EA-96-110 - J&L Testing Company, Inc.

April 10, 1998

EAs 96-110

Ms. Lourdes T. Boschuk, President
J&L Testing Company, Inc.
938 South Central Avenue
Canonsburg, Pennsylvania 15317

SUBJECT:

ORDER REVOKING LICENSE (NRC Office of Investigation Report No. 1-95-044)

Dear Ms. Boschuk:

The enclosed Order Revoking License is being issued because of J&L Testing Company, Inc.'s (JLT) violations of NRC requirements, including deliberate inaccurate statements to the NRC. The violations were identified during an NRC inspection conducted on August 1 and 3, 1995, and during the subject investigation by the NRC's Office of Investigations (OI). The synopsis of the investigation was forwarded to you on November 24, 1997. A predecisional enforcement conference was held on December 18, 1997. Previously, an Order Suspending License was sent to you on September 27, 1995.

Given the deliberate and widespread wrongdoing involving your facility, by both you and the President of J&L Engineering (President JLE), an agent of and consultant to JLT, the NRC has determined that your license should be revoked, and that separate Orders should be issued to you and the President JLE, precluding you and the President JLE from any involvement in NRC licensed activities for a period of five years. Pursuant to Section 223 of the Atomic Energy Act of 1954, as amended, any person who willfully violates, attempts to violate, or conspires to violate, any provision of these Orders shall be subject to criminal prosecution as set forth in that section. Violation of these Orders may also subject the person to a civil monetary penalty.

In addition to the above, the Department of Labor (DOL) Administrative Review Board found, in its Final Decision and Order, issued September 23, 1997, that JLT discriminated against a former employee (the former Radiation Safety Officer) for engaging in protected activities. While the enclosed Order is not based on this finding of the Secretary of Labor, which you have appealed to a U.S. Court of Appeals, the NRC is still reviewing this matter.

You are required to respond to this letter and the enclosed Order and should follow the instructions specified in the Order when preparing your response. The NRC will use your response, in part, to determine whether further enforcement action is necessary to ensure compliance with regulatory requirements.

In accordance with 10 CFR 2.790 of the NRC's "Rules of Practice," a copy of this letter, its enclosures, and your response will be placed in the NRC Public Document Room.

Questions concerning these actions should be addressed to me and I can be reached at (301) 415-2741.

Sincerely,

James Lieberman, Director Office of Enforcement

Docket No. 030-33725
License No. 37-28442-02

Enclosure: Order Revoking License

cc w/encl:
Commonwealth of Pennsylvania
State of New York
State of Illinois (Bruce Sanza)

---

UNITED STATES

NUCLEAR REGULATORY COMMISSION

In the Matter of J&L TESTING COMPANY, INC. Canonsburg, Pennsylvania

) ) ) ) )

Docket No. 30-33725 License No. 37-28442-02 EAs 96-110

ORDER REVOKING LICENSE

I

J&L Testing Company, Inc., (Licensee or JLT) is the holder of Byproduct Nuclear Material License No. 37-28442-02 (License) issued by the Nuclear Regulatory Commission (NRC or Commission) pursuant to 10 CFR Part 30. The License authorizes possession and use of Troxler portable nuclear density gauges containing cesium-137 and americium-241 in sealed sources. The License, originally issued on February 7, 1995, was amended on August 22, 1995, and is due to expire on February 29, 2000. The License was suspended by Order, dated September 27, 1995.

II

J & L Engineering, Inc. (JLE), a corporation located at the same address and using the same telephone and facsimile numbers as the Licensee, held License No. 37-28442-01 for the same portable nuclear gauges for which the Licensee is now licensed. John Boschuk, Jr., President and owner of JLE, has acted as an agent of and consultant to JLT. JLE's license was revoked on August 30, 1993, for non-payment of fees. JLE was ordered, among other things, to cease use of byproduct material, dispose of the byproduct material, and notify the NRC of the disposition within 30 days of that Order. Notwithstanding that Order, JLE continued to possess the byproduct material and on October 5, 1994, a Notice of Violation (Notice) was issued to JLE for possession of licensed material without a valid NRC license. By letter dated October 11, 1994, Mr. Boschuk responded to the Notice, stating, among other things, that the "...equipment [3-Troxler Nuclear Density gauges] has not been used for over 2 years and has not left the storage area in our office."

