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LG Chem Michigan Inc. has agreed to pay the federal government an additional $1.2 million in penalties to settle false claims allegations while workers were idle during first nine months of 2012. It previously refunded more than $842,000 to the Department of Energy. FILE PHOTO
Holland

The final bill for LG Chem Michigan Inc. in its misappropriation of federal funds used to pay employees while the lithium-ion battery manufacturing plant in Holland remained idle has reached almost $2.1 million.

U.S. Attorney Patrick A. Miles, Jr., announced this morning LGCMI has agreed to pay the federal government $1,231,319 to resolve allegations under the federal False Claims Act that it improperly sought and obtained funds to pay workers engaged in recreational and volunteer activities, according to a statement from the U.S. Department of Justice.

The amount is in addition to the $842,189 LGCMI refunded to the U.S. Department of Energy in January after allegations of employees playing checkers, watching movies and performing community service on company time surfaced.

“Those who receive federal grant funds must deal openly and honestly with the federal government,” Miles said in the prepared statement. “This settlement should send a clear message to our corporate citizens: ‘How you respond to a problem can be as significant as the problem itself.’ "

As part of the settlement, LGCMI admitted no liability on its part of the settlement and the federal government did not make concessions regarding the legitimacy of its claims.

The $303-million plant spanning 600,000 square feet along 48th Street had been constructed in 2010 with the help of more than $150 million in federal stimulus dollars, but it failed to produce any batteries due to sluggish sales of the Chevrolet Volt and Ford Focus EV.

The U.S. government alleged in the first nine months of 2012, prior to LGCMI transitioning battery production from foreign sources to its Michigan plant, the battery maker submitted claims to obtain the federal share of wages and benefits paid to domestic workers engaged in non-work activities. It further alleged that in response to federal inquiries into those activities, LGCMI failed to fully disclose the number of workers taking part in leisure activities, the nature and scope of those activities and the resulting losses to the government.

“We are pleased that this matter, which involved the expenditure of significant unallowable costs by LGCMI, has been settled,” Department of Energy Inspector General Gregory H. Friedman said in a news release.

LGCMI issued a statement Tuesday morning confirming it agreed to the additional penalties.

“In reaching this settlement, LGCMI did not concede or admit liability. LGCMI maintains that any labor costs charged to the Department of Energy during the relevant period of time (Jan. 12, 2012, through Oct. 12, 2012) were incurred by LGCMI in an effort to maintain a qualified workforce in anticipation of  production,” according to its statement.