Presentation on theme: "VA Office of Inspector General Criminal Investigations Division"— Presentation transcript:
1VA Office of Inspector General Criminal Investigations Division Fraud Awareness Briefing
2VA Office of Inspector General Audit DivisionHealthcare InspectionsAdministrative Investigations DivisionCriminal Investigations DivisionIn 1978, President Carter created independent audit and investigative offices in 12 Federal agencies when he signed into law the Inspector General Act of VA was one of these agencies.IGs have the authority and responsibility to be independent voices for economy, efficiency and effectiveness within the federal govtIGs protectIntegrity of govtImprove program efficiency and effectivenessPrevent and detect fraud, waste and abuseRequirement to report results of our work to CongressWeekly submissions to the IGSemi Annual reports to CongressVA OIG consists of four agencies AUDIT, Healthcare Inspections, Administrative and CIDFour Field Offices (Western, South Central, Central, Northeast), 22 local offices, ?? Agents nationwideComputer Crimes LabForensic Document Lab
3Investigate violations of federal law involving VA Programs and facilities. Special Agentsarrest authority, carry firearms, execute search warrants, conduct undercover operationsPrimary resp is to conducting allegations into criminal activities related to the programs and operations of VA.How do we get cases?Referral from Dept, veterans, public, Congress, other law enforcement contactsProactive efforts (matching programs – ex: SSA Death Match)Special AgentsTrained by the Federal Law Enforcement Training Center in Georgia (types of classes include interviewing/interrogation, constitutional law, criminal law, program/contract fraud, evidence processing)Ongoing training during careersSame law enforcement authority as FBI, DEA or ATF (can work jointly with them) - Make arrests, carry firearms, execute search warrants, conduct UC operationsWe conduct the investigation, then refer to the USAO for criminal prosecution.Also can go to the DAWork with prosecutors to suitable conclusion (conviction, plea agreement, sentencing)
4Subjects of Investigation VeteransVA beneficiariesVA fiduciariesVA employeesHealthcareBenefitsVA contractors/vendors/granteesPrivate citizensWho are the subjects of our investigations?Can range from (name them)OIG Special Agents also conduct internal investigations of VA employeesMainly criminal, and usually results in administrative actions (termination, suspension, etc)
5Cases we investigate From complex contract fraud to homicide. Prosecutable crimes that affect VA.Federal Criminal/Civil StatutesWashington State Penal CodeLocal RegulationsOIG Special Agents can investigate many kinds of cases from contract fraud to homicide.Crimes that occur in the city of Los Angeles (or name your city) can happen on VA propertyVARO has some security measures in place, so safer than VAMC or Station:No checkpoints, no guard gates, no magnetometersFederal statutes we can use:18 USC 371 Conspiracy to commit offense or to defraud the United States18 USC 641 Theft of Public money, property or records18 USC 666 Theft or Bribery concerning programs receiving federal funds18 USC 1001 False Statements18 USC 1341 Mail Fraud18 USC 1343 Wire Fraud18 USC 1344 Bank FraudPlus othersCivil False Claim actionsWork with local and state Law enforcement
6Define “FRAUD”Main Entry: fraud Pronunciation: 'frod Function: noun Etymology: Middle English fraude, from Middle French, from Latin fraud-, fraus 1 a : DECEIT, TRICKERY; specifically : intentional perversion of truth in order to induce another to part with something of value or to surrender a legal right b : an act of deceiving or misrepresenting : TRICK 2 a : a person who is not what he or she pretends to be : IMPOSTOR; also : one who defrauds : CHEAT b : one that is not what it seems or is represented to besynonym see DECEPTION, IMPOSTUREThis is how Webster defines fraud.Layman’s definition:Lying, cheating and/or stealing.An INTENTIONAL distortion of truth in an attempt to obtain something of value.Distinction in Criminal investigations: Does not have to result in monetary loss.Can be attempt to defraud the govt
