Former SCANA CEO pleads guilty to federal fraud charges

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Former SCANA Corp. CEO Kevin Marsh pleaded guilty today in federal court to conspiracy to commit mail and wire fraud.

Marsh, the second SCANA executive to plead guilty to fraud charges, will be sentenced once a sentencing report has been reviewed, according to a news release from U.S. Attorney Peter M. McCoy Jr. Marsh faces up to five years in prison and a fine of up to $250,000.

With the guilty plea, Marsh admits intentionally defrauding ratepayers while overseeing SCANA operations, including the failed twin reactor project at the V.C. Summer nuclear power station, so that SCANA could obtain and retain rate increases and qualify for up to $2.2 billion in tax credits, according to the release.

“Every day, this office protects South Carolinians from criminals of all types,” McCoy said in the release.  “Our office will always seek justice for those victimized by individuals or entities that misuse positions of trust and responsibility. Today’s plea shows that no one, not even a Fortune 500 CEO, is above the law.”

U.S. District Judge Mary G. Lewis accepted the plea at the Matthew J. Perry Federal Courthouse at 901 Richland Street.

In December 2020, Stephen Byrne, former SCANA executive vice president, pleaded guilty to conspiracy to commit mail and wire fraud.  

In July 2017, the V.C. Summer nuclear project, co-owned by SCANA subsidiary S.C. Electric & Gas and Santee Cooper, was abandoned in the wake of mounting delays and rising costs after more than $9 billion had been spent on its construction. SCANA and SCE&G settled a Securities and Exchange Commission lawsuit charging the companies with defrauding investors in November 2020 and settled a lawsuit with SCE&G ratepayers for $2.2 billion in November 2018.

SCANA was acquired by Dominion Energy in a $14.6 billion deal approved by the S.C. Public Service Commission in December 2018.

SCANA asked for and received approval for nine rate increases from state regulators during the reactors’ construction. Company executives are alleged to have hidden damaging information about the project’s problems.

“Today’s plea is another step in bringing to justice those individuals responsible for this vast and audacious fraud that impacted so many people throughout South Carolina and beyond,” said FBI Special Agent in Charge Susan Ferensic.  “The FBI’s work is not done, however.  We will see this case through while we continue to fulfill our mission to investigate and hold accountable those who seek to commit mass fraud and theft.”

According to the release, Marsh knew in 2016 that efforts by V.C. Summer contractor Westinghouse to improve product pace and productivity were “woefully inadequate.” He learned that at least one reactor was in “grave jeopardy” of not being completed by Dec. 31, 2020, then the deadline for SCANA to secure federal nuclear production tax credits valued up to $2.2 billion.

“With this specific knowledge, using both wires and mail, Marsh conspired with others to defraud customers with misleading statements and omissions,” the district attorney’s statement said.  “This includes concealing the truthful status of the failing mega-project and making false and materially misleading statements in late 2016 to the South Carolina Public Service Commission (PSC), the Office of Regulatory Staff (ORS), the financial community and the general public.” 

In the plea agreement, Marsh agreed to cooperate with federal, state, and local law enforcement agencies and to testify before any grand juries until the investigation stemming from the V.C. Summer debacle is complete. Additionally, prosecutors and Marsh recommended a five million dollar forfeiture.

Assistant United States Attorneys Jim May, Brook Andrews, Winston Holliday, and Emily Limehouse are prosecuting the case in federal court, along with Special Assistant United States Attorney John O’Halloran.