Investigative Reports

The OIG investigated allegations that Sanco Operating/Sanders Oil and Gas (Sanco) failed to report gas production and underreported gas sales from a Federal mineral lease, which resulted in a loss of royalties owed to the Government. We conducted a joint investigation with the Bureau of Land Management’s (BLM) Special Investigations Group and found that Sanco stopped paying Federal royalties to the Office of Natural Resources Revenue (ONRR) in 2010 and failed to report gas production from August 2010 through December 2016. In February 2018, Sanco agreed to settle this matter and entered into an agreement with the United States Attorney’s Office, District of Colorado, in the amount of $130,752 for unpaid royalties.

The U.S. Department of Labor, Office of Inspector General’s Investigations Newsletter highlights selected investigative accomplishments of our office for the period from February 1 to March 31, 2018.

We identified a potential conflict of interest issue involving a former member of the Amtrak Board of Directors who had previously been a management official at another company within the transportation industry. Specifically, Amtrak and this company developed a partnership agreement while the former Board member was still actively serving on the Amtrak Board. Our review sought to determine whether the agreement complied with applicable ethics standards.We determined that the Board member did not violate any applicable laws in this matter, and we did not find evidence that the member directly benefited from the partnership agreement. However, our review found the Board was not well-served by the company’s processes designed to identify and mitigate potential conflicts of interest.

The OIG investigated allegations that a former Government employee of the National Indian Gaming Commission (NIGC) violated Federal post-employment restrictions by communicating with current NIGC employees regarding a management agreement that the Government employee was involved in while working for NIGC.We did not substantiate the allegation against the former Government employee. We found that the employee was not substantially involved in the management agreement while working as a Government employee, therefore the contact with NIGC employees was not a violation of Federal post-employment restrictions.

The OIG investigated allegations that employees of Energy Resource Technology, Inc. (ERT) falsified Blowout Preventer (BOP) pressure test charts and engaged in unsafe welding operations while conducting oil and gas activities aboard an offshore platform in the Gulf of Mexico.We found that the ERT manager on the platform, Race Addington, concealed a failed pressure test from Bureau of Safety and Environmental Enforcement (BSEE) officials and directed offshore worker Kenneth Johns and another ERT employee to fabricate a false BOP pressure test chart. We also found that an ERT supervisor on the platform directed that welding operations be performed near an active and flowing well, which violated BSEE safety regulations.Addington, Johns, and ERT were criminally charged for their actions by the United States Attorney’s Office, Eastern District of Louisiana. Addington pled guilty to two counts of false statements and was sentenced to 12 months’ probation and 40 hours of community service. Johns pled guilty to one count of false statements and was sentenced to 24 months of probation and fined $750. ERT was sentenced to 36 months of probation, fined $4 million, and ordered to pay $200,000 in restitution.

Three employees were terminated from employment on April 25, 2018, for violating company policy by using improperly obtained parking passes to avoid paying parking fees at Chicago Union Station and for not fully cooperating with OIG agents.

PHILADELPHIA – A former Amtrak employee pleaded guilty to one count of federal program bribery April 19, 2018, in U.S. District Court.According to court documents, Timothy Miller—a former Lead Contract Administrator with Amtrak responsible for procuring equipment and services and managing the account for diesel and locomotive seat-cushion vendors—steered four fleet maintenance contracts worth more than $7.6 million to a single vendor in exchange for approximately $20,000 in bribes, trips, and other items of value.

The OIG investigated allegations that tribal officials manipulated statistical reports they submitted to the Bureau of Indian Affairs (BIA) to influence the amount of Federal funding received by the tribe. We also investigated allegations that tribal officials distributed Federal grant funds to ineligible clients, and that they terminated a former employee for notifying the BIA of potential fraudulent activities.We did not substantiate any of the allegations. We confirmed with BIA officials that the statistical reports they received from the tribe were accurate and did not have any effect on Federal funding to the tribe.We did find that tribal officials spent Federal grant funds to pay for a local cultural workshop that included some ineligible participants, however the Tribe subsequently used non-Federal tribal funds to fully reimburse the grant for the cost of the entire workshop.We found the former employee who claimed retaliation was employed in a temporary position which had expired. The tribe did not extend the terms of the position because the employee failed to meet the requirements for the position, and because their services were no longer needed.

A ticket agent resigned on April 5, 2018, prior to an administrative hearing, for stealing money from a cash drawer at Amtrak’s Los Angeles Union Station. Our investigation determined that the employee would wait until train conductors electronically scanned passengers’ tickets and would then reset the ticket’s status as if it had not been scanned at all. This process of resetting the tickets’ status allowed the tickets to be refunded or exchanged. Subsequently, the employee processed the tickets for cash refunds, taking and keeping the money from the cash drawer.

The OIG investigated allegations that a National Park Service (NPS) employee falsified his Department of Defense Form 214 (DD Form 214), Certificate of Release or Discharge from Active Duty, and used the forged document to obtain employment with the Federal Government. The anonymous complainant also alleged that the employee offered to falsify another individual’s DD Form 214, to help that person obtain Federal Government employment.We found no evidence that the employee falsified his official DD Form 214, nor did we find evidence that he assisted anyone else in altering their military records. The employee’s discharge certificate on file with the Federal Government matched the certificate we obtained from his official military records.

The OIG investigated allegations that a lease operator may have submitted false Oil and Gas Operations Reports (OGOR) to the Office of Natural Resources Revenue (ONRR) to avoid paying plugging and abandonment costs for a well.We found that from May 2015 to January 2017 the lease operator did not submit actual production measurements as required, but instead estimated production for the well at one barrel per month in the OGORs he submitted to ONRR. We also found that the Bureau of Land Management (BLM) determined that the well was not capable of producing minerals in paying quantities and issued the operator an order to address BLM’s determination.

The VA Office of Inspector General Administrative Investigations Division issued a report titled: Administrative Investigation of Conflict of Interest, Nepotism, and False Statements within the VA Office of General Counsel, Washington, DC.

Please click the link below to access a press release describing this and other related documents.

An employee in Perryville, Maryland, received a 10-day suspension March 27, 2018, after posting an image on social media that violated company policy. After receiving an anonymous complaint in October 2017, we found that the employee violated multiple company policies by posting an inappropriate image on Facebook.