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Those who might be tempted to think that new nuclear would be safer than old nuclear need to consider construction problems such as substandard concrete and rebar placement which have plagued every new nuclear reactor, which we have examined (Finland, France, at least one in the US). These appear to have been from worker incompetence, rather than fraud per se, although who can know for certain. For the concrete they seem to have been like a cook who doesn’t measure or follow the recipe for bread but adds a little water here or there and the outcome is unknown. This, in fact, resembles the intentionally fraudulent behavior described below. The substandard concrete and poorly placed rebar was for the foundation base of these nuclear reactors. Did they re-do the foundations? No. Finland decided to build a second foundation on top; France patched the cracked foundation, and, if we recall correctly, the US decided to slightly modify the standards (i.e. declaring it ok). Also, there were issues of improperly spaced rebar for all three. In all three instances they were in trouble with the nuclear regulator, which means it was very, very bad. Even back in the hey-day of US Nuclear construction, some US nuclear reactors, which were constructed, never went online as nuclear reactors due to shoddy construction. The quality for nuclear reactors needs to be better and not worse than regular construction due to the additional damage which occurs due to radiation and the extreme dangers of nuclear failures.

How much of the fraud described below for the Big Dig goes on and is not caught? The culprits were hardly punished at all. The profits for this sort of crime appear high, the likelihood of being caught low, and the punishment little.

The convicted Big Dig managers worked for UK based Aggregate Industries, part of the Holcim Group, since 2005. The period covered was 1996-2005. Aggregate Industries headquarters is in Leicestershire, UK [1]

From the US Department of Justice:
Employees of Big Dig Contractor Convicted of Fraud U.S. Attorney’s Office
August 04, 2009

District of Massachusetts

BOSTON, MA—Six former managers of Aggregate Industries N.E., Inc.’s concrete division, the largest asphalt and concrete supply company in New England, were convicted of conspiracy to defraud the United States by a jury in U.S. District Court in Boston late yesterday.

Acting United States Attorney Michael K. Loucks; Theodore L. Doherty III, Special Agent in Charge of the New England Regional Office of the United States Department of Transportation, Office of Inspector General; Warren T. Bamford, Special Agent in Charge of the Federal Bureau of Investigation – Boston Field Division; and Colonel Mark Delaney, Superintendent of the Massachusetts State Police announced today that ROBERT PROSPERI age 64 of Lynnfield, MA, GREGORY A. STEVENSON, age 53 of Furlong, PA, JOHN J. FARRAR, age 43, of Canterbury, CT, MARC BLAIS, age 36 of Lynn, MA were convicted late yesterday of conspiracy and fraud charges following a three week trial in U.S. District Court in Boston. PROSPERI and STEVENSON were convicted of Conspiracy to Commit Highway Project Fraud and Mail Fraud; Conspiracy to Defraud the Government with Respect to Claims; and Making False Statements in Connection with Highway Projects and Mail Fraud. FARRAR was convicted of Conspiracy to Commit Highway Project Fraud and Mail Fraud and Making False Statements in Connection with Highway Projects and Mail Fraud. BLAIS was convicted of Making False Statements in Connection with Highway Projects and Mail Fraud. Codefendants, KEITH H. THOMAS, age 51 of Billerica, MA and GERARD M. MCNALLY, age 54, of Rockland, MA pled guilty prior to trial on July 8, 2009, to Conspiracy to Commit Highway Project Fraud and Mail Fraud; Conspiracy to Defraud the Government with Respect to Claims; and Making False Statements in Connection with Highway Projects and Mail Fraud.

Between 1996 to 2005 PROSPERI, STEVENSON, MCNALLY, BLAIS, FARRAR and THOMAS were all employed in managerial positions in Aggregate’s concrete division. They were charged with highway project fraud and related offenses for their participation in a scheme to provide concrete to Big Dig projects that did not meet contract specifications, and to conceal the true nature of the concrete through false documentation. Between 1996 and 2005 the defendants delivered approximately 5,000 truckloads of non-specification concrete to the Big Dig. Each truckload comprised approximately ten yards of concrete. This concrete included recycled concrete that was over ninety-minutes old, concrete that had been adulterated with the addition of excess water, and concrete that was not batched pursuant to Big Dig project specifications.