7Types of Crime Frauds General Crimes VBA Frauds VHA Frauds primarily associated with VHAWill the investigation determine that the offense was mismanagement, error or FRAUD?We will discuss various types of fraud cases and general crimes (mainly with VHA)
8Types of Fraud Cases/VBA EmbezzlementTheft of BenefitsFalse StatementsEquity Skimming/Loan GuaranteeConstruction FraudEmbezzlement1. Funeral home director indicted for fraudulently billed the VA for funeral services he never performed. VA purchase card was used for payment.3. Veteran’s widow indicted for theft of govt money by embezzling over $37k in VA death pension benefits to which she was not entitled. Widow remarried but did not report this to VA.False StatementsVA beneficiary sentenced to 37 months in prison. He collected VA pension benefits since 1991 claiming he could not walk without the use of braces, crutches or a wheelchair; also received special monthly compensation, compensation for special adaptive housing and assistance for the purchase of an automobile. Investigation disclosed that he could walk without the aid of assisting devices.Equity Skimming - Person owned and operated a real estate business and represented to troubled homeowners that they would take over mortgage payments, find outside investor to purchase property and contact bank, but they did not. Affected homes guaranteed by VA. Stole almost $1m.Fiduciary Fraud – Man arrested pursuant to a felony arrest warrant after being indicted for committing fraud against his uncle, a veteran and beneficiary. Stole $54kWoman sentenced to prison after diverting $60k of VA funds for a disabled veteran to fund her own businessDisability and worker’s comp fraud – individual filed false statements to VA and OWCP in order to obtain workers comp benefits, while owning and operating a counseling service. Unlawfully recd $424k in workers comp
9Types of Fraud Cases/VBA Deceased Payee CasesCredit Card FraudFiduciary FraudDisability and Workers’Compensation FraudDeceased payee cases – 1. family member of deceased beneficiary sentenced to 5 months in prison for concealing the death of parent and for 13 years, unlawfully cashed the VA benefit checks by forging the deceased parent’s signature.Grandson falsified VA marital status questionnaire for his deceased grandparent in order to continue receiving the grandparent’s VA benefits. Also pretended to be the grandparent on the phone when telling VA to change benefits delivery to direct deposit. Sentenced to 24 months’ supervision.Veteran pled guilty to wire fraud, sentenced to 18 months incarceration for falsely reporting he received NO income in order to receive VA pension, when in fact he was receiving monthly Social SecurityCredit Card fraud - Five VA employee were indicted on 125 counts of using a govt purchase card to buy personal items such as jewelry, video equipment, clothes and tools. The employees then submitted fraudulent purchase orders to the VA to hide their activities.
10Types of Fraud Cases/VHA EmbezzlementTheft of BenefitsIdentity TheftTheft of Government PropertyProcurement FraudEmbezzlement - . Former employees of a credit union located at a VAMC pled guilty to bank fraud. Embezzled $68k from bank by fabricating withdrawal transactions.Theft of Benefits- VAMC nurse filed compensation claim alleging severe allergy; allowed to work from home and receive full salary. Nurse then found another job at nursing home, failing to notify VA or OWCPFormer VAMC agent cashier unlawfully received funds after submitted over 400 false travel reimbursements. Sentenced to 5 years probationIdentity theft - Person used a veterans name, SSN and DD-214 to apply for VA medical benefits. Was found guilty and sentenced to 24 months incarceration-person used his brother’s identity as a veteran to obtain credit and receive healthcare from two VAMCs. Sentenced to 36 years incarcerationProcurement FraudContractor indicted for conspiracy to make false statements, installing used automotive adaptive equipment into veterans’ vehicles, but billed VA for new equipment and equipment he never provided.