On November 21, 1994, JLT submitted an application for a license. The November 21, 1994, cover letter for the application, signed by Lourdes Boschuk, President and owner of JLT and wife of John Boschuk, Jr., stated the following:

. . . submitted herein is our application to restore our expired license to store and operate three (3) Troxler Nuclear Density Gages (sic). We understand our license was revoked on August 30, 1993. Since that date, these units were not removed from storage nor used in anyway (sic).

Relying on the application and the statement that the gauges had not been removed from storage since the JLE license was revoked, the NRC issued the new License No. 37-28442-02 to JLT on February 7, 1995.

On August 1 and 3, 1995, the NRC conducted a routine, announced safety inspection of activities authorized by the License at JLT's facility in Canonsburg, Pennsylvania. During the inspection, an NRC inspector determined, based on a review of Licensee's documents, that one of the gauges, which JLE and the Licensee separately had stated in writing to the NRC were in storage and had not been used since revocation of the JLE license, had been transferred on September 2, 1994, to SE Technologies, Inc., in Bridgeville, Pennsylvania (which used the gauge at a temporary jobsite at the S. Hill Village Sears project), when neither JLE nor JLT possessed a valid NRC license. As stated by the Chief Engineer of SE Technologies, Inc., Mr. Boschuk had arranged for the rental, and as stated by a Project Engineer of SE Technologies, Inc., Mr. Boschuk had personally transferred the gauge to SE Technologies, Inc. JLT stated at a December 18, 1997, enforcement conference that uses of the gauge(s) prior to February 7, 1995, and after revocation of the JLE license were invoiced by JLT. The transfer of the gauge to SE Technologies, Inc. was a deliberate violation of 10 CFR 30.3, which prohibits, among other things, transfer of byproduct material without a valid license from the NRC and a deliberate violation of the order revoking JLE's license in violation of 10 CFR 30.10(a). As a consequence, the statement by Ms. Boschuk in her November 21, 1994, letter to the NRC, that the gauges had not been used and had not left storage at JLT since August 30, 1993, was inaccurate in violation of 10 CFR 30.9(a), and the statement by Mr. Boschuk in his October 11, 1994, letter to the NRC, that the gauges had not been used for over two years and had not left storage, was deliberately inaccurate in violation of 10 CFR 30.9(a) and 30.10(a).

During the NRC's August 1995 inspection, three additional violations of NRC requirements were identified. These violations involved the failure to perform leak tests of the gauges at the required 6-month intervals, as required by Condition 12 of the license; the failure to have an approved Radiation Safety Officer (RSO) (the RSO listed by the license terminated employment on May 26, 1995), as required by License Condition 11A; and the failure to perform physical inventories of the gauges at the required 6-month intervals, as required by Condition 14 of the license. By letter dated September 11, 1995, JLT admitted that the cited violations had occurred.

A predecisional enforcement conference was held with the Licensee on September 15, 1995, to discuss the five violations identified during the August 1995 inspection. At the conference, JLT's President admitted all five violations, but offered no explanation for why the material had been used notwithstanding the revocation of the JLE license and JLT's lack of a license.

Based upon the above, the NRC concluded that JLT's submission of materially inaccurate information in its license application, and JLE's submission of materially inaccurate information in response to a Notice of Violation, were, if not deliberate, in careless disregard of Commission requirements. These violations, combined with the additional violations identified during the inspection, caused the NRC to conclude that the Licensee was unwilling or unable to comply with NRC requirements and that the requisite reasonable assurance that the Licensee's operations could be conducted under License No. 37-28442-02 in compliance with the Commission's requirements was lacking, such that the health and safety of the public, including the Licensee's employees, would not be protected if the Licensee were permitted to conduct licensed activities at that time. Therefore, in the interest of public health and safety, the License was suspended, effective immediately, on September 27, 1995, pending completion of an investigation by the NRC Office of Investigations.

