The federal government is suing the Mixed Oxide Fuel Fabrication Facility lead contractor as well as a project subcontractor, accusing both of fraudulent and otherwise illicit financial acts.
The U.S. Department of Justice announced the lawsuit Feb. 14, the same day the 38-page complaint — targeting MOX Services and subcontractor Wise Services — was filed in South Carolina district court.
The suit alleges a total $6.4 million of dishonest claims, spurred by Wise Services, were submitted for repayment by MOX Services. The suit also alleges Wise Services provided cash; gift cards; YETI coolers; Masters, NASCAR and football tickets; phones; car tires; and guns, among other things, to MOX Services officials to gain favorable treatment.
"Wise carefully chose the MOX officials and employees to whom it would improperly reward and pay kickbacks based upon their ability to provide favorable treatment to Wise in the award, modification, and administration of the Wise subcontracts," the complaint reads.
Kickbacks between 2013 and 2014 totaled at least $52,000, according to the complaint.
A Wise Services senior representative, who is named in the Feb. 14 complaint, pleaded guilty to charges of conspiring to commit theft of government funds in 2017, according to the DOJ.
The National Nuclear Security Administration in 1999 contracted MOX Services to design, build and operate MOX at the Savannah River Site. The NNSA terminated the incomplete MOX venture on Oct. 10, 2018.
The MOX contract was cost reimbursable, meaning the government paid MOX Services for costs incurred.
MOX Services utilized subcontractors to do "many" things, according to the complaint. The subcontractors would work and bill MOX Services; those costs would in turn be passed up for reimbursement.
From 2008 to 2016, Wise Services knowingly submitted 484 claims, including forged invoices and fictional costs, to MOX Services for materials that did not exist, according to the complaint. MOX Services submitted 221 illegitimate claims to the NNSA, per the same information.
All 221 were "knowingly false or fraudulent," the complaint reads.
"If NNSA officials had known the truth about the defendants' claims for nonexistent materials," it continues, "NNSA would not have paid the claims."
U.S. Department of Energy Inspector General Teri L. Donaldson on Feb. 14 said accusations of false claims, over-billing and kickbacks are taken "very seriously" and will be "aggressively" investigated.
"Government contractors who line their bank accounts by receiving kickbacks or submitting fraudulent claims undermine the public's trust in government programs and operations," Assistant Attorney General Jody Hunt, representing the DOJ's civil division, said.
In November 2018, MOX Services sued Ohio-based Wise Services. In the complaint, MOX Services said it was "unaware" that Wise Services was submitting inaccurate and inflated claims.
"Consequently, MOX included the Wise Services' invoices in its own vouchers, and submitted them to NNSA for payment," the November 2018 complaint reads.
Wise Services launched a MOX Services counterclaim on Jan. 2, according to court records. Wise Services claimed MOX Services was negligent and mismanaged, among other things.
The DOJ notified MOX Services of its ongoing evaluation and investigation in 2016, according to the prime contractor's complaint.
The federal government has requested a jury trial for its lawsuit and is seeking damages as well as financial penalties.