Information Notice 1989-18, Criminal Prosecution of Wrongdoing Committed by Suppliers of Nuclear Products or Services
| ML030300454 | |
| Person / Time | |
|---|---|
| Issue date: | 08/24/1990 |
| From: | Rossi C Office of Nuclear Reactor Regulation |
| To: | |
| Petrosino J | |
| References | |
| IN-89-018, Suppl 1 | |
| Download: ML030300454 (7) | |
UNITED STATES
NUCLEAR REGULATORY COMMISSION
OFFICE OF NUCLEAR REACTOR REGULATION
WASHINGTON, D.C. 20555 August 24, 1990
11RC INFORMATION NOTICE NO. 89-18, SUPPLEMENT 1: CRIMINAL PROSECUTION OF
WRONGDOING COMMITTED BY
SUPPLIFRS OF NUCLEAR PRODUCTS
OR SERVICES
Addressees
All holders of operating licenses or construction permits for nuclear power
reactors.
Purpose
This information notice is intended to inform addressees of the results of the
criminal prosecution of a case of wrongdoing that the NRC referred to the U.S.
Department of Justice (DOJ). This matter was initially identified during a
licensee-performed vendor audit and was subsequently reported to the NRC. This
information notice also reminds licensees and their suppliers of the penalties
that could result from the intentional violation of federal regulatory require
ments and criminal statutes. In particular, both the supplier and individual
employees of the supplier could be subject to criminal prosecution by the DOJ
if they intentionally violate federal regulatory requirements. It is expected
that recipients will review the information notice and consider actions, as
appropriate, to avoid similar problems. However, suggestions contained in this
information notice do not constitute NRC requirements; therefore, no specific
action or written response is required.
Description of Circumstances
On March 29, 1988, the NRC staff received a 10 CFR Part 21 report from the Wolf
Creek Nuclear Operating .Corporation (WCNOC) regarding suspect vendor activities
that WCNOC personnel discovered during a licensee-performed vendor audit.
WCNOC suspected that the owner of Planned Maintenance Systems (PMS), Mr. Rodney
C. Hanner, may have altered a commercial-grade Certificate of Compliance (CoC)
issued by Gould Incorporated, Electric Fuse Division (Gould). The NRC reviewed
the report and referred the issue to its Office of Investigations (01), which
initiated an investigation. During subsequent discussions, Mr. Hanner revealed
that he falsified the Gould commercial-grade CoC to resemble a Class 1E CoC.
The NRC subpoenaed PMS records and from the review of the records identified
numerous concerns regarding NRC-licensed facilities and Department of Energy
(DOE) facilities. The NRC issued Information Notice 88-19, "Questionable
Certification of Class 1E Components," on April 26, 1988, to inform addressees
of questionable certifications of Class 1E components furnished by PMS and
referred those issues concerning DOE facilities to DOE.
9008200150
'I
11 89-18, Supplement 1 August 24, 1990 The NRC performed an inspection on May 16 - 18, 1988, at the PMS facility in Mount
Vernon, Illinois. The DOE staff performed an independent investigation of the
matters that related to its facilities.
As a result of investigations by the two U.S. Government agencies, the matter
was referred to the DOJ and resulted in a Federal Grand Jury indictment of Mr.
Hanner on 44 counts citing violations of Title 18 of the United States Code
(USC), Sections 287, 1001, 1341, 1343 and 1344. These counts included the
following: bank fraud, false claims, mail fraud and making false statements to
the NRC and DOE. Mr. Hanner subsequently pleaded guilty to 12 of the 44 counts
through a "Plea Agreement" accepted by the U.S. District Court, Southern District
of Illinois, on January 8, 1990. On March 12, 1990, Mr. Hanner was sentenced
by a Federal Judge in the U.S. District Court in Benton, Illinois, to a 5-month
term in a Federal Prison, to be followed by a 5-month term of community con
finement to be served at the Substance Abuse Center in Marion, Illinois. Upon
release from confinement, Mr. Hanner will be placed on 4 years of supervised
release and probation. The Federal Judge also ordered that Mr. Hanner make
restitution in the total amount of $125,616.65 to several NRC licensees and DOE
facilities. The Judgment and Commitment Order are enclosed.
