ISHN

Contractor falsified safety, health records in order to collect bonuses

December 26, 2012

gavelA contractor working at Tennessee Valley Authority nuclear power plants has been found guilty of falsifying safety records in order to collect more than $2.5 million in safety bonuses.

Following a 12-day trial in U.S. District Court in Chattanooga, TN, a jury convicted 55-year-old Walter Cardin of Metairie, LA, a safety manager of The Shaw Group (formerly Stone & Webster Construction), guilty of eight counts of major fraud.

The jury heard evidence that Cardin provided false and misleading information at three TVA facilities about more than 80 injuries, including broken bones, torn ligaments, hernias, lacerations, and shoulder, back, and knee injuries.

The bonuses were paid for meeting certain performance goals, including one tied to worker safety, which was determined by workplace injury rates as well as the total number of injuries at each of the three nuclear facilities. When workers' injuries jeopardized the bonuses, Cardin fraudulently misclassified them as nonrecordable, non-lost-time, and non-work-related incidents. OSHA cited the company in 2007, made a referral to the Department of Justice, and provided key witness testimony in the DOJ case.

As part of a civil agreement filed with the United States in 2008, the Shaw Group paid back twice the amount of the ill-gotten safety bonuses.

Cardin will be sentenced Feb. 21, 2013, in U.S. District Court in Chattanooga; he faces a sentence of up to 10 years in prison and a fine of up to $1,000,0000 for each offense.

The Shaw Group’s Stone & Webster Construction subsidiary agreed to pay the federal government $6.2 million to end the contract fraud investigation related to work at Tennessee Valley Authority (TVA) nuclear plants in East Tennessee and Alabama. Stone & Webster has a 10-year, $1 billion dollar-plus contract to provide modification and maintenance services for the TVA, the nation's largest public utility. The government alleged that during the period from 2003 through 2006, Stone & Webster failed to maintain required logs and provided false reports to TVA that misclassified and understated the number and severity of employee injuries in support of its claims for safety-related performance fees