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The Ministry of Justice sues the Hanford core contractor for fraud



The Justice Department filed a civil lawsuit on Friday against Hanford's contractor Mission Support Alliance, accusing it of deceiving the federal government out of tens of millions of taxpayers.

Also mentioned in the lawsuit is former Mission Support Alliance President Frank Armijo, Lockheed Martin Corp. and Lockheed Martin Services Inc.

"We disagree with the claims of the Ministry of Justice that the MSA or its employees have engaged in some errors," said the Mission Support Alliance in a statement Friday. "We look forward to presenting a strong defense in this matter."

Lockheed Martin also said it categorically denied the allegations against it and Armijo.

Mission Support Alliance (MSA), now owned by Leidos and Centerra Group, has a 10-year contract valued at 3, $ 2 billion to provide services across the Hanford nuclear reserve. Services include security, fire protection, tools and information technology.

The Ministry of Justice accuses the Mission Support Alliance of using half-truths, omissions, setbacks and direct lies before the purchase of Leidos to get the Ministry of Energy to consent to a $ 232 million subcontractor to a company to which it had ownership links.

Lockheed Martin Corp. was the main shareholder of the Mission Support Alliance in 2010, when the Mission Support Alliance awarded a subcontract for information services at Hanford to Lockheed Martin Services Inc.

The lawsuit claims that from 2010 to 2015, the defendant's misrepresented billing rate charged the DOE, the effort estimated to be necessary to complete the work and the expected additional profit for the subcontractor.

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The nuclear reservation at the Hanford Quarter of 580 square kilometers is contaminated by the earlier production of plutonium for the nation's nuclear program

Courtesy Department of Energy

"Defendant fraud allowed them to achieve grossly inflated and improperly subcontracted profits," the Justice Department said in a press release.

The case law said that payment rate estimates were inflated in some cases by basing them on far more employees to perform work than Lockheed Martin Services Inc. included in their internal budget.

In some cases, the DOE was billed by both the Mission Support Alliance and Lockheed Martin Services Inc. for the same work, so

Grossly inflated pricing claims

The profit paid for the Lockheed Martin Services Inc. work was in addition to the money Lockheed Martin Corp. already earned the same work through its partial ownership of the Mission Support Alliance, according to the Ministry of Justice.

DOE repeatedly repeated that the subcontractor, Lockheed Martin Services Inc., could not earn prof it on top of what the owner already paid through the Mission Support Alliance, the case said.

Armijo, and Rich Olsen, chief finance officer of the Mission Support Alliance, also worked on behalf of Lockheed Martin Corp. and abused their positions at Hanford to help Lockheed Martin Corp. achieve grossly inflated price, the Ministry of Justice claimed.

In addition to earning at times like the Mission Support Alliance president, Armijo was also a vice-president of Lockheed Martin Corp., the lawsuits said.

Hanford officials allegedly paid repayments

The Ministry of Justice said some employees, including Armijo, told DOE that the subcontractor's pricing did not include any additional subcontracting profits for the same work as Lockheed Martin Corp.. already had profits by being owned by the Mission Support Alliance.

The million dollars that Armijo and other employees were paid in cash and shares as part of an incentive program were repayments for improper use of their Mission Support Alliance positions to provide favorable treatment for Lockheed Martin Corp., the Justice Department said.

Olsen paid $ 124,4040 in August to settle his responsibilities and agreed to cooperate in the federal investigation.

identified the possibility of fraud to the DOE Office of the Inspector General and the Ministry of Justice, said Joe Franco, vice president of Hanford DOE Richland Operations Office.

"DOE will not tolerate the fraudulent conduct of its contractors and will continue to strengthen its federal oversight at Hanford," he said in a statement.

DOE earlier said that the Mission Support Alliance mistakenly awarded $ 63.5 million in taxpayers' money as a profit to Lockheed Martin Services Inc.

The Justice Department asks the federal court to award triple damages and penalties under federal False Criminal Law, plus civil penalties according to the US Anti-Kickback Act.

It also claims breach of contract, unfair enrichment and the Department of Energy Payment by mistake.

MSA, Lockheed denies claims

"Fraud, corruption and self-trading in Hanford will simply not be tolerated," he said. Joseph Harrington, US Attorney for the Eastern District of Washington, in a statement.

Lockheed Martin said it rejected the suggestion that the company or Armijo engaged in some misdemeanors.

"Lockheed Martin will defend this case vigorously" said.

The Mission Support Alliance said that ethical business behavior is one of the main features and that it is committed to integrity and compliance at all levels of the company.

"As always, we are behind our team of incredible employees who carry out extraordinary work supporting the Hanford mission," the contractor said.

Leidos acquired a stake in MSA after the time period of the lawsuit, Melissa Lee Koskovi ch, senior vice president of Leidos.

Leidos has worked with other MSA members to implement a new management structure and management team, she said.

It has gone through the matter carefully and "we agree with the MSA that the case is The claims are completely out of place profit, and we support the solidarity of MSA's robust defense of this matter, Koskovich says.


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