Investigative Reports

On January 30, 2018, an Amtrak supervisor was dismissed after an administrative hearing found that he violated company policy by accepting gifts and gratuities from Bayway Lumber (Bayway), a former Amtrak-approved vendor based in Linden, New Jersey.

The OIG conducted a joint investigation into allegations that the owners of Encore Services, LLC and Ideal Consulting, LLC bribed Chippewa Cree Tribe (CCT) officials to sign and backdate agreements, which allowed the companies to steal millions of dollars from the CCT. We also investigated allegations that CCT employees conspired to embezzle funds from the CCT. We conducted this investigation jointly with the Health and Human Services OIG, the Environmental Protection Agency OIG, and the Internal Revenue Service (IRS) Criminal Investigation Division.We substantiated the allegations. First, we found that Encore Services, owned by Zachary Roberts, Martin Mazzara, and Richard Broome, used a backdated agreement along with inflated invoices, to obtain over $3.5 million between July 2011 and August 2013 from the CCT’s online lending business, Plain Green. Neal Rosette, Sr. and Billi Anne Morsette served as Plain Green’s CEO and COO, respectively. The inflated amount of $1.2 million was then kicked back to Ideal Consulting, owned by Rosette, Sr., Morsette, and a third person.Second, we found that Encore Services owners were also involved in the backdating of an agreement between Plain Green, Encore Services, and Ideal Consulting, which was used as cover for the $1.2 million in bribes paid to Rosette, Sr., Morsette, and the remaining owner of Ideal Consulting, to help facilitate the initial scheme.Finally, we found that a CCT official authorized a contract with a CCT company, First American Capital Resources (FACR), for FACR’s CEO and COO, Rosette, Sr. and Morsette, respectively, to provide professional administration services related to disaster programs tied to a flood that occurred on the Rocky Boy Indian Reservation in June 2010. The CCT subsequently paid FACR over $55,000 for services provided, however, $30,000 of that amount was diverted to a slush fund controlled by the CCT official that approved the contract, and Rosette, Sr. and Morsette fraudulently obtained $10,000 each through the scheme.Encore Services pleaded guilty to conspiracy to commit wire fraud and money laundering and was ordered to pay $2.5 million in restitution to the CCT. Roberts and Mazzara pleaded guilty to conspiracy to commit wire fraud and were each sentenced to 20 months’ incarceration, 12 months’ probation, 400 hours community service, and ordered to pay $700,000 in restitution to the CCT, jointly and severally with Encore Services. Broome, pleaded guilty to misprision of a felony and was sentenced to 36 months’ probation and ordered to pay a $10,000 fine.Rosette, Sr., pleaded guilty to accepting bribes from Encore Services, income tax evasion and conspiracy to embezzle tribal funds. He was sentenced to 38 months in prison and 24 months’ probation. He was ordered to pay $1.2 million in restitution to the CCT, jointly and severally with Ideal’s other owners, and $232,680 in restitution to the IRS. Rosette, Sr. was also ordered to pay an additional $55,792 in restitution to the CCT, jointly and severally with Morsette, for embezzlement.Morsette pleaded guilty to accepting bribes from Encore Services, willfully failing to file a tax return and conspiracy to embezzle tribal funds. She was sentenced to 41 months in prison and 36 months’ probation. She was ordered to pay $1.2 million in restitution to the CCT, jointly and severally with Ideal’s other owners, and $165,253 in restitution to the IRS. Morsette was also ordered to pay an additional $55,792 in restitution to the CCT, jointly and severally with Rosette, Sr. for embezzlement.All of the defendants were prosecuted in U.S. District Court, Great Falls, MT.

OIG investigated allegations that Citation Oil & Gas Corporation (Citation) misreported mineral royalty data to the Office of Natural Resources Revenue (ONRR) and underpaid Federal royalties associated with the production of coalbed methane gas from Federal wells located in Wyoming.We determined that for the period January 2006 through December 2015, Citation deducted transportation costs and field fuel volumes inconsistent with marketable condition rules when it calculated and reported royalties to ONRR.In December 2017, Citation entered into a settlement agreement with the U.S. Department of Justice, and agreed to pay $2,250,000 to resolve the civil false claims and related matters pending before the Interior Board of Land Appeals.

The OIG investigated allegations that a U.S. Fish and Wildlife Service (FWS) supervisor and a family member, also an FWS employee, mishandled and potentially embezzled cash collections and donations at an FWS refuge.Our investigation determined that the FWS employees at the refuge violated the Treasury Financial Manual by not depositing the cash donations received from the public into the U.S. Treasury. We found that between October 2008 and October 2017, the employees sent $67,568.45 in cash donations to the refuge’s non-profit partner for deposit into the partner’s accounts, not into the U.S. Treasury as required. We did not find evidence of embezzlement.

