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Judge signs off on 2-year sentence for ex-CEO behind failed nuclear facility

A South Carolina judge approved a plea deal that sends a former power company executive to prison for two years over the utility’s failure to disclose nuclear project hurdles.

COLUMBIA, S.C. (CN) — A two-year prison sentence for the former CEO of a South Carolina energy company who pleaded guilty to defrauding ratepayers received final approval on Monday from a state circuit judge.

Federal prosecutors say former SCANA Corporation CEO Kevin B. Marsh intentionally misled the public about the status of a failed nuclear reactor project so that the company could increase rates and qualify for up to $2.2 billion in tax credits.

U.S. District Judge Mary Lewis sentenced Marsh last week to two years in federal prison after he pleaded guilty to conspiracy to commit mail and wire fraud.

Marsh urged Spartanburg County Circuit Judge Mark Hayes to approve a plea deal negotiated by state and federal prosecutors and his attorneys that lets him serve two years of a state sentence concurrently with his federal sentence in federal prison.

Hayes told the former CEO during a 38-minute hearing Monday that the number of reporters in the courtroom revealed that this case is much larger than “just a state prosecution of ‘obtaining signature ... by false pretenses.'"

"It’s much larger," the judge said, according to a Myrtle Beach Sun News report.

The ongoing investigation revolves around the failed construction of two nuclear reactors at the V.C. Summer Nuclear Station near Jenkinsville, South Carolina. 

In 2016, Marsh and others were told the project was delayed and that tax credits were at risk, according to the Justice Department. Prosecutors say Marsh withheld that information from regulators to keep the project alive.

“Due to this fraud, an $11 billion nuclear ghost town, paid for by SCANA investors and customers, now sits vacant in Jenkinsville, S.C,”  acting South Carolina U.S. Attorney M. Rhett DeHart said in a statement last week after the federal sentence was handed down. "Hopefully, this prosecution will deter other corporate fraud in the future.”

Marsh was represented in state court Monday by attorney Robert Bolchoz, who contended that his client was repeatedly and intentionally misled by others.

“It took a lot of folks being dishonest to put us all in this courtroom right now,” Bolchoz said after comparing Marsh to a captain of a ship run aground due to the malfeasance of crewmembers.

Referencing the Spider-Man quote “with great power comes great responsibility," state prosecutor Creighton Waters told Hayes that Marsh is responsible for the failures of the company under his watch.

While Marsh may not have intentionally tried to hide the project’s failures at first, Waters said, his lies slowly began to pile up. And conveniently for Marsh, the falsehoods allowed him to maintain his high-paid position in the company, the prosecutor noted.

The project lasted about nine years and never led to the generation of any nuclear power. Over 3,000 construction workers were laid off when the project was abandoned.

U.S. Assistant Attorney Brook Andrews said during sentencing in federal court last week that Marsh lied about a lack of progress on the reactors in the final years of construction. Andrews said that Westinghouse Electric Co., which was the lead contractor to build the new reactors, knew of the problem long before 2016 and failed to tell SCANA executives.

Marsh received a lighter federal sentence, DeHart’s office says, because he had no prior criminal history and has cooperated with federal and state investigators for more than a year in the investigation. 

Hayes signed off on the deal Monday for Marsh to serve only two years of a 10-year state sentence in a federal facility, which are considered to be safer and have better medical care. Marsh will be held in a federal prison in Butner, North Carolina starting in December. 

The original plea bargain required Marsh’s sentencing to wait until the completion of the investigation. But because Marsh’s wife of 46 years was diagnosed with incurable breast cancer, the former CEO requested to speed up the sentencing process and end up in a federal prison with an attached hospital. 

Marsh will be the first executive involved in the project to land behind bars. A second former SCANA executive and an official at Westinghouse have also pleaded guilty in the investigation. Another executive from Westinghouse has been indicted and is awaiting trial.

According to an 87-page Securities and Exchange Commission lawsuit filed against Marsh and another executive last year, the company’s actions took more than $1 billion from the pockets of ratepayers and investors.

After succumbing to debt, SCANA and its subsidiary were bought out by Virginia-based Dominion Energy in 2019. 

Susan Ferensic, special agent in charge of the FBI Columbia Field Office, said in a statement last week that Marsh deceived regulators and customers to financially benefit SCANA. 

 “Unfortunately, Marsh’s and other executive’s actions resulted in South Carolinians bearing the financial brunt of the failed Summer Nuclear Station,” Ferensic said. “This sentence should serve as a reminder to any corporation and their executives that there is a price to pay for those who conspire to commit fraud.”

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