Discussion:
Five NRC licensees and two DOE facilities were named in the enclosed Judgment
and Commitment Order to receive restitution from Mr. Hanner (NRC Information
Notices No. 89-18, "Criminal Prosecution of Wrongdoing Committed By Suppliers
of Nuclear Products or Services," and 90-46, "Criminal Prosecution of
Wrongdoing Committed By Suppliers of Molded-Case Circuit Breakers and Related
Componerts," identified other examples of restitution awarded to NRC licensees
from convicticn of vendors). All personnel involved in NRC-regulated activities
(including suppliers and vendors) have a responsibility to comply with applicable
11RC regulatory requirements and other Federal laws. The NRC expects and
demands compliance and will seek criminal prosecution of wrongdoing in cases of
intentional or willful violations of these requirements. As evidenced by the
case described in this information-notice, criminal sanctions may include
imprisonment, fines, restitution of monies, and/or rendering of community
services.
Addressees
may wish to distribute copies of this information notice to their
employees and suppliers.
II 89-18, St ipplement 1 August 24, 1990 This information notice requires no specific action or written response. If
you have any questions about the information in this notice, please contact the
technical or investigatory contacts listed below or the appropriate NRR project
manager.
Vha ssiDirector
Division of Operational Events Assessment
Office of Nuclear Reactor Regulation
Technical Contact:
Jo(seph 0. Petrosino, NRR
01) 492-0979 Investigatory Contact: Virginia VanCleave, OI:RIV
(817) 860-8286 Attachments:
1. U.S. District Court, Southern District of Illinois, Judonent and Commitment Order
2. List of Recently Issued NRC Information Notices
Attachment 1 IN 89-18, Supplement I
August 24, 1990 UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF ILLINOIS
UNITED STATES OF AMERICA, S A#" : 03 Plaintiff, ) 'c
vs. CRIMINAL'NO. 89-40062
)
RODNEY CARTER HANNER, ) Imposition of Sentence
) March 12, 1990
Defendant. )
JUDGMENT AND COMMITMENT ORDER
The defendant pleaded GUILTY to Counts 1, 6, 7, 15, 17, 18, 21, 22,
33, 37, 39 and 44.
Accordingly, the defendant is adjudged guilty of such counts, which
involve the following offenses:
Bank Fraud, 18 U.S.C. 1344, (Count 1);
Making False Statements & Representations to an Agency of the
United States, 18 U.S.C. 1001, (Counts 6, 7, 15, 33 and 39);
Mail Fraud, 18 U.S.C. 1341, (Counts 17, 18, 21, 22 and 37);
Making False Claims against an Agency of the United States, 18 U.S.C. 287, (Count 44).
The sentence is imposed pursuant to the Sentencing Reform Act of
1984.
IT IS ORDERED AND ADJUDGED that as to Counts 18, 33, 37 and 39 of
the indictment, the defendant is hereby committed to the custody
of the U. S. Bureau of Prisons for 'imprisonment for a term of five
(5) months, to be followed by a five (5) month term of community
confinement to be served at the Substance Abuse Center in Marion, Illinois. Upon release from confinement defendant is placed on 3 years supervised release, upon the following special terms and
conditions:
1) that defendant comply with the provisions of Form 7A of the
U. S. Probation Office;
2) that defendant not possess a firearm or any other dangerous
weapon; and
3) that defendant make restitution in the amount of $125,616.65 as follows:
a. As to Count 4 - $6,495.00 to Sacramento Municipal Utility
District, Sacramento, California;
b. As to Count 5 - $4,620.00 to Sacramento Municipal Utility
District, Sacramento, California;
c. As to Counts 6 and 7 - $2,285.50 to Sacramento Municipal
Utility District, Sacramento, California;
d. As to Counts 8 and 10 - $5,388.50 to Sacramento Municipal
Utility District, Sacramento, California;
Attachment 1 IN 89-18, Supplement 1 August 24, 1990 e. As to Count 9 - $6,432.00 to Sacramento Municipal Utility
District, Sacramento, California;
f. As to Counts 11, 12, 13 and 14: $3,250.00, $33,750.00 and
$15,047.50 to Sacramento Municipal Utility District, Sacramento, California;
g. As to Counts 17 and 18 - $1,553.37 and $3,078.63 to
Tennessee Valley Authority, Knoxville, Tennessee; %
h. As to Counts 21 and 22 - $14,615.75 and $75.00 to Tennessee
Valley Authority, Knoxville, Tennessee;
i. As to Count 25 - $2,250.00 to Rochester Gas and Electric
Company, Rochester, New York;
j. As to Count 26 - $3,180.00 to Illinois Power Company, Clinton, Illinois;
k. As to Count 27 - $588.50 to New York Power Authority, Lycoming, New York;
1. As to Count 28 - $4,510.70 to New York Power Authority, Lycoming, New York;
m. As to Count 29 - $525.00 to New York Power Authority, Lycoming, New York;
