$2.8M False Claims Act Settlement for Retention of Overpayments from Tennessee Valley Authority

Greene LLP announces the $2,800,000 settlement with Bartlett Holdings, Inc. of False Claims Act allegations that it wrongfully retained overpayments from the Tennessee Valley Authority for work expanding a nuclear power plant on the Chickamauga Reservoir in Tennessee. As part of the settlement, Greene LLP’s qui tam whistleblower client will receive $616,000, representing a 22% relator share.

Bartlett was a subcontractor performing professional engineering and other services for the Tennessee Valley Authority’s addition of a second reactor at the Watts Bar Nuclear Plant, paid pursuant to a “cost plus” government procurement contract. The False Claims Act suit alleged that Bartlett was pre-paid for payroll taxes and other estimated costs, but that it failed to return overpayments representing the difference between those estimated costs and the actual payroll taxes and insurance costs paid.

An accountant, the relator was employed by a firm that performed an audit of the Watts Bar project financials. As part of the audit, the relator examined detailed payroll files, and his firm shared the results of his audit in 2012. As alleged in the complaint, the audit concluded that $1,645,574.99 in pre-paid payroll taxes for the year 2010 had not been returned to the TVA as required. By the time the False Claims Act case was filed in May 2014, the relator came to believe that Bartlett had not been required to return the overpayments he had identified.

Because the TVA is a wholly owned government corporation and instrumentality of the United States, wrongful retention of overpayments from it can be actionable under the False Claims Act. As a so-called “reverse false claims” case brought under 31 U.S.C. § 3729(a)(1)(G), the allegations of a violation relied on Bartlett’s affirmative duty as part of its contract to perform regular reconciliations to return anticipated overpayments to the TVA.

“The United States is not a business partner to be trifled with,” said Thomas M. Greene, who represents the relator. “Fraud against any government agency, even one as independent as the Tennessee Valley Authority, can carry stiff penalties—and there’s always someone that knows it’s happened.” The relator was also represented by Michael Tabb, Tucker Greene and Ryan P. Morrison, also of Greene LLP. The work of the TVA Office of Inspector General and the U.S. Attorney’s Office for the Eastern District of Tennessee were instrumental in completing the investigation and effecting settlement, particularly that of Assistant United States Attorney Robert McConkey, and Charles A. Kandt, Counselor to the Office of Inspector General.

Greene LLP is a complex civil litigation firm in Boston of seven attorneys, specializing in representing qui tam whistleblowers in False Claims Act litigation with a low-volume, high-attention approach. Each of the firm’s partners have over twenty years of experience in whistleblower litigation, pioneering innovative theories of recovery and litigating to $1.2 billion in government recoveries, including nearly $500 million for claims for which the government declined to intervene.

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