Federal Judge to Decide if Former CEO Who Deceived Investors Will Serve 2 Years in Prison
A federal judge is set to decide on Thursday how much prison time Kevin Marsh, the former CEO for SCANA Corp., will serve for deceiving investors in a failed nuclear plant construction project. Marsh agreed with prosecutors that he should serve two years in prison for the crimes, but the federal judge will decide whether to affirm the deal or offer him a different sentence, the Associated Press reported.
While attempting to build two nuclear plants in South Carolina that never ended up producing a smidge of power, Marsh deceived investors on their progress with inaccurate projections in press releases and calls. Prosecutors said that he wanted the investors to continue funneling money into the project and keep the company's stock price high.
Marsh pleaded guilty in February to conspiracy to commit wire and mail fraud in federal court and obtaining property by false pretenses in state court. He wasn't sentenced while a large-scale federal investigation was still in progress, but lawyers said in court papers that he wants to start serving his time now so he can care for his wife, who has terminal breast cancer.
For more reporting from the Associated Press, see below.
Marsh is the first executive to go to prison for the nuclear debacle. A second former SCANA executive and an official at Westinghouse Electric Co., the lead contractor to build two new reactors at the V.C. Summer plant, have also pleaded guilty. A second Westinghouse executive has been indicted and is awaiting trial.
Prosecutors agreed to Marsh's request to serve his entire sentence on both sets of charges in federal prison.
Marsh already paid $5 million in restitution. SCANA had paid Marsh $5 million in 2017, the year the utility abandoned the hopelessly behind-schedule project in Fairfield County
His actions took more than $1 billion from the pockets of ratepayers and investors, authorities said in an 87-page Securities and Exchange Commission lawsuit filed against them in 2020.
The filing documented the history of the doomed nuclear project, which started in 2008. Marsh never wavered from saying the two reactors being built at the V.C. Summer site north of Columbia would be finished by the end of 2020—a deadline they had to meet if they were going to receive the $1.4 billion in federal tax credits needed to keep the $10 billion project from overwhelming the utility and its minority partner, state-owned Santee Cooper.
"Kevin understands that as Chairman and CEO of SCANA, he bears responsibility for an outcome that no one—least of all Kevin Marsh—wanted to see," defense attorney Derk Van Raalte wrote in court papers that said Marsh spoke to investigators for at least 33 hours to help them unravel the case.
Marsh's attorneys also submitted 10 letters from friends, colleagues and church pastors detailing good acts from helping the family of an employee killed on the job get financial and legal help to securing an air conditioner for a women's home and taking a week out of his busy executive schedule to volunteer for vacation Bible school.
The letters also detailed his relationship with his wife, Sue, who he married when they were both teens. She has terminal and incurable metastatic breast cancer and may not be able to visit her husband in prison because of COVID-19 fears and her weakened condition, defense lawyers said.
Marsh's lawyers said while the two-year prison sentence alone is just and should be a warning to other executives who think about ignoring their responsibilities to investors and ratepayers, Marsh has suffered in several other ways,
"If a similarly-situated executive is not deterred from engaging in fraudulent conduct by the prospect of being subjected to highly-publicized regulatory proceedings, civil litigation, multiyear state and federal criminal investigations, permanent loss of one's career and reputation, a substantial financial penalty and 24 months imprisonment, then it is nearly inconceivable that any term of imprisonment would serve as a deterrent," the lawyers wrote.