III

Subsequently, the NRC Office of Investigations completed its investigation of JLT. The NRC staff has determined that, in addition to the violations cited above, JLT committed a number of other violations of NRC regulatory requirements, as set forth below.

A. Materially Inaccurate Statements Made to NRC

(1) A letter to the NRC dated September 11, 1995, signed by Lourdes Boschuk and reviewed and edited by John Boschuk, Jr., stated that the Troxler gauge that was missing at the time of the August 1995 NRC inspection was in Watertown, New York, and was returned to JLT the next day. This was a deliberately inaccurate statement in violation of 10 CFR 30.9(a) and 30.10(a). In fact, according to the Chief Engineer of SE Technologies, Inc., Mr. Boschuk personally transferred the gauge to SE Technologies, Inc. in July 1995, and requested return of the gauge on August 14 or 15, 1995. In fact, the gauge was not returned to JLT until August 17, 1995. In addition, the September 11, 1995, letter represented that since the August 1995 NRC inspection, all three Troxler gauges had been in a locked storage cabinet at JLT's premises and would remain there until the apparent violations identified in the NRC's Inspection Report were resolved. This inaccurate statement in violation of 10 CFR 30.9(a) was made with careless disregard for the facts. In fact, one of the gauges had been transferred to Cashin Associates, P.C., Hauppauge, New York, on September 6, 1995, and was not returned to JLT until September 19 or 20, 1995.

(2) During an enforcement conference with the NRC on September 15, 1995, Lourdes Boschuk, President of JLT, stated that JLT's operable Troxler gauge was in storage and was not used "at all". In fact, that gauge was transferred by JLT on September 6, 1995, to Cashin Associates, P.C. for use at the Brookhaven Landfill in New York State, and was not returned to JLT until September 19 or 20, 1995. This inaccurate statement was in violation of 10 CFR 30.9(a) and was made with careless disregard for the facts.

(3) In a letter to the NRC dated September 18, 1995, prepared by John Boschuk, Jr. and signed by Lourdes Boschuk, and sent to the NRC in response to the NRC's September 15, 1995, letter confirming JLT's commitment at the September 15, 1995, enforcement conference to refrain from using the Troxler density gauges pending resolution of the apparent violations, JLT made several inaccurate statements. The letter stated that all of JLT's gauges have been in the storage cabinet on the JLT premises since the visit of the NRC inspector. This was a deliberate, materially inaccurate statement in violation of 10 CFR 30.9(a) and 30.10(a)(2). In fact, Ms. Boschuk knew no later than September 15, 1995, during a telephone call to the Director of JLT immediately after the September 15, 1995, enforcement conference, that one of JLT's Troxler gauges had been transferred on September 6, 1995, to Cashin Associates, P.C. in New York State. In fact, Mr. Boschuk learned from Ms. Boschuk no later than the weekend ending September 17, 1995, that the gauge had been transferred to Cashin Associates, P.C. As explained above, he also knew that the gauge had been transferred to SE Technologies, Inc. between July 18, and August 17, 1995, although the NRC inspection ended on August 3, 1995.

In addition, the letter stated that all three JLT Troxler gauges were currently locked in the designated storage cabinet on the JLT premises. This inaccurate statement was in violation of 10 CFR 30.9(a) and was made with at least careless disregard as to its truth or falsity by both Mr. and Ms. Boschuk. In fact, Lourdes Boschuk sent JLT's Radiation Safety Officer (RSO) to retrieve the gauge which had been transferred to Cashin Associates, P.C., but the RSO did not return to JLT with the gauge until late in the evening of September 19 or early in the morning of September 20, 1995. Mr. Boschuk stated at the December 18, 1997, predecisional enforcement conference that although he checked the storage cabinet before preparing the letter, and saw three yellow cases which he assumed contained the gauges, he did not look inside the cases to verify the gauges were there.

