it was noted that a “steady stream of workers” began leaving work at 2:30 p.m. for shifts that should have lasted until 4:30 p.m.

Typically in cases involving timekeeping irregularities, the contractor pays back some money and perhaps gets suspended or debarred for a short period from new Government contracts. In this case, contractor employees are going to find out firsthand the cost of playing loose with the rules and contravening internal controls.

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