The OIG investigated allegations that an Indian community councilman failed to pay the Bureau of Indian Affairs (BIA) the required fees associated with farming and grazing leases on an Indian reservation.Our investigation determined the councilman failed to pay the required fees for his leases from 2008 to 2014, resulting in a $135,375 delinquency owed to the affected tribe. The councilman admitted to the tribal council that he had not paid his lease fees and agreed to pay the tribe $13,537 each year for 10 years. We also determined that the BIA Realty Office was aware in 2013 that the councilman had not paid the required fees and subsequently canceled the councilman’s leases for nonpayment.As the councilman had entered into a repayment plan and BIA had canceled his leases, we closed our investigation. The U.S. Attorney’s Office for the District of Montana declined to prosecute.

OIG investigated allegations that a U.S. Fish and Wildlife (FWS) human resource employee accessed the protected personnel files of a Federal employee without authorization, and that another unknown FWS employee removed a document from the office of a senior manager.We found that the human resource employee unlawfully accessed the Electronic Official Personnel Folder and USA Staffing databases and queried records related to a Federal employee who had been selected for a position. According to the human resource employee who accessed the records, she did so at the behest of another FWS employee, who was upset that she had not been selected for the position.We also determined that the human resources employee unlawfully shared information and documents from the employee’s personnel files, which were protected under the provisions of the Privacy Act of 1974, to the FWS employee requesting the information and to another FWS employee. The FWS employee requesting the protected information from the human resources employee then used information from those records to facilitate FOIA requests she made to FWS and to further EEO claims she had made.We also found that another FWS employee wrongfully obtained a copy of a draft email prepared by a senior FWS manager, and provided the email to other FWS employees, including the two employees that received the protected information from the human resources employee.We referred our findings to the U.S. Attorney’s Office for the Northern District of Georgia, which declined prosecution.

On January 18, 2018, a former Amtrak Customer Service Representative in Indianapolis, Indiana, pleaded guilty to one misdemeanor count of theft of government funds, in violation of 18 U.S.C. § 641. Our investigation determined that the former employee falsified her application for food stamp benefits while employed by Amtrak. The United States District Court for the Northern District of Illinois ordered her to pay $69,091 in restitution to the U.S. Department of Agriculture and sentenced her to two years of probation.

OIG investigated allegations of theft from the Seminole Nation of Oklahoma (SNO) through counterfeit checks associated with an account that may have contained Federal funds.Our investigation determined that multiple individuals from the Wichita, KS area cashed counterfeit checks totaling more than $20,000. The checks were made to look like they had been issued by legitimate Wichita businesses, however, the routing and bank account information printed on the checks resulted in the funds being withdrawn from an SNO bank account.The U.S. Attorney’s Office, Eastern District of Oklahoma, declined prosecution. We forwarded our report of investigation to the Wichita Police Department, Financial Crimes Section and closed our investigation.

The OIG investigated whether National Park Service (NPS) management appropriately handled sexual misconduct complaints at a National Recreation Area (NRA) in Texas. The initial complainant reported that an employee at the NRA exposed himself to her and sexually assaulted her on multiple occasions between 2012 and 2014. The complainant alleged she reported the incidents to NPS management when they occurred, but they failed to take any action.Our investigation did not find any evidence that the complainant reported the incidents to her supervisor as she reported in her complaint. We determined that once management learned of the allegations in 2016, they took swift action to address the issues and handled the complaint appropriately.During our investigation, another employee reported that she had also been a victim of sexual misconduct by the same NRA employee. She acknowledged that she did not report the incident to management when it occurred. Again, we determined that management took decisive and immediate action as soon as they learned of this additional allegation.We also found that NPS management had received three additional allegations of sexual misconduct at the NRA in previous years that were unrelated to this employee. Our review concluded that those previous incidents were reported and appropriately handled.A criminal investigation into the actions of the NRA employee is ongoing by the NPS.

The OIG investigated allegations that a BIA manager had sexually harassed his direct subordinate.The employee and two other women, both of whom had reported to the manager in the past, told us that he had subjected them to unwelcome and inappropriate touching or sexual remarks. The employee said the manager touched her inappropriately and made unwelcome remarks of a sexual nature to her. The second woman, also a BIA employee, said the manager had made inappropriate remarks to her when she worked for him. The third woman, who no longer worked for the BIA, said that when she worked for the manager he had regularly hugged her when she did not want him to.When we interviewed the manager, he denied most of the allegations against him, but he later admitted it was possible he had made an inappropriate remark to the first employee. The manager left the Department after we began our investigation.We also found during our investigation that two regional BIA managers knew about some of the manager’s alleged misconduct and should have acted sooner to address it.