(4) Figure 1 of the November 21, 1994, JLT application, revised January 6, 1995, depicted a locked steel cabinet on the JLT premises as the storage site for the three Troxler gauges. However, the cabinet did not have a lock. John Boschuk, Jr. prepared Figure 1. This materially inaccurate statement was in violation of 10 CFR 30.9(a) and was made with at least careless disregard for the facts by Mr. Boschuk.

B. Unauthorized Use of Byproduct Material and Related Materially Inaccurate Statements JLT admittedly used the Troxler density gauge(s) on four occasions after revocation of the JLE license and before the NRC issued a license to JLT on February 7, 1995. JLT stated at the December 18, 1997, enforcement conference that JLT employees used the gauges on those occasions and that JLT invoiced its customers for the usage. Specifically, JLT admitted to using the gauge(s) for the following customers: DelSir Supply in December 1993, Johnson Construction in May 1994, Johnson Construction in June 1994, and PA Soil & Rock Company in July 1994. These violations of 10 CFR 30.3 were committed with at least careless disregard by JLT.

As a consequence, the statement by Ms. Boschuk in her November 21, 1994, letter to the NRC, that the gauges had not been used and had not left storage at JLT since August 30, 1993, and the statement by Mr. Boschuk in his October 11, 1994, letter to the NRC, that the gauges had not been used for over two years and had not left storage, were materially inaccurate in violation of 10 CFR 30.9(a) and made with at least careless disregard.

C. Violation of License Condition

Condition 19 of the JLT License requires that, when not in use, the Troxler gauges be kept in a locked cabinet on JLT's premises, as depicted by Figure 1 of the January 6, 1995, amended application. Figure 1, prepared by Mr. Boschuk, pictures a storage closet with a lock. In violation of that requirement, JLT failed to maintain its gauges in a locked storage cabinet between February 7, 1995 and sometime before the August 1995 inspection. The failure to maintain the gauges in a locked cabinet was in violation of Condition 19 of JLT's License and of 10 CFR 30.3.

D. Destruction of Records Relating to Gauge Usage

According to a witness, Lourdes Boschuk, John Boschuk, Jr. and others destroyed, altered, sanitized, or otherwise disposed of business and transactional records shortly after the August 1995 NRC inspection of JLT, in order to conceal from the NRC the unauthorized use and/or transfer of Troxler gauges by JLT. Among the records destroyed or disposed of were invoices and a log documenting use of the Troxler density gauges. According to a handwritten note, created by a JLT employee immediately after the September 15, 1995, enforcement conference, although utilization records were made available to the NRC inspector, those records could not be subsequently located. The note further reflected a question whether the utilization records were "thrown away during sanitization of records?" Shortly after the August 1995 inspection, the NRC inspector requested JLT to provide a copy of a utilization record found during the inspection and which documented the rental of a gauge to SE Technologies in September 1994, when neither JLE nor JLT had a valid NRC license. JLT did not provide the invoice and claimed it could no longer find the document. Condition 19 of JLT's License requires that JLT conduct its licensed activities in accordance with its Application dated January 6, 1995. The Application mandates that JLT comply with conditions requiring the creation of a utilization log for the gauges and the maintenance of the log for audit purposes. The destruction of the utilization log was in violation of 10 CFR 30.3 and 30.9(a). The participation of John Boschuk, Jr. and Lourdes Boschuk in the deliberate destruction of the utilization log was in violation of 10 CFR 30.10(a).

