Investigative Reports

Three Chicago-based employees were terminated from employment on December 20 and December 23, 2019, and two more resigned on December 18, 2019 and January 2, 2020, in lieu of termination prior to their administrative hearings. The five former employees participated in a medical fraud scheme in violation of company policies.Our investigation found that the former employees provided a chiropractor, based in Dolton, Illinois, with their medical and personally identifiable information, typically their names and dates of birth or those of their dependents, in exchange for cash kickbacks. The chiropractor used the information to fraudulently bill Amtrak’s health insurance plan for services that were not provided. In addition, all five employees lied to our agents during their interviews.

A Reservation Sales Agent based in Philadelphia was terminated from employment on December 23, 2019, for submitting falsified medical documentation to extend her medical leave of absence. She had previously entered into an Alternative Resolution Dispute agreement on November 4, 2019, with the Magisterial District in Bucks County, Commonwealth of Pennsylvania, and received 12 months’ probation, 10 hours community service, and was directed to pay restitution of $228 to Amtrak.

Gladys Perez, Coach Cleaner, Los Angeles, California, was terminated from employment on December 5, 2019, following an administrative hearing for violating company policy. Our investigation found that Perez participated in a health care fraud scheme in which Amtrak’s health care plan was billed for acupuncture and other services that were not actually provided. On October 10, 2019, Perez signed a pretrial diversion letter agreement, which was accepted in U.S. District Court for the Central District of California, wherein she admitted to committing two counts of health care fraud in furtherance of the scheme to defraud the company’s health plan.

The OIG investigated allegations that workers aboard an offshore oil production platform violated Federal regulations, which resulted in an explosion that killed three platform workers and spilled oil into the Gulf of Mexico in November 2012.We found that three individuals and three companies—Black Elk Energy Offshore Operations, LLC (Black Elk), Wood Group PSN, Inc.; and Grand Isle Shipyards, Inc.—were negligent in their responsibility to safely conduct welding operations aboard the offshore oil production platform. We also found the parties involved did not comply with welding regulations issued by the Bureau of Safety and Environmental Enforcement (BSEE), which contributed to the fatal explosion.The United States Attorney’s Office for the Eastern District of Louisiana prosecuted this matter, and all six parties pleaded guilty and were convicted of violations of the Clean Water Act. Black Elk also pleaded guilty to violations of the Outer Continental Shelf Lands Act. The criminal sentences for all six parties resulted in the combined total of 168 months of probation and $6,505,000 in criminal fines.

An Amtrak Assistant Conductor in Pontiac, Michigan, was terminated from employment on November 12, 2019, following an administrative hearing for violating company policy. Our investigation found that the employee submitted false documentation and made false and misleading statements regarding his claim that he sustained a work-related injury. Additionally, the employee was not truthful when we interviewed him during this investigation.

We investigated an allegation that Secretary of the Interior David Bernhardt, when he was the Deputy Secretary, interfered with the U.S. Fish and Wildlife Service’s (FWS’) scientific process during an assessment of the effects of pesticides on endangered species. We investigated whether Secretary Bernhardt exceeded or abused his authority by influencing consultations between the FWS and the U.S. Environmental Protection Agency on the proposed registration or re-registration of three pesticides, and whether his involvement in the consultations violated his ethics pledge or Federal ethics regulations.We found that Secretary Bernhardt reviewed a draft FWS opinion on the potential biological effects one of the three pesticides could have on endangered species, and he instructed the FWS team developing the opinion to change its method for determining the potential effects. This change has delayed the completion of the opinion, but we found no evidence that Secretary Bernhardt exceeded or abused his authority or that his actions influenced or altered the findings of career FWS scientists. We also found no evidence that Secretary Bernhardt’s involvement in this matter violated his ethics pledge or Federal ethics regulations.On January 7, 2021, this report was corrected to remove an inaccurate footnote. This correction did not affect our findings.

We investigated an allegation that Douglas Domenech, Assistant Secretary for Insular and International Affairs, U.S. Department of the Interior (DOI), violated his Federal ethics pledge under Executive Order No. 13770 by meeting with an official from his former employer, the Texas Public Policy Foundation (TPPF), during the required 2-year recusal period following Domenech’s resignation from the TPPF.Although we did not find that Domenech violated his ethics pledge as alleged, we found that he did violate Federal ethics regulations that prohibit Federal employees for 1 year from participating with their former employers in particular matters involving specific parties. Domenech, who began working for the DOI in January 2017 as a special Government employee (SGE), arranged and held two meetings with a TPPF attorney in April 2017 about issues in litigation between DOI bureaus and the TPPF. Domenech had a duty to consider whether his involvement in these meetings would cause a reasonable person to question his impartiality, and his failure to make that determination violated the regulation.Domenech did not violate his ethics pledge, however, because he was an SGE when the meetings took place and thus was not required to sign the pledge at the time. He signed the pledge in September 2017, after he became a permanent DOI employee.

The OIG investigated allegations that a gas marketing company, B. Charles Rogers Gas, Ltd. (BCR), underreported natural gas liquid volumes and overcharged companies producing gas from Federal wells in New Mexico, which resulted in a loss of Federal and tribal mineral royalties.We found that Billy Charles Rogers, Jr., and Wynon Rogers, co-owners of the BCR, and Thomas R. Lutner, III conspired to defraud approximately 30 oil and gas companies. From 2003 through 2015, the BCR purchased gas from companies with Federal, Indian, State, and private leases in the San Juan Basin area of New Mexico and Colorado. Lutner, who worked as a gas supply originator, then purchased aggregate gas packages from the BCR. The Rogerses and Lutner then provided producers false transaction statements in connection with the BCR’s gas purchases that underreported the volume and value of the natural gas liquids that the BCR purchased. Lutner and the Rogerses knew the true volumes and prices for the natural gas liquids, but the BCR provided producers with false monthly statements and paid them far less than what the BCR owed. The Rogerses then shared the fraudulent profits with Lutner.As a result of the BCR’s fraud scheme, the victim companies relied upon the false gas marketing statements issued to them by the BCR and unknowingly failed to properly calculate mineral royalties associated with Federal and tribal leases. The companies thus paid less in royalties than they should have.The United States Attorney’s Office for the Northern District of Texas criminally prosecuted this case, resulting in guilty pleas by all three co-conspirators for violating Title 18 U.S.C. § 371, conspiracy to commit wire fraud. Charles and Wynon Rogers were each sentenced to serve 6 months in prison and 2 years of probation and ordered to pay joint restitution totaling $7,718,876.60. Lutner was sentenced to serve 10 months in prison and 1 year of probation and ordered to pay restitution totaling $16,900,737.66. As a result, over $24.6 million was returned to the oil and gas companies victimized by this criminal conspiracy.Additionally, the three subjects paid approximately $4.375 million to settle a civil false claims act case with the Department of Justice’s Civil Division. The funds received recovered unpaid Federal mineral royalties the subjects owed to the Office of Natural Resources Revenue (ONRR).

Michael Hollingsworth, a resident of New York, pleaded guilty in U.S. District Court, Southern District of New York, on November 19, 2019, for accepting a gratuity in return for his involvement in falsifying an Amtrak pre-employment drug test. According to the indictment, Hollingsworth worked as a drug test sample collector. He received cash from an Amtrak job applicant to submit a fraudulent sample to ensure the applicant passed Amtrak’s drug screening requirement. Hollingsworth will be sentenced at a later date.