Investigations

Jury Finds Former Census Employee Guilty of Workers' Compensation Fraud

In April 2007, a former Census field representative was convicted of four counts of making false statements to collect benefits for work-related injuries sustained in a 1994 automobile accident. An OIG investigation had revealed the woman failed to report more than $40,000 in earnings from a dog kennel business on annual certifications submitted to the Department of Labor's Office of Workers' Compensation Programs. On July 12, 2007, the defendant was sentenced in U.S. District Court for the Northern District of Georgia to 30 months' imprisonment followed by 3 years of supervised release and ordered to pay a $5,000 fine and restitution in the amount of $37,388.20.

Joint Investigation with GAO Uncovers Violations of Federal Transit Benefits Program by Commerce Employees

The federal transit benefits program provides transit benefits (e.g., Metrocheks) to government employees to encourage the use of public transportation for commuting. Under the program currently in place at Commerce, employees may receive subsidies of up to $110 a month to cover their actual transportation costs. Because of program abuses at various federal agencies, the Government Accountability Office (GAO) was asked to investigate allegations that federal employees in the National Capital region were engaging in fraud related to the transit program. GAO teamed with a number of OIG organizations, including our office, to pursue these charges. Our investigative work is ongoing, but we have already identified several Commerce employees involved in abuse of the program.

Senior official with parking space collected more than $1,200 in Metrocheks
OIG investigators determined that a senior official received $1,260 in transit benefits over a 10-month period, although he had been assigned and regularly used a parking space at the Commerce headquarters building during that time. In order to receive the periodic subsidy, an employee must complete a preprinted certification form containing an explicit representation that he or she has not been assigned a parking permit by a federal agency. Despite that condition, the official signed the certification on at least five occasions to collect transit benefits. Prior to the conclusion of our investigation, he reimbursed the Department for the full cost of the Metrocheks he received. Additional administrative action was also recommended.

Over $1,500 in transit benefits recovered from former ITA employee
As part of the joint investigation with GAO, an undercover operation was conducted and Metrocheks worth $210 were purchased for $190 from an ITA employee on her last day of work at the agency. Although the case was declined for criminal prosecution, administrative action was initiated to recoup the benefits she had fraudulently obtained and the former employee - who admitted selling Metrocheks on multiple occasions - was compelled to reimburse the government $1,577 from her lump sum annual leave payment.

USPTO employee sold Metrocheks on eBay
Our joint investigation also revealed that a USPTO employee had sold more than $400 worth of federally subsidized Metrocheks on eBay during a 2-week period in August 2006. The employee admitted making the sales, but claimed he was unaware that his actions were prohibited. He agreed to make full restitution to the agency and subsequently resigned his position at USPTO.

Arrests and Convictions Continue in International Telemarketing Fraud Case

For the past 4 years, we have been investigating a major telemarketing fraud scheme based in Costa Rica that was perpetrated by callers identifying themselves as employees of the Commerce Department and other federal agencies, who told victims they had won huge cash prizes in a national lottery. In order to secure their winnings, victims were instructed to use commercial wire transfer services to send payments of $1,500 to $4,500 to Costa Rica. The investigation is an integral part of the Department of Justice's Operation Global Con, a massive international fraud investigation involving nearly 3 million victims and more than
$1 billion dollars in fraud worldwide. Since its inception, our investigation has resulted in a total of 32 arrests and 20 convictions of participants in the scheme, as well as a payment of nearly $1.4 million in restitution from one defendant. Between April and October 2007, eight of those defendants were convicted on conspiracy and wire fraud charges in the Western District of North Carolina. They all face prison terms ranging from 5 to 20 years. In addition, eight more participants were arrested, and two U.S. citizens were extradited from Costa Rica.

ATP Award Recipient Indicted and Assets Seized

On June 13, 2007, the recipient of a $2 million Advanced Technology Program award was indicted for program fraud in the Southern District of New York. An OIG investigation found nearly $400,000 in project funds had been diverted for the defendant's personal use. On June 25, 2007, a superseding indictment was filed, adding an asset forfeiture clause seeking $390,000 and the apartment the defendant used as both a residence and a place of business. OIG agents served a seizure warrant the following day and recovered an estimated $300,000 worth of computers and associated electronic equipment allegedly purchased with federal funds.

Former BIS Investigator Indicted for Misuse of Law Enforcement Database

A former criminal investigator in the Office of Export Enforcement was indicted on September 19, 2007, in the Northern District of California on one count of unlawfully obtaining information from a government computer and one count of making false statements after an OIG investigation established he had accessed the Treasury Enforcement and Communication System (TECS) 163 times over a 2-month period in order to track the whereabouts of a former girlfriend. TECS is a secure, password-protected system designed to identify individuals suspected of or involved in violations of federal law. It permits direct communications between Treasury law enforcement offices and other federal, state, and local law enforcement agencies. The former special agent also used the database to track the movements of members of the woman's family, and made harassing and life-threatening remarks to her, such as threatening to have her deported. When questioned by OIG investigators and his supervisors, he lied about the number of times he had accessed the investigative database for personal reasons.

NOAA Employee Pleads Guilty to Credit Card Theft

On August 15, 2007, a former NOAA employee pleaded guilty to theft of government property for charging close to $4,000 in personal purchases to a government credit card. An OIG investigation found that over a 3-week period in December 2006, 15 transactions totaling $3,938.30 were made on the employee's government purchase card for items including cigarettes, beer, gift cards, CDs, video games, and a television. All the purchases occurred at vendors located near his residence or near his work site in Pascagoula, Mississippi, and several of the transactions were captured on store surveillance tapes.

OIG Computer Crimes Unit Aids State Law Enforcement Efforts

In June 2007, the Fairfax County, Virginia, police requested OIG assistance to seize and examine government computer equipment assigned to a Census Bureau employee who had been arrested on a state homicide charge. OIG forensic analysis of the computers yielded valuable information for the police investigation, which is still in progress.

As a member of the Maryland Internet Crimes Against Children Task Force, the unit provided assistance to the St. Mary's County (Maryland) Sheriff's Office by analyzing a computer seized during the course of a child pornography investigation in August 2007. Our forensic analysis revealed the presence of suspected pornographic material, including digital images of children from the suspect’s household, and the evidence was forwarded to the local authorities for use in their case.