California Software Company Executives Charged In Conspiracy To Defraud The Tennessee Valley Authority

Department of Justice

U.S. Attorney’s Office

Middle District of Tennessee

FOR IMMEDIATE RELEASE

Monday, September 13, 2021

California Software Company Executives Charged In Conspiracy To Defraud The Tennessee Valley Authority

Company Allegedly Sought More Than $300,000 in Fraudulent Incentive Payments from TVA Through Software Installation in Rutherford County Schools

NASHVILLE – A seven-count indictment unsealed Friday charged two Danville, California men with conspiracy to defraud the Tennessee Valley Authority (TVA) of more than $300,000, announced Acting U.S. Attorney Mary Jane Stewart for the Middle District of Tennessee.

Anthony Gigliotti, 74, the CEO of Autonomic Software, Inc., (Autonomic) was charged with conspiracy to commit wire fraud, three counts of mail fraud, and three counts of wire fraud. Alexander Gigliotti, 36, the Vice President of Autonomic, was charged with conspiracy to commit wire fraud. Both were arrested by U.S. Marshals in Danville, California on Friday and will appear in the Middle District of Tennessee at a later date for further proceedings.

According to the indictment, Autonomic was a software company located in Danville, California, which provided a variety of software to private and public sector organizations. In 2016, Autonomic installed power management software in Rutherford County school systems, in connection with TVA’s EnergyRight program, an incentive-based program designed to save energy and reduce costs through the installation of energy-saving software. To be eligible for the energy conservation funds, customers were required to pay a portion of the software materials costs.

Instead of following the program requirements, Autonomic represented to the Rutherford County School District that schools would not incur any costs associated with the software installation. Following the installation of the software, Autonomic submitted 47 invoices, totaling $588,240 to Lockheed Martin, the contract administrator of the EnergyRight program. The invoices were made out to Rutherford County Schools and represented that each school incurred costs associated with Autonomic’s software installation.

Alexander Gigliotti also sent an email to a Lockheed Martin representative in support of seeking the incentive payments from TVA, with a breakdown of an invoice regarding purported costs incurred by Rutherford County Schools, claiming that the school paid $22 per computer related to software and $8 per computer related to support. In fact, Rutherford County Schools did not incur any costs associated with any invoice from Autonomic. Lockheed Martin then mailed incentive payments to Autonomic that corresponded to each invoice.

The Autonomic software failed to function as initially represented and approximately one year after the installation, Rutherford County Schools purchased energy saving software that could effectively quantify energy savings and which cost substantially less than Autonomic’s total purported materials costs.

The indictment also alleges that Anthony Gigliotti lied to TVA agents by falsely stating that Alexander Gigliotti was not involved in any of the previous TVA or school system work.

If convicted, the defendants face up to 20 years in prison.

This case was investigated by the TVA Office of Inspector General and is being prosecuted by Assistant U.S. Attorney Sara Beth Myers.

An indictment is merely an accusation. The defendants are presumed innocent until proven guilty in a court of law.

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Topic(s):

Financial Fraud

Component(s):

USAO - Tennessee, Middle

Contact:

David Boling Public Affairs Officer 615-736-5956 david.boling2@usdoj.gov

PG&E Charged With Obstruction Of The Investigation Of The National Transportation Safety Board And Additional Violations Of The Natural Gas Pipeline Safety Act

Department of Justice

U.S. Attorney’s Office

Northern District of California

FOR IMMEDIATE RELEASE

Tuesday, July 29, 2014

PG&E Charged With Obstruction Of The Investigation Of The National Transportation Safety Board And Additional Violations Of The Natural Gas Pipeline Safety Act

SAN FRANCISCO – A federal grand jury for the Northern District of California returned a superseding indictment charging Pacific Gas and Electric Company (PG&E) with obstruction of the investigation of the National Transportation Safety Board (“NTSB”), as well as additional violations of the Natural Gas Pipeline Safety Act of 1968 (PSA), announced U.S. Attorney Melinda Haag, California Attorney General Kamala D. Harris, San Mateo County District Attorney Stephen M. Wagstaffe, U.S. Department of Transportation Office of Inspector General Special Agent in Charge William Swallow, and FBI Special Agent in Charge David J. Johnson.

The superseding indictment alleges that PG&E obstructed the NTSB’s investigation that began immediately after the deadly San Bruno explosion. According to the superseding indictment, during the course of the NTSB’s investigation, PG&E provided a version of a policy outlining the way in which PG&E addressed manufacturing threats on its pipelines. PG&E later withdrew that policy claiming it was produced in error, and was an unapproved draft. In fact, PG&E was operating under the so-called unapproved draft from 2009 through April 5, 2011. The consequence of this practice was that PG&E did not prioritize as high-risk, and properly assess, many of its oldest natural gas pipelines, which ran through urban and residential areas.

Additionally, the superseding indictment charges PG&E with 27 counts of knowingly and willfully violating the PSA. These charges stem from PG&E’s record keeping and pipeline “integrity management” practices. The superseding indictment alleges that PG&E failed to address recordkeeping deficiencies concerning its larger natural gas pipelines knowing that their records were inaccurate or incomplete. The superseding indictment also alleges that PG&E failed to identify threats to its larger natural gas pipelines and that PG&E did not take appropriate actions to investigate the seriousness of threats to pipelines when they were identified. Finally, the superseding indictment alleges that PG&E failed to adequately reprioritize and assess threatened pipelines after the pipelines were over pressurized as required by the PSA and its regulations.

PG&E is charged with one count of obstruction of an agency proceeding in violation of 18 U.S.C. §1505, and 27 separate counts of violations of the PSA. The maximum statutory penalty for each count is a $500,000 fine or a fine based on the twice the gross gain PG&E made as a result of the violations, or twice the losses suffered by the victims. The superseding indictment alleges that PG&E derived gross gains of $281 million, and victims suffered losses of approximately $565 million. PG&E is next scheduled to appear on August 18, 2014 before the Honorable Thelton E. Henderson, United States District Judge.

Kim A. Berger and Hallie M. Hoffman are the Assistant U.S. Attorneys who are prosecuting the case, with the assistance of Alycee Lane and Pat Mahoney, along with Deputy Attorneys General Brett Morris and Deborah Halberstadt from the California Attorney General’s Office. The prosecution is the result of an investigation conducted by the San Mateo County District Attorney’s Office, the United States Department of Transportation Office of Inspector General, the FBI, the Pipeline and Hazardous Material Safety Administration, and the city of San Bruno Police Department.

Please note, an indictment contains only allegations and, as with all defendants, PG&E must be presumed innocent unless and until proven guilty.

(PG&E superseding indictment )