We conducted this investigation in response to allegations filed with the Department of Defense (DoD) Hotline by a sub-contractor who claimed that Leidos, Inc., non-selected the Complainant for inclusion on a bridge contract in reprisal for her making protected disclosures to company and Government officials.

In May 2016, the Office of Inspector General (OIG) initiated an investigation into an allegation that a high-level political appointee (Political Appointee) at an agency within the U.S. Department of Commerce (Agency) was using the Agency’s account with a local taxicab company (Cab Company) for personal trips that were notauthorized under Agency policy. OIG found that from September 2014 to May 2016, Political Appointee misused the Agency’s account with Cab Company by charging it for the cost of approximately 130 cab rides prohibited by Agency policy.

This Newsletter provides a bimonthly summary of selected investigative accomplishments.

OIG investigated allegations that a National Park Service (NPS) senior official in the Northeast Region used his position for personal gain when he requested unnecessary design and construction improvements to a park housing unit he expected to rent as his personal residence. We also investigated allegations that the senior official made improper position changes by preselecting a staff member who did not meet qualifications and that he improperly served on park partner organization boards.We found that the NPS senior official created the appearance of using his public office for private gain when he asked his subordinate employee to include specific design and construction changes in the renovation proposal for a historic townhouse, which was the park housing unit in which he planned to reside. The changes were included in the final design plans and added approximately $32,000 to the cost of the project, but at the time of our report, the senior official had decided not to move into the unit and NPS had delayed the renovations.We also found that some employees and contractors did not agree with the proposed changes, and only one person raised these concerns before the project was awarded. Additionally, we found that members of the Regional Development Advisory Board, whose role was to review and approve the proposed renovation plans, were not aware that the senior official had intended on moving into the unit.We did not substantiate that the NPS senior official made improper position changes by preselecting staff members, and we found that while the senior official did serve as an NPS liaison for two park partners, his participation did not violate NPS or ethics regulations.

OIG investigated an allegation that an employee with the Office of Surface Mining Reclamation and Enforcement (OSMRE) attempted to send a spreadsheet containing personally identifiable information (PII) for over 180 DOI employees to his personal email account.We found that the employee made repeated attempts to send the spreadsheet from his Government email account to his personal account, in violation of the DOI’s employee policy on network use. We confirmed, however, that the DOI’s IT security systems blocked the emails and prevented the PII from being transmitted to his personal account or computer. The employee’s supervisor confiscated the employee’s work computer the day he learned of the attempts to email the spreadsheet and placed the employee on administrative leave. When we first interviewed the employee, he denied trying to send the spreadsheet containing PII to his personal email, but during a later interview he admitted that he had. He also told us that he tried to send the spreadsheet because he liked to save and organize files on his home computer and not for illegal or inappropriate purposes. In addition, we found that he had attempted to send the PII knowing that his home computer had a software program installed on it that allowed for outside access. Finally, we learned that the employee had been disciplined in the past for lack of candor.We referred this case to the U.S. Attorney’s Office, Washington, DC, which declined to prosecute.

On March 2, 2017, the VA Office of Inspector General Administrative Investigations Division received allegations that Ms. [redacted] , former (resigned) Deputy Counsel, Office of the General Counsel (OGC), improperly received the higher locality pay for Los Angeles, CA, while she lived and worked in Phoenix, AZ. We found that Ms. [redacted] received about $6,500 in Los Angeles locality pay for 6 months while residing and reporting for duty in Phoenix.

The VA Office of Inspector General Administrative Investigations Division received an allegation that Dr. Gavin West, former (reassigned) Senior Medical Advisor to Dr. Thomas Lynch, Assistant Deputy Under Secretary for Health (ADUSH) for Clinical Operations, and a former (resigned) VA employee misused VA travel funds for personal rather than official business. We did not substantiate the allegation of a misuse of VA travel funds, and we will not discuss it further in this report.In reviewing Dr. West’s personnel records related to the original allegation, we found that Dr. West was improperly paid $19,800 for Temporary Quarters Subsistence Expenses (TQSE) in connection with a Permanent Change of Station (PCS) move that he did not execute. The TQSE was paid to Dr. West to relocate from his then duty station in Salt Lake City, UT to Washington, DC, after accepting a position as the Special Assistant to the ADUSH for Clinical Operations on September 22, 2013. Dr. West did not relocate nor did he repay VA for the TQSE. We also found that his annual salary was increased from $188,049 to $206,527 to make his “salary competitive with the market rate in the Washington DC Metro geographical region.” Because he did not relocate, this resulted in overpayments to Dr. West of over $55,000.