A former safety manager of the Shaw Group has been sentenced to 78 months in prison for deliberately falsifying records of workplace injuries. Shaw, formerly Stone and Webster Construction, held a contract for construction services at several TVA facilities, and used the false injury reports to claim bonuses of more than $2.5 million under the contract.

Walter Cardin, 55, of Metairie, La., was convicted in November 2012, after being charged by a federal grand jury with eight counts of major fraud against the Tennessee Valley Authority (TVA).

False injury rates resulted in $2.5 million in safety bonuses

The indictment and subsequent conviction of Cardin was the result of a six-year investigation conducted by the TVA-Office of Inspector General (TVA-OIG). The trial revealed that Cardin, as safety manager at TVA’s Brown’s Ferry Nuclear site in Athens, Ala., provided false and misleading information about injuries at that facility as well as TVA’s Sequoyah Nuclear site in Soddy Daisy, Tenn., and TVA’s Watts Bar Nuclear site near Spring City, Tenn. The Shaw Group had a contract with TVA to provide maintenance and modifications to the three facilities and to provide construction for the Brown’s Ferry Unit Number 1 reactor restart. Cardin generated false injury rates which were used by the Shaw Group to collect safety bonuses of over $2.5 million from TVA.

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.

Broken bones, torn ligaments and more

"This case shows the destructive consequences that purely rate-based incentive programs can have,” said Dr. David Michaels, head of OSHA. “Far from promoting safety, the bonus led to a systematic effort to conceal injures. Injured workers were denied or delayed medical treatment. Underlying workplace safety issues went unaddressed.”

The evidence presented at trial encompassed over 80 injuries, including broken bones, torn ligaments, hernias, lacerations, and shoulder, back, and knee injuries that were not properly recorded by Cardin. Some employees testified that they were denied or delayed proper medical treatment as a result of Cardin’s fraud. Evidence showed that Cardin intentionally misrepresented or simply lied about how the injuries had occurred and how serious the injuries were.

Incriminating emails found in desk drawers

The federal judge hearing the case imposed a more severe sentence for Cardin after he found that he had obstructed justice when he testified falsely during the trial. At trial Cardin denied intentionally misclassifying injuries, disputing the evidence to the contrary in the medical records and from injured employees. Cardin also denied knowing that safety bonuses were tied to his classifications of the injuries. Investigators found emails sent by Cardin with this information and additional information tying the safety bonuses to the injury rates in Cardin’s desk drawers.