Nukegate CEO Imprisoned for Fraud
The former CEO of failed South Carolina electric and natural gas public utility SCANA Corporation (SCANA) has been sent to federal prison after pleading guilty to conspiracy to commit mail and wire fraud.
Evidence presented to a South Carolina Court showed that 66-year-old Kevin B. Marsh intentionally defrauded rate-payers while overseeing and managing SCANA’s operations.
Marsh made false and materially misleading statements about the progress of the company's building projects so that SCANA could obtain and keep rate increases imposed on its rate-paying customers and qualify for up to $2.2bn in tax credits.
One of the projects impacted by the fraud was the erection of two nuclear reactors at the V.C. Summer Nuclear Station in Fairfield County. Construction on the $10bn project began in 2013 but was abandoned in 2017 after delays and errors caused costs to skyrocket.
Court filings showed that Marsh stuck rigidly to stating that the project would be completed in 2020 and would therefore meet the deadline set to receive $1.4bn in federal tax credits.
Prosecutors detailed how the former CEO and chairman of SCANA's board of directors lied about the progress of the project repeatedly in calls, press releases, and presentations.
“Due to this fraud, an $11 billion nuclear ghost town, paid for by SCANA investors and customers, now sits vacant in Jenkinsville, South Carolina,” said Acting US Attorney Rhett DeHart.
In February, Marsh pleaded guilty to conspiracy to commit wire and mail fraud and to obtaining property by false pretenses. He was sentenced on October 7 to two years in prison followed by three years of supervised release and fined $200K. Marsh has already paid $5m in restitution.
Felony guilty pleas have been obtained from SCANA's former executive vice president Stephen Byrne and from Carl Churchman, former Westinghouse Electric Corporation vice president and the project director of the V.C. Summer Nuclear project.
Jeffrey Benjamin, former Westinghouse Electric Company senior vice president, has been charged in a sixteen-count felony criminal indictment.
Source: Infosecurity Magazine