IV

Based on the above, the NRC concludes that the Licensee willfully violated NRC requirements, both deliberately and with careless disregard, and committed violations of NRC safety requirements. Among the Licensee's willful violations were repeated, materially inaccurate statements to the NRC regarding unauthorized use of byproduct material, unauthorized use of licensed material, violation of license conditions regarding the use and storage of the gauges, and the destruction or disposal of records related to unauthorized use of licensed material. As stated above, among the Licensee's violations of safety requirements were the failure to perform required leak tests, to have an approved Radiation Safety Officer, and the failure to perform required inventories of licensed material. The NRC must be able to rely on its Licensee's integrity and their compliance with NRC requirements. The Licensee's numerous willful violations and other violations demonstrate that the Licensee is either unwilling or unable to comply with NRC requirements.

Consequently, I lack the requisite reasonable assurance that the Licensee is willing and able to conduct operations under License No. 37-28442-02 in compliance with the Commission's requirements, or that the health and safety of the public will be protected if J&L Testing Company, Inc. continues to engage in licensed activity. Therefore, the public health, safety and interest require that License No. 37-28442-02 be revoked.

V

Accordingly, pursuant to sections 81, 161b, 161i, 161o, 182 and 186 of the Atomic Energy Act of 1954, as amended, and the Commission's regulations in 10 CFR 2.202 and 10 CFR 30.10, IT IS HEREBY ORDERED THAT LICENSE NO. 37-28442-02 IS REVOKED, AND ALL LICENSED MATERIAL CURRENTLY IN THE LICENSEE'S POSSESSION SHALL BE TRANSFERRED TO AN AUTHORIZED RECIPIENT WITHIN 7 DAYS OF THE EFFECTIVE DATE OF THIS ORDER. FURTHER, THE LICENSEE SHALL NOTIFY THE NRC WITHIN TWO BUSINESS DAYS AFTER SUCH TRANSFER HAS TAKEN PLACE AS TO WHOM THE TRANSFER WAS MADE. THE LICENSEE MAY TELEPHONICALLY CONTACT NRC'S REGIONAL OFFICE AT 610-337-5000 TO COMPLY WITH THE NOTIFICATION REQUIREMENT.

VI

In accordance with 10 CFR 2.202, the Licensee must, and any other person adversely affected by this Order may, submit an answer to this Order, and may request a hearing on this Order, within 20 days of the date of this Order. Where good cause is shown, consideration will be given to extending the time to request a hearing. A request for extension of time must be made in writing to the Director, Office of Enforcement, US Nuclear Regulatory Commission, Washington, DC 20555, and include a statement of good cause for the extension. The answer may consent to this Order. Unless the answer consents to this Order, the answer shall, in writing and under oath or affirmation, specifically admit or deny each allegation or charge made in this Order and shall set forth the matters of fact and law on which the Licensee or other person adversely affected relies and the reasons why the Order should not have been issued. Any answer or request for hearing shall be submitted to the Secretary, U.S. Nuclear Regulatory Commission, ATTN: Chief, Rulemaking and Adjudications Staff, Washington, DC 20555. Copies also shall be sent to the Director, Office of Enforcement, U.S. Nuclear Regulatory Commission, Washington, DC 20555, to the Deputy Assistant General Counsel for Enforcement at the same address, to the Regional Administrator, NRC Region I, 475 Allendale Road, King of Prussia, Pennsylvania 19406-1415, and to the Licensee, if the answer or hearing request is by a person other than the Licensee. If a person other than the Licensee requests a hearing, that person shall set forth with particularity the manner in which his or her interest is adversely affected by this Order and shall address the criteria set forth in 10 CFR 2.714(d).

If a hearing is requested by the Licensee or a person whose interest is adversely affected, the Commission will issue an Order designating the time and place of any hearing. If a hearing is held, the issue to be considered at such hearing shall be whether this Order should be sustained.

In the absence of any request for hearing, or written approval of an extension of time in which to request a hearing, the provisions specified in Section IV above shall be final 20 days from the date of this Order without further order or proceedings. If an extension of time for requesting a hearing has been approved, the provisions specified in Part IV of this Order shall be final when the extension expires if a hearing request has not been received.

FOR THE NUCLEAR REGULATORY COMMISSION James Lieberman, Director Office of Enforcement

Dated at Rockville, Maryland
this 10^th day of April 1998