11General Crimes affecting VHA Drug DiversionFor ProfitFor UseTheft of PropertyChild PornographyPatient AbuseHomicidepatient by patientpatient by staffDrug Diversion - VAMC pharmacist stole several hundred of thousand dosage units of schedule II and III controlled substances from VAMC. Transferred drugs to another for streetwide distribution. Loss to VA is $194k. Pharmacist sentenced to 8 years incarceration.Theft of property – veterans or employees stealing medical equipment, computers, theft from VA patientsElectronic Crimes – former VA employee pled guilty to possessing child pornographyPatient Abuse – patient on patient, patient assaults staff, staff assaults patient, sexual assaultHomicide – stems from patient abuse
12When you should call us.Whenever you think something is wrong and there may be criminal conduct involved.Call us early, when allegation first surfaces.Many referrals don’t result in cases.Encourage informal contacts.What should you do when you suspect criminal activity?Whenever you think something is wrong and there may be criminal conduct involvedCall us early, when allegation first surfaces.Contact the OIG when you first become suspiciousLet us make the decision whether or not the activity warrants opening a criminal investigationYou can remain anonymous (however, its hard to contact you for further info) or confidential (better, more credibility)90% of our referrals don’t result in cases.Could be a misunderstanding or mistakeEncourage informal contactsListen to your customers, they might know something but don’t know where to report itDepartment entrusts its employees to DO THE RIGHT THING!We are tasked to hold people accountable for their criminal actions against the VA.38 CFR Parts 1, 14, 17 AND VA employee handbook cites requirement for VA employees to report info to OIG about possible criminal activityOIG Hotline # during this week is :
1338 CFR 1.201 Employee's duty to report. 38 CFR Information to be reported to VA Police.38 CFR Information to be reported to the Office of Inspector General. Criminal matters involving felonies will also be immediately referred to the Office of Inspector General, Office of Investigations.All VA employees with knowledge or information about actual or possible violations of criminal law related to VA programs, operations, facilities, contracts, or information technology systems shall immediately report such knowledge or information to their supervisor, any management official, or directly to the Office of Inspector General. (Authority: 5 U.S.C. App. 3, 38 U.S.C. 902)Information about actual or possible violations of criminal laws related to VA programs, operations, facilities, or involving VA employees, where the violation of criminal law occurs on VA premises, will be reported by VA management officials to the VA police component with responsibility for the VA station or facility in question. If there is no VA police component with jurisdiction over the offense, the information will be reported to Federal, state or local law enforcement officials, as appropriate. (Authority: 38 U.S.C. 902)VA management officials with information about possible criminal matters involving felonies will ensure and be responsible for prompt referrals to the OIG. Examples of felonies include but are not limited to, theft of Government property over $1000, false claims, false statements, drug offenses, crimes involving information technology systems and serious crimes against the person, i.e., homicides, armed robbery, rape, aggravated assault and serious physical abuse of a VA patient. (Authority: 5 U.S.C. App. 3)
14VA Inspector General Hotline VAOIG HotlineVA Inspector General HotlineP.O. Box 50410Washington, DC 20091FAX:Names and #s of all Special Agents assigned to the Los Angeles office are on this sheet.Main # and fax#Mailing Address and physical addressDuty agent #VA OIG Hotline (DC)
15New Hours & Procedures: The VA Office of Inspector General Hotline Call Center has changed its hours of operation. Patients, employees and the public reporting fraud, waste and abuse in the VA may contact a Hotline representative between 8:30 AM and 4:00 PM Eastern time, Monday through Friday excluding Holidays. During non-call-center hours, you may write to the VA Office of Inspector General Hotline (address above). You may also fax material to (202) or use our address.Confidentiality of Mailed Documents: The VAOIG Hotline Post Office Box is separately maintained by the VAOIG. If you submit correspondence to that address, it will not be read by any Departmental mailroom staff.How To Send Us Complaints:Our Hotline address isImportant Notice: Because of the variations in address styles among servers, we are not always able to respond to complainants using the system-provided address. IF YOU DESIRE A RESPONSE, you MUST include in your message either your complete address for Internet mail from outside your server or a valid address for mail via the U.S. Postal Service. We have changed systems (and our address) to help alleviate this problem. However, providing your return address will greatly assist us in responding to your complaint.Even if you do not expect a response from us, please consider including your name and either your mailing address or a telephone number where you may be reached between 8:30am and 4:00pm Eastern Time.
