The U.S. Justice Department sued Tetra Tech EC Inc. Monday, accusing the engineering company of submitting false billing claims to the U.S. Navy that were based on falsified soil and building test data in its cleanup of radiation at the former Hunters Point Naval Shipyard in San Francisco.
Federal lawyers on behalf of the Navy filed three new lawsuits in federal court in San Francisco to replace three so-called "whistleblower" lawsuits filed under seal in 2013 and 2016 by several former radiation technicians hired by Tetra Tech subcontractors.
The Justice Department announced in October that it planned to take over the lawsuits this month.
Under the U.S. False Claims Act, private citizens can file fraud lawsuits on behalf of the U.S. If the government decides to take over a case, the original whistleblowers can get a share of the money recovered. The law allows the total recovery to amount to three times the loss caused by false claims.
The government lawsuits allege that those responsible for the fraud are not only two field supervisors, Stephen Rolfe and Justin Hubbard, who were criminally convicted in 2017, but also other higher-level managers, including Tetra Tech President Andrew Bolt.
Other managers named within the lawsuit are former onsite project manager William Dougherty, construction manager Dennis McWade and assistant project manager Rick Weingarz.
"Tetra Tech's fraud was initiated and directed by Tetra Tech's corporate managers, including but not limited to, Bolt, Dougherty, Weingarz, McWade, Rolfe and Hubbard," the lawsuits allege.
While the individual managers are named in the lawsuits, they are not listed as defendants. The defendant in the case is Tetra Tech.
Rolfe and Hubbard pleaded guilty under seal in federal court in San Francisco in 2017 to falsifying records by exchanging, or directing subordinates to exchange, soil samples from potentially contaminated areas for samples from clean areas to submit for laboratory testing.
They were each sentenced last year to eight months in prison.
The company is also alleged to have falsified data on the testing of buildings by submitting the same or virtually the same data on radiological scans for 15 out of 28 buildings.
"The probability that the duplicated strings of data that the Navy discovered could occur by chance or innocent error is extraordinarily low," federal lawyers wrote.
Company spokesman Sam Singer said Tetra Tech "stands by its work at Hunters Point."
"The work performed was thorough, appropriate, and overseen by the Navy and federal, state, and local environmental and health regulatory agencies to ensure compliance and public safety," he said in a statement.
"The misleading claims made by alleged 'whistleblowers' stem from isolated acts by two rogue employees during the 2011-2012 timeframe. Tetra Tech EC immediately conducted an extensive investigation and took a number of corrective actions," Singer said.
U.S. District Judge James Donato will hold a case management conference on the lawsuits on Feb. 28.
The Hunters Point base was operated as a naval shipyard in southeast San Francisco from 1940 to 1974 and is slated to be transferred to the city for redevelopment on a parcel-by-parcel basis as the environmental cleanup is completed.
Possible sources of radiation contamination include the decontamination of ships used in atomic weapons testing, the maintenance of nuclear-powered ships and the former Naval Radiological Defense Laboratory, which did research on animals on the effects of fallout and radiation.
The lawsuits don't give a specific number for alleged financial loss caused to the government, but say the alleged fraud has caused "substantial disruption, uncertainty and delay" in plans to clean up and redevelop Hunters Point.
The costs will include paying another contractor to retest much of the soil and buildings where Tetra Tech worked and recouping "substantial resources" spent to investigate the alleged fraud and "address the health and safety concerns of San Francisco residents," the lawsuits say.