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Former PTO Employee Pleads Guilty in $500,000 Embezzlement Scheme

On August 27, 2009, a former financial analyst for the U.S. Patent and Trademark Office (PTO) pleaded guilty to conspiracy to commit wire fraud in connection with an embezzlement scheme. Karen L. Parish of Woodbridge, Va., faces a maximum penalty of 20 years in prison when she is sentenced on November 20, 2009.

Parish, who was employed by PTO from 1990-2005, managed an account to which PTO customers deposited funds that were to be used to pay expenses incurred in processing their patent and trademark applications. From 1998 to 2005, Parish transferred funds from this account to accounts controlled by co-conspirator Michael H. Reid, among them Redeemed Music House, LLC, in Fort Washington, Md. Parish fraudulently concealed the transfers by making them look like refund payments to PTO customers. Reid then paid a portion of the funds to Parish in cash.

Parish engaged in 32 fraudulent transfers from PTO totaling $534,338.55. Twenty-seven of the transactions, accounting for $451,252.17, involved Reid, who pleaded guilty on August 10, 2009. Reid is also scheduled to be sentenced on November 20. According to the terms of Parish and Reid’s plea agreements, they are equally responsible for paying the full amount of the ordered restitution to the U.S. Treasury.

“This case underscores the importance of strong internal controls. It also emphasizes the significant need to stress integrity as a core value within the Federal workforce,” said Inspector General Todd Zinser of the U.S. Department of Commerce. Zinser also praised new management in PTO’s Office of Financial Management for “identifying and reporting financial irregularities, which eventually led to this conviction.”

Irregularities in refunds being made from the deposit account were first detected by managers in PTO’s Office of Financial Management. They reported the irregularities to auditors from OIG’s Office of Audit and Evaluation. An ensuing investigation conducted by the OIG’s Office of Investigations uncovered the full extent of the conspiracy and fraudulent acts which were reported to the U.S. Attorney’s Office for the Eastern District of Virginia for prosecution. A press release about Parish’s plea is available here.

DOC OIG Review of NOAA Fisheries Enforcement and Litigation

The DOC OIG has initiated a nationwide review of the policies and practices of NOAA’s Office of Law Enforcement (OLE) and General Counsel for Enforcement and Litigation (GCEL). Any comments or concerns can be submitted directly to the following email address:

NOAAFisheriesReview@oig.doc.gov
For more information see Review of NOAA Enforcement Activities

Fraudulent Telemarketing Scheme Spreads, Agents Warn

OIG special agents are warning the public that an international telemarketing fraud scheme—in which callers claiming to represent a government agency tell potential victims they have won huge sweepstakes prizes—has spread to more places around the world and likely will continue.

In one scheme, fraudulent telemarketers based in Costa Rica and other foreign countries claim to be from Commerce's Bureau of Industry and Security or another federal agency. They ask "winners" to pay insurance and customs fees and to wire funds to guarantee prize delivery. The phone numbers appear to originate in the United States. The perpetrators may also provide materials that appear to be from a government organization in order to legitimize the prize offers.

Other schemes involving selection of individuals for receipt of bogus government grants from the Department of Commerce or other agencies have also been reported to OIG investigators.

OIG investigators are warning citizens that they should NEVER send money to any individuals who may call making these claims. Although nearly $200 million in restitution has been court ordered in the sweepstakes scheme, few if any defrauded individuals will ever recover any of their losses if they fall prey to this scheme.

The U.S. Department of Commerce is not affiliated with any sweepstakes or lottery operation. If you or anyone you know receives such a call, report it to the Office of Inspector General hotline at 1-800-424-5197 or to the Federal Trade Commission at 1-877-FTC-HELP, or file a complaint with the Federal Trade Commission at www.ftc.gov.

An intense OIG investigation over the past 5 years has netted 40 arrests and 37 convictions of Americans and Canadians involved in the plot.