16North Western Field Office Northern CaliforniaSan FranciscoFresnoNorthern NevadaRenoOregonWashington StateIdahoMontanaSpecial Agent in ChargeMichael Seitler(510)Western Field OfficeSouthern CaliforniaLos AngelesSan DiegoBakersfieldArizonaNew MexicoSothern NevadaLas VegasUtahAsst. Special Agent in ChargeLisa MantioneNames and #s of all Special Agents assigned to the Los Angeles office are on this sheet.Main # and fax#Mailing Address and physical addressDuty agent #VA OIG Hotline (DC)
17UNITED STATES ATTORNEY'S OFFICE Western District of Washington Donald PepinUNITED STATES ATTORNEY'S OFFICE Western District of WashingtonNovember 20, 2009CAMANO ISLAND MAN INDICTED FOR SCHEME TO STEAL AND SELL DIABETIC SUPPLIESFormer Pharmacy Employee Conspired with Florida Resident to Sell Stolen Insulin and Test StripsAccording to the indictment, WORLEY worked as a Pharmacy Technician at Providence Medical Center’s Pacific Campus Pharmacy in Everett. Part of his job was to order insulin and other diabetic supplies for the pharmacy. WORLEY was placed on leave and ultimately terminated in November 2008, when an internal audit revealed large amounts of insulin being ordered for that pharmacy. The indictment alleges that WORLEY stole both insulin and diabetic test strips, used for checking insulin levels, and sold them on Ebay. After those initial sales, WORLEY was contacted via by PEPIN who wanted to directly purchase insulin and test strips. PEPIN even sent WORLEY lists of the insulin products he wanted and the price he was willing to pay. The prices were just a fraction of the wholesale cost of the items. Over the course of the conspiracy WORLEY is alleged to have stolen $366,054 worth of insulin from Providence Hospital. The retail value of that insulin was more than $1.2 million.
18VA OIG Investigation Los Angeles VAMC Pharmacy Determined: Incoming orders of test strips outpaced demandTest strips had unique lot numbersUnusually high warehouse activity by: ?
23VA OIG Investigation Above Suspicion Doctor of Pharmacy Supervisor Always volunteered for overtimeHad private officeHad all access - trusted
24VA OIG Investigation Suspicious Supervisor - Not scrutinized Always volunteered for overtime– why? Money problems? - opportunityHad private office- Out of sightHad all access – trustedHad no job duties in the warehouse- History of crimes against the VA
25White-collar crimeWithin the field of criminology, white-collar crime has been defined by Edwin Sutherland as "a crime committed by a person of respectability and high social status in the course of his occupation" (1949).
26Motive Ability Opportunity Think about it…Hmmm Motive – Money, Money, MoneyOpportunity – given access to secure area, worked weekends, mornings, eveningsAbility – can you pick up a box? Computer savvy, networking, eBay, PayPal
27OpportunityOpportunity for fraud, bribery, insider trading, embezzlement, computer crime, identity theft, and forgery is more available to white-collar employees.
28Estimated gross sales of $140,000 Think about it…HmmmLost VA Job (Resigned in lieu of termination)Facing criminal prosecution for thefts from 2005 – 2010:Conspiracy - 5 years / $250,000 fine.Wire Fraud years / $250,000 fine.Transportation of Stolen Property – 10 years / $250,000Receipt of Stolen Property years / $250,000Estimated gross sales of $140,000Fertility treatmentsMotive – Money, Money, MoneyOpportunity – given access to secure area, worked weekends, mornings, eveningsAbility – can you pick up a box? Computer savvy, networking, eBay, PayPalConspiracy is punishable by up to five years in prison and a $250,000 fine. Wire Fraud is punishable by up to 20 years in prison and a $250,000 fine. Both Transportation of Stolen Property and Receipt of Stolen Property are punishable by up to ten years in prison and a $250,000 fine.
29Ounce of Prevention Physical Security Controls Management Controls Need for accessCop on the beatManagement ControlsDuty to reportAccountabilityInventorySeparation of dutiesMandatory Witness
30Take Away! Call the VA OIG upon suspicion M – O – A Don’t circumvent the controlsDon’t tolerate thievery
31Thomas Oberhofer (310) 268 - 4788 Motive – Money, Money, Money Opportunity – given access to secure area, worked weekends, mornings, eveningsAbility – can you pick up a box? Computer savvy, networking, eBay, PayPalConspiracy is punishable by up to five years in prison and a $250,000 fine. Wire Fraud is punishable by up to 20 years in prison and a $250,000 fine. Both Transportation of Stolen Property and Receipt of Stolen Property are punishable by up to ten years in prison and a $250,000 fine.