The former CEO of a regulated electric and natural gas public utility in South Carolina is due to plead guilty today in federal court to conspiracy to commit mail and wire fraud.
Kevin B. Marsh is the ex-CEO of SCANA Corporation and former chairman of its board of directors. The Cayce-based company, which was the only Fortune 500 company in South Carolina, merged with Dominion Energy in January 2019 after an incident known as the Nukegate scandal caused its stock price to tumble.
The scandal arose after the company and its subsidiary SCE&G allegedly defrauded investors by making false and misleading statements about the Virgil C. Summer nuclear expansion project.
Under the project, SCANA and SCE&G collectively invested $9bn into the construction of two nuclear reactors in Fairfield County from 2008 to 2017. Construction began in 2013 but was ultimately abandoned after delays and errors drove the cost up to $25bn.
To pay for the construction, the companies used a state law that allows utilities to raise consumers’ electricity rates. Ratepayers continued to pay increased rates for the expansion despite its termination.
In February 2020, the Securities and Exchange Commission filed a complaint alleging that SCANA, SCE&G, Kevin Marsh, and former executive vice president Stephen Byrne misled investors by claiming that the nuclear construction project would qualify the company for more than $1bn in tax credits when in reality the project was far behind schedule and therefore unlikely to qualify for the tax credits.
Without admitting or denying the allegations, in December 2020 SCANA and SCE&G agreed to a permanent injunction and to pay $112.5m in disgorgement plus prejudgment interest. SCANA also agreed to pay a $25m penalty.
“Shareholders were deceived by SCANA and robbed of millions upon millions of dollars,” said US Attorney Peter McCoy. “I am hopeful that, along with the criminal charges brought forward by our office, this multimillion dollar civil fine and penalty shows that no person or organization is above the law.”
Byrne pled guilty in federal court in July 2020 to conspiracy to commit mail and wire fraud under a plea agreement requiring him to cooperate with law enforcement officials.