The defendants recycled “leftover concrete,” i.e. concrete that had not been used by other customers, mixed the leftover concrete with Big Dig project concrete, and delivered this adulterated concrete to the Project. The leftover loads of mixed concrete were dubbed “10-9 loads” by the defendants, and did not meet Big Dig project specifications. The defendants concealed this fraud by falsifying concrete batch slips delivered to Big Dig inspectors and/or representatives of the general contractors at the various construction sites. These false batch reports were relied upon by the Government to determine the quality and amount of concrete placed by the general contractors on the project.

Big Dig project specifications required that concrete must be placed or poured within ninety minutes of batching. In most instances involving these “10-9 loads,” the concrete had exceeded the ninety minute time limit. In order to conceal the true age of the concrete, the defendants directed truck drivers and other Aggregate employees to add water, as well as other ingredients, to the “10-9 loads” to make those loads appear to be freshly batched. Big Dig project specifications also prohibited the addition of water to concrete after the concrete had been batched except under tightly controlled circumstances. The defendants also directed that fly ash be eliminated from the concrete mix specifications on the occasions when Aggregate Industries ran short of fly ash. Fly ash is an essential ingredient in concrete that makes the it more durable and prevents the infiltration of water.

The defendants face maximum penalties of 20 years’ incarceration on each of the mail fraud counts, 10 years’ incarceration on the conspiracy to make false claims against the United States, and 5 years’ incarceration on the conspiracy to commit highway project fraud and mail fraud count, as well as on each highway project fraud count. Each count also carries a period of 3 years’ of supervised release and a maximum fine of $250,000 fine. The defendants could also face an alternative fine in excess of $10 million which is twice the loss or, in this case, the amount billed to project contractors by Aggregate pursuant to the fraud.

Aggregate Industries N.E., Inc pled guilty in July 2007 and agreed to pay $50 million to the federal and state government, to resolve its criminal and civil liabilities in connection with a fraudulent scheme to deliver adulterated concreted to the Central Artery/Tunnel Project (“Big Dig”). The plea and settlement agreements also required Aggregate provide up to $75 million in insurance coverage for potential future structural maintenance costs related to their conduct. The case was worked jointly with the Massachusetts Attorney General’s Office and included the execution of search warrants obtained by that Office. Evidence obtained in those searches was presented at the federal trial. Acting United States Attorney Michael K. Loucks commented that the joint federal and state collaboration in this investigation was critical to the verdicts achieved.

The case was investigated by the United State Department of Transportation, Office of Inspector General, the Federal Bureau of Investigation and the Massachusetts State Police Assigned to the Massachusetts Attorney General’s Office . It is being prosecuted by Assistant U.S. Attorneys Fred M. Wyshak, Jr., Anthony E. Fuller and Jeffrey M. Cohen of Loucks’ Public Corruption Unit.” http://www.justice.gov/usao-ma http://www. fbi. gov/boston/press-releases/2009/bs080409.htm

Two Former Managers for Big Dig Contractor Sentenced
U.S. Attorney’s Office
May 26, 2010

District of Massachusetts
(617) 748-3100
BOSTON—Two former managers of Aggregate Industries Inc., the largest concrete supplier on the Big Dig project, were sentenced late yesterday in U.S. District Court in Boston. Despite prosecutors’ recommendation of lengthy terms of imprisonment, the Honorable Richard G. Stearns sentenced both men to three years’ probation.

United States Attorney Carmen Ortiz; Theodore L. Doherty III, Special Agent in Charge of the New England Regional Office of the United States Department of Transportation, Office of Inspector General; Warren T. Bamford, Special Agent in Charge of the Federal Bureau of Investigation – Boston Field Division; and Colonel Marian McGovern, Superintendent of the Massachusetts State Police announced that ROBERT PROSPERI, 64 of Lynnfield, Mass. and GREGORY A. STEVENSON, 53 of Furlong, PA, were sentenced to three years’ probation with six months of electronic home monitoring. The defendants were convicted, following a three-week jury trial on August 3, 2009, of 135 felony counts, including Conspiracy to Commit Highway Project Fraud and Mail Fraud; Conspiracy to Defraud the Government with Respect to Claims; and Making False Statements in Connection with Highway Projects and Mail Fraud.

