Investigative Reports

OIG investigated allegations that a former attorney-advisor for the U.S. Department of the Interior (DOI) Office of the Solicitor (SOL), may have violated post-employment restrictions by representing a DOI employee in her Equal Employment Opportunity complaint against the Bureau of Indian Affairs (BIA). The former attorney-advisor made a counter allegation that she was the subject of harassment by the SOL.We found no evidence the former attorney-advisor was involved in matters during her tenure at DOI that would have prohibited her from representing her client. We also determined the former attorney-advisor’s counter allegation was outside our investigative purview.

The Office of Inspector General (OIG) received an anonymous complaint alleging that Secretary of Veterans Affairs David Shulkin and other senior leaders misused VA funds by taking an official July 2017 trip to Europe for more personal than official activities. Secretary Shulkin traveled with a group that included senior VA leaders, his wife, and a six-member security detail. The 11-day trip included two extensive travel days and three-and-a-half days of official events—with a cost to VA of at least $122,334. The VA delegation had a day-and-a-half of meetings with Danish veterans’ healthcare officials and experts in Copenhagen and attended the Ministerial Summit on Veterans’ Affairs in London. Secretary Shulkin stated that he also worked on VA matters when there were no official functions. The group’s schedule, however, included significant time for preplanned tourist activities by Secretary Shulkin, his wife, and others on the delegation. After a thorough investigation, OIG’s findings included (1) the Chief of Staff’s alteration of a document and misrepresentations to ethics officials caused Secretary Shulkin’s wife to be approved as an “invitational traveler,” which authorized VA to pay her travel costs (although only airfare was claimed); (2) Secretary Shulkin improperly accepted a gift of Wimbledon tickets and related hospitality; (3) a VA employee’s time was misused as a personal travel concierge to plan tourist activities exceeding that necessary for security arrangements; and (4) travelers’ documentation was inadequate to determine the trip’s full costs to VA. The OIG did not assess the value of the trip to VA or determine whether the Europe travel, as conducted, was “essential,” per VA policy. The OIG made five recommendations to ensure reimbursement to VA by the travelers of all unallowable expenses incurred; redress of any VA employee misconduct; and retraining of VA personnel on ethics and travel policy matters.

We initiated an investigation after receiving an allegation that employees at Chicago Union Station wrongfully kept approximately $1,700 in cash that was turned in to the ticket counter to be processed as “lost and found.”

The OIG and the FBI jointly investigated allegations that two employees stole school funds from the Shonto Preparatory School (SPS) in Arizona, which is funded by grants from the Bureau of Indian Education.The investigation determined that former SPS Business Manager Felicia Barlow stole $20,430.87 by fraudulently obtaining three SPS checks. Barlow pled guilty to one count in violation of 18 U.S.C. § 1163, Embezzlement and theft from Indian tribal organizations, in U.S. District Court for the District of Arizona, and was sentenced to 2 years of probation and ordered to pay $20,430.87 in restitution. A second SPS employee was not charged.

OIG investigated allegations that the United Mine Workers of America Health and Retirement Funds (UMWAF) was not adhering to Federal law and regulations concerning three federally supported health benefit plans. According to the allegations, the UMWAF enrolled beneficiaries in the combined benefit fund (CBF) after the enrollment cutoff date and inflated the beneficiary numbers by retaining deceased beneficiaries in its records. The UMWAF reportedly also provided legal advice to a coal company during bankruptcy proceedings and failed to pursue recovery of other coal companies’ delinquent benefit plan premiums. Lastly, the UMWAF allegedly falsified enrollment documents so that beneficiaries would qualify for Federal support.We found that the UMWAF enrolled 1,909 beneficiaries into the CBF after the enrollment cutoff date and paid this population an estimated $96 million in benefits. After we initiated our investigation, however, the DOI Office of the Solicitor concluded that there was conflicting authority on this issue. The Office of Surface Mining Reclamation and Enforcement (OSMRE) will review beneficiary lists with this in mind before completing the fiscal year 2018 transfer requests. We could not determine if the UMWAF inflated beneficiary numbers by retaining deceased beneficiaries, because it did not provide detailed lists to the Government during funding requests.We also found no evidence that the UMWAF provided legal advice to a coal company during its bankruptcy proceedings, that the UMWAF failed to pursue delinquent coal operator premiums, and that the UMWAF falsified enrollment documents. We presented our findings to the U.S. Attorney’s Office for the District of Columbia, which declined prosecution.

OIG investigated allegations that an employee at the Office of the Special Trustee for American Indians (OST) lied about her cancer diagnosis, forged medical records, falsified documents, and abused her own sick leave and leave donated by coworkers.Our investigation confirmed the allegations. We found no evidence that the OST employee had been diagnosed with cancer or that she received medical care for cancer as she claimed. On 15 occasions, the employee submitted physicians’ notes to OST containing forged signatures from 5 separate medical providers. As a result of the falsified physicians’ notes, the employee was authorized 256 hours of her own sick leave and received 28 hours of donated leave from her coworkers.The employee left the Department before we issued our report.

The OIG investigated allegations that the Bureau of Land Management’s (BLM’s) Wyoming State Office (WYSO) had entered into an unneeded contract for oil-and-gas-record digitization services, had improperly selected the contractor, and had improperly carried the funds for the digitization project across fiscal years. We also investigated an allegation that WYSO had not received proper compensation for record copying and other clerical services it had performed for an oil and gas company.Our investigation did not substantiate these allegations. The BLM Washington (DC) Office had encouraged WYSO and other state offices to identify high-value records, which included WYSO’s oil and gas records, and to begin digitizing them to improve record retention and reduce costs for storing physical records. WYSO used a contractor that was competitively selected by the U.S. Government Publishing Office to provide scanning and digitization services to multiple Federal agencies. We confirmed that WYSO had carried funds used for this project across fiscal years, but we learned that it had the authority to do so and used the appropriate financial mechanism. We also confirmed that WYSO was paid for the copies and the other services it provided to the oil and gas company.

OIG investigated discrepancies identified after the National Park Service (NPS) conducted an electronic audit of the fee collection software at the Petrified Forest National Park (PEFO), located in eastern Arizona, which compared cash collected at the park with cash deposits made into the bank.Our investigation determined that from approximately 2010 through March 2016, Sharon Baldwin, Supervisory Visitor Use Assistant, exploited vulnerabilities in the NPS remittance process at PEFO and stole approximately $313,000 in fees collected at the park. Baldwin pled guilty in Federal court in AZ to violating Title 18 U.S.C. § 641, theft of Government money, and was sentenced to one year and one day in prison and ordered to pay $313,000 in restitution to PEFO.We also found that the PEFO staff who assisted Baldwin with the cash counts were never formally trained on the NPS remittance process and relied on the training given to them by Baldwin, which contributed to Baldwin’s scheme remaining undetected for several years.

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.