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Government Intervenes in Qui Tam Action Against Former Department of Energy Contractor

The Department of Justice (“DOJ”) announced that it has intervened in a whistleblower lawsuit against engineering services company CH2M Hill Hanford Group, Inc. (“CH2M”) based in Colorado. The whistleblower, Carl Schroeder, a former employee of CH2M, brought suit against CH2M in 2009 under the qui tam provisions of the False Claims Act.

According to the DOJ, between 1999 and 2008, CH2M had a $2.65 billion contract with the Department of Energy for the cleanup of more than 170 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. Cleanup of Hanford’s hazardous materials is expected to be completed in 2047.

The whistleblower’s complaint alleges that numerous CH2M employees routinely inflated their timesheets 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. According to the DOJ, Schroeder and seven other former CH2M employees have pleaded guilty to fraud in connection with the inflated time records.

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.

The DOJ has already notified the court that it plans to request the dismissal of Schroder as a party in the case based on his role in the alleged fraud.

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