PROSPERI, the former General Manager, and STEVENSON, the former Operations Manager of Aggregate’s Ready Mix Concrete Division, had been found guilty of highway project fraud and related offenses for their participation in a scheme to provide concrete to Big Dig projects that did not meet contract specifications, and to conceal the true nature of the concrete through false documentation. Between 1996 and 2005, Aggregate (under the defendants’ direction) delivered approximately 5,000 truckloads of non-specification concrete to the Big Dig. Each truckload comprised approximately 10 yards of concrete. This concrete included recycled concrete that was over 90-minutes old and had not been used by other customers, concrete that had been adulterated with the addition of excess water, and concrete that was not batched pursuant to Big Dig project specifications.

The leftover loads of mixed concrete were dubbed “10-9 loads” by the defendants, and did not meet Big Dig project specifications. The defendants concealed this fraud by falsifying concrete batch slips delivered to Big Dig inspectors and/or representatives of the general contractors at the various construction sites. These false batch reports were relied upon by the government to determine the quality and amount of concrete placed by the general contractors on the project.

Big Dig project specifications required that concrete must be placed or poured within 90 minutes of batching. In most instances involving these “10-9 loads,” the concrete had exceeded the 90-minute time limit. In order to conceal the true age of the concrete, the defendants directed truck drivers and other Aggregate employees to add water, as well as other ingredients, to the “10-9 loads” to make those loads appear to be freshly batched. Big Dig project specifications also prohibited the addition of water to concrete after the concrete had been batched except under tightly controlled circumstances. The defendants also falsified batch reports to indicate the presence of fly ash when in fact, there was none in the load because Aggregate Industries ran short of fly ash. Fly ash is an essential ingredient in concrete that makes the it more durable and prevents the infiltration of water.

The defendants faced maximum penalties of 20 years’ incarceration on each of the mail fraud counts, 10 years’ incarceration on the conspiracy to make false claims against the United States, and five years’ incarceration on the conspiracy to commit highway project fraud and mail fraud count, as well as on each highway project fraud count. Each count also carried a maximum fine of $250,000 fine. Pursuant to the advisory United States Sentencing Guidelines, which the sentencing court is required to consider, the defendants’ sentencing range was 87 to 108 months’ incarceration based on their leadership roles within Aggregate and the cost of the adulterated concrete they sold to the CA/T.

In a downward departure, the District Court sentenced PROSPERI to three years of probation on each count to run concurrently, six months of electronic home monitoring and 1,000 hours of community service. In addition, the court ordered payment of a $15,000 fine and a $13,500 special assessment representing $100 for each count of conviction. STEVENSON received the same sentence, but with a fine of $5,000.

“The government is disappointed with the sentences in this case, and while it respects the court in this matter, the government does not believe the sentences reflect the seriousness of the offense or serve as a deterrent to others who might engage in similar conduct on public works projects in our commonwealth,” stated United States Attorney Carmen M. Ortiz.

The case was investigated by the United State Department of Transportation, Office of Inspector General, the Federal Bureau of Investigation and the Massachusetts State Police Assigned to the Massachusetts Attorney General’s Office. It was prosecuted by Assistant U.S. Attorneys Fred M. Wyshak, Jr., Anthony E. Fuller and Jeffrey M. Cohen of Ortiz’s Public Corruption Unit.”
http://www.justice.gov/usao-ma http://www. fbi. gov/boston/press-releases/2010/bs052610.htm

Of related interest: http://en.wikipedia.org/wiki/Charbonneau_Commission

[1] http://en.wikipedia.org/wiki/Aggregate_Industries
In 2005, Holcim purchased Aggregate Industries for US$4.1 billion, entering the United Kingdom for the first time.http://en.wikipedia.org/wiki/Holcim

Note regarding new nuclear reactors: The Finnish case is well-documented in English. The French case (Flammanville) was well-documented in English and French. The US information is or was at the US NRC. We think that we read about the new Vogtle reactor, but cannot say for certain if it was Vogtle or another. It may have been for all new US nuclear reactors. The ultimate responsibility falls on the US NRC, so they are guilty for any failings, because they approved them. No one has suggested fraud in these cases but rather incompetence or misunderstandings due, for instance, to multiple languages being spoken on the construction site(s). Nonetheless, one cannot exclude the possibility of fraud. The difference appears to primarily be intent.