n. As to Count 37 - $3,371.20 to Knolls Atomic Power
Laboratory, % U. S. Department of Energy, P. 0. Box 40, Bethel
Park, Pennsylvania; and
o. As to Count 44 - $14,600.00 to UNC Nuclear Industries, %
U. S. Department of Energy, P. 0. Box 40, Bethel Park, Pennsylvania.
IT IS FURTHER ORDERED AND ADJUDGED that as to Counts 1, 6, 7, 15,
17, 21, 22 and 44, imposition of sentence is suspended and the
defendant is placed on probation for a period of one (1) year as
to each count, on the same special terms and conditions as imposed
on defendant's term of supervised release.
IT IS FURTHER ORDERED AND ADJUDGED that the probation imposed on
Counts 1, 6, 7, 15, 17, 21, 22 and 44 shall run concurrently with
each other and consecutively to the supervised release imposed on
counts 18, 33, 37 and 39.
IT IS FURTHER ORDERED that defendant shall pay a $600.00 special
assessment pursuant to the Comprehensive Crime control Act of 1984;
IT IS FURTHER ORDERED that the defendant shall voluntarily
surrender to the designated institution as directed by the U. S.
Bureau of Prisons.
IT IS FURTHER ORDERED that Counts 2, 3, 4, 5, 8, 9, 10, 11, 12, 13,
14, 16, 19, 20, 23, 24, 25, 26, 27, 28, 29, 30, 31, 32, 34, 35, 36,
38, 40, 41, 42 and 43 are DISMISSED.
James L. Foreman, Chief Judge
March 15, 1990
CErIiMED TI,UZ C~
-ecd Deputy Clerk
"Date 0
Attachment 2 IN 89-18, Supplement 1 August 24 .1990 LIST OF RECENTLY ISSUED
NRC INFORMATION NOTICES
Information Date of
Notice No. Subject Issuance Issued to
90-53 Potential Failures of 8/16/90 All holders of OLs
Auxiliary Steam Piping and or CPs for nuclear
the Possible Effects on the power reactors.
Operability of Vital Equip
ment
90-52 Retention of Broken 8/14/90 All holders of OLs
Charpy Specimens or CPs for nuclear
power reactors.
90-51 Failures of Voltage-Dropping 8/8/90 All holders of OLs
Resistors in the Power or CPs for nuclear
Supply Circuitry of Electric power reactors.
Governor Systems
90-50 Minimization of Methane 8/8/90 All holders of OLs
Gas in Plant Systems and or CPs for nuclear
Radwaste Shipping Containers power reactors.
90-49 Stress Corrosion Cracking 8/6/90 All holders of OLs
in PWR Steam Generator or CPs for pressurized
Tubes water reactors.
90-48 Enforcement Policy for 8/2/90 All holders of OLs
Hot Particle Exposures or CPs for nuclear
power reactors.
90-47 Unplanned Radiation 7/27/90 All holders of OLs
Exposures to Personnel or CPs for nuclear
Extremities Due to Improper power reactors, holders
Handling of Potentially of licenses for permanently
Highly Radioactive Sources shutdown facilities
with fuel onsite and
research and test reactors.
90-46 Criminal Prosecution of 7/16/90 All holders of OLs
Wrongdoing Committed by or CPs for nuclear
Suppliers of Molded-Case power reactors.
Circuit Breakers and Related
Components
OL = Operating License
CP = Construction Permit
UNITED STATES
FIRST CLASS MAIL
NUCLEAR REGULATORY COMMISSION POSTAGE b FEES PAID
WASHINGTON, D.C. 20555 US"dRC
PERMIT No G S?
OFFICIAL BUSINESS
PENALTY FOR PRIVATE USE. $300