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VA Office of Inspector General Criminal Investigations Division Fraud Awareness Briefing.

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Presentation on theme: "VA Office of Inspector General Criminal Investigations Division Fraud Awareness Briefing."— Presentation transcript:

1 VA Office of Inspector General Criminal Investigations Division Fraud Awareness Briefing

2 VA Office of Inspector General Audit Division Audit Division Healthcare Inspections Healthcare Inspections Administrative Investigations Division Administrative Investigations Division Criminal Investigations Division Criminal Investigations Division

3 Investigate violations of federal law involving VA Programs and facilities. Investigate violations of federal law involving VA Programs and facilities. Special Agents Special Agents arrest authority, carry firearms, execute search warrants, conduct undercover operations arrest authority, carry firearms, execute search warrants, conduct undercover operations

4 Subjects of Investigation Veterans Veterans VA beneficiaries VA beneficiaries VA fiduciaries VA fiduciaries VA employees VA employees Healthcare Healthcare Benefits Benefits VA contractors/vendors/grantees VA contractors/vendors/grantees Private citizens Private citizens

5 Cases we investigate From complex contract fraud to homicide. From complex contract fraud to homicide. Prosecutable crimes that affect VA. Prosecutable crimes that affect VA. Federal Criminal/Civil Statutes Federal Criminal/Civil Statutes Washington State Penal Code Washington State Penal Code Local Regulations Local Regulations

6 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 be DECEITTRICKERYTRICK IMPOSTORCHEATDECEITTRICKERYTRICK IMPOSTORCHEAT synonym see DECEPTION, IMPOSTURE DECEPTIONIMPOSTUREDECEPTIONIMPOSTURE Define “FRAUD”

7 Types of Crime Frauds Frauds VBA Frauds VBA Frauds VHA Frauds VHA Frauds General Crimes General Crimes primarily associated with VHA primarily associated with VHA

8 Types of Fraud Cases/VBA Embezzlement Embezzlement Theft of Benefits Theft of Benefits False Statements False Statements Equity Skimming/Loan Guarantee Equity Skimming/Loan Guarantee Construction Fraud Construction Fraud

9 Types of Fraud Cases/VBA Deceased Payee Cases Deceased Payee Cases Credit Card Fraud Credit Card Fraud Fiduciary Fraud Fiduciary Fraud Disability and Workers’ Disability and Workers’ Compensation Fraud Compensation Fraud

10 Types of Fraud Cases/VHA Embezzlement Embezzlement Theft of Benefits Theft of Benefits Identity Theft Identity Theft Theft of Government Property Theft of Government Property Procurement Fraud Procurement Fraud

11 General Crimes affecting VHA Drug Diversion Drug Diversion For Profit For Profit For Use For Use Theft of Property Theft of Property Child Pornography Child Pornography Patient Abuse Patient Abuse Homicide Homicide patient by patient patient by patient patient by staff patient by staff

12 When you should call us. Whenever you think something is wrong and there may be criminal conduct involved. Whenever you think something is wrong and there may be criminal conduct involved. Call us early, when allegation first surfaces. Call us early, when allegation first surfaces. Many referrals don’t result in cases. Many referrals don’t result in cases. Encourage informal contacts. Encourage informal contacts.

13 38 CFR Employee's duty to report. 38 CFR Employee's duty to report. 38 CFR Information to be reported to VA Police. 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. 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.

14 VAOIG Hotline VA Inspector General Hotline P.O. Box Washington, DC FAX:

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16 North Western Field Office Northern California San Francisco San Francisco Fresno Fresno Northern Nevada Reno RenoOregon Washington State IdahoMontana Special Agent in Charge Michael Seitler (510) Western Field Office Southern California Los Angeles Los Angeles San Diego San Diego Bakersfield BakersfieldArizona New Mexico Sothern Nevada Las Vegas Las VegasUtah Asst. Special Agent in Charge Lisa Mantione

17 Donald Pepin UNITED STATES ATTORNEY'S OFFICE Western District of Washington November 20, 2009 CAMANO ISLAND MAN INDICTED FOR SCHEME TO STEAL AND SELL DIABETIC SUPPLIES Former Pharmacy Employee Conspired with Florida Resident to Sell Stolen Insulin and Test Strips

18 VA OIG Investigation Los Angeles VAMC Pharmacy Determined: Incoming orders of test strips outpaced demand Incoming orders of test strips outpaced demand Test strips had unique lot numbers Test strips had unique lot numbers Unusually high warehouse activity by: ? Unusually high warehouse activity by: ?

19 VA OIG Investigation

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23 Above Suspicion Doctor of Pharmacy Supervisor Always volunteered for overtime Had private office Had all access - trusted

24 VA OIG Investigation Suspicious Supervisor - Not scrutinized Always volunteered for overtime – why? Money problems? - opportunity Had private office - Out of sight Had all access – trusted - Had no job duties in the warehouse - History of crimes against the VA

25 White-collar crime Within 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). criminologyEdwin SutherlandcriminologyEdwin Sutherland

26 Think about it…Hmmm Motive Motive Ability Ability Opportunity Opportunity

27 Opportunity Opportunity for fraud, bribery, insider trading, embezzlement, computer crime, identity theft, and forgery is more available to white-collar employees. fraudbriberyinsider trading embezzlementcomputer crimeidentity theftforgerywhite-collarfraudbriberyinsider trading embezzlementcomputer crimeidentity theftforgerywhite-collar

28 Think about it…Hmmm Lost VA Job (Resigned in lieu of termination) Facing criminal prosecution for thefts from 2005 – 2010: Conspiracy - 5 years / $250,000 fine. Conspiracy - 5 years / $250,000 fine. Wire Fraud - 20 years / $250,000 fine. Wire Fraud - 20 years / $250,000 fine. Transportation of Stolen Property – 10 years / $250,000 Transportation of Stolen Property – 10 years / $250,000 Receipt of Stolen Property - 10 years / $250,000 Receipt of Stolen Property - 10 years / $250,000 Estimated gross sales of $140,000 Fertility treatments

29 Ounce of Prevention Physical Security Controls Physical Security Controls Need for access Need for access Cop on the beat Cop on the beat Management Controls Management Controls Duty to report Duty to report Accountability Accountability Inventory Inventory Separation of duties Separation of duties Mandatory Witness Mandatory Witness

30 Take Away! Call the VA OIG upon suspicion Call the VA OIG upon suspicion M – O – A M – O – A Don’t circumvent the controls Don’t circumvent the controls Don’t tolerate thievery Don’t tolerate thievery

31 Thomas Oberhofer (310)


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