Fraud Prevention Presentation.pptx

U.S. DOC Inspector General Office of Investigations

Recovery Act Oversight Program Fraud Prevention Training

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5 April 2010 Department of Commerce OIG Investigations

Welcome

Greetings from the U.S. Department of Commerce, Office of Inspector General, Office of Investigations. We would like to congratulate you and your co-workers for winning an award pursuant to the American Recovery and Reinvestment Act, (a.k.a. the Stimulus Bill).

As part of our Recovery Act Oversight Program, we ask that you participate in our Fraud Prevention e-training by reviewing the following slides.

Thank you for your participation.

Offers of gifts, bribes or other gratuities! – that is, where you, the employee, gets the offer – WHAT TO DO

Even the appearance of a conflict

5 April 2010 Department of Commerce OIG Investigations Who We Are

We are a federal law enforcement branch within the DOC Office of Inspector General, primarily staffed with:

Special Agents / Criminal Investigators Computer Crimes Unit

Our investigative authority includes pursuing allegations of:

Criminal violations Civil fraud violations Administrative violations

Department of Commerce OIG Investigations Investigative Jurisdiction Our investigative jurisdiction includes monitoring all of the funding (i.e. contracts & grants), programs, and employees of DOC Headquarters and each of the DOC bureaus:

Grant frauds Contract frauds Antitrust violations Embezzlements Property thefts Conflicts of Interest Bribery, kickbacks False claims & invoices False statements & certifications Bank fraud Money laundering DOC credit card abuse Identity theft scams What We Investigate

A person who knowingly perpetuates a falsehood with the intention of procuring personal property, the payment of cash, the making of a loan, credit, the extension of credit, the execution of a contract of guaranty or suretyship, the discount of an account receivable, or the making, acceptance, discount, sale or endorsement of a bill of exchange or promissory note before the benefit of either that person or another person.

NOT MISTAKES - Lying, stealing & cheating

OIG Recovery Act Authority

OIG Recovery Act Authority

The Recovery Act gives our office specific authority to review and investigate any concerns regarding the use of DOC Recovery Act funds. Our OIG agents are authorized to:

Examine all contractor, subcontractor, state or local records related to Recovery Act funding transactions

Initiate investigations and work in connection with OIG Auditors

Interview employees

Recovery Act Oversight Program U.S. DOC/OIG Investigations “Recovery Act Oversight Program”

In response to the Stimulus bill, we developed an oversight program for DOC which is responsible for:

Monitoring all DOC Recovery Act awards

Providing fraud awareness training to DOC staff working with Recovery Act awards.

Providing fraud prevention training to contractor and grant recipients working with DOC Recovery Act awards.

Offers of gifts, bribes or other gratuities! – that is, where you, the employee, gets the offer – WHAT TO DO

Even the appearance of a conflict

5 April 2010 Recovery Act Oversight Program

Our Program Mission

To work with DOC bureaus and funding recipients to ensure that DOC Recovery Act awards are monitored and effectively protected from waste, fraud and abuse.

Offers of gifts, bribes or other gratuities! – that is, where you, the employee, gets the offer – WHAT TO DO

Even the appearance of a conflict

5 April 2010 Fraud Prevention Training

Fraud Prevention Training Goals

Provide fraud prevention training to funding recipients.

Encourage open communication with agency representatives.

Promote honesty, efficiency and fraud awareness efforts.

Deter instances of waste, fraud and abuse with DOC Recovery Act awards.

Offers of gifts, bribes or other gratuities! – that is, where you, the employee, gets the offer – WHAT TO DO

Even the appearance of a conflict

5 April 2010 What is Contract and Grant Fraud?

Contract / Grant Fraud

“An act of deceit, trickery or deliberate neglect, committed by a federal funding recipient against the funding agency for the purpose of gaining something of value.”

One or more of the following acts has usually occurred:

Misappropriation of federal funds or property Deliberate neglect of procurement rules and guidelines Deliberate falsification of information

What is Contract and Grant Fraud?

Contract / Grant Fraud

May be hidden, discreet or completely overt

May involve a large OR small portion of a contract or award

May involve a conspiracy between subcontractors and/or government officials

May be a one-time incident or ongoing matter

Relevant Criminal and Civil Statutes 18 U.S.C. 666 “Theft or bribery concerning programs receiving federal funds”

18 U.S.C. 641 “Embezzlement of Public Money, Property or Records”

18 U.S.C. 1001 “False statements”

18 U.S.C. 287 “False, fictitious or fraudulent claims”

18 U.S.C. 371 “Conspiracy to defraud U.S.”

15 U.S.C. 1 “Sherman Antitrust Act”

31 U.S.C. 3729 “Civil False Claims Act”

Investigation Examples

GRANT FRAUD

A NIST Advanced Technology Program recipient was convicted for misapplying approximately $500,000 of grant funds to pay for personal expenses, including rent, home renovations, cleaning services, restaurant meals, and miscellaneous household items.

Four officials of an EDA Revolving Loan Fund program were convicted of fraud, conspiracy and money laundering after converting nearly $800,000 to their personal use.

Investigation Examples

CONTRACT FRAUD

The CEO of a corporate entity under government contract was convicted of false claims for submitting invoices under a “Buy America” program, certifying U.S. origin of products supplied, when in fact the products originated in China.

The CEO of a company participating in a government funded program was convicted of wire fraud for submitting false bids from non-existent companies, the purpose of which was to fix prices and fake a competitive process.

Keeping it Safe

Please consider our “Tips for Keeping it Safe”…

Keeping it Safe Follow government rules, regulations and guidelines

Act in good faith

Ask questions - do not assume the answers

Report accurate information

Promote efficiency, honesty and professionalism

Maintain fraud prevention refresher training

Provide employees with a copy of contracting rules and regulations Tips for Keeping it Safe

Keeping it Safe Avoid “grey areas” or risky situations with subcontractors

Require full disclosure from employees and subcontractors

Reward employees for identifying project weaknesses, waste, fraud and abuse

Stay organized

Report any problems timely and with full disclosure

Communicate openly and often with your agency representative

Tips for Keeping it Safe

FRAUD PREVENTION

Please be aware of the following Red Flags a.k.a.

“THINGS NOT TO DO”…

FRAUD PREVENTION

Bid rigging – bidding arrangements are NEVER permitted

Price fixing and/or pricing agreements

Scams and fraudulent agreements with subcontractors

Defective & inflated pricing

Salaries Consultants Equipment Goods and services

PRE-AWARD

THINGS NOT TO DO

FRAUD PREVENTION

Offer bribes, gifts or gratuities to government officials

Give false or misleading proposal information

Withhold information which is required on proposals

Embellishment - unrealistic performance goals and proposed promises

Double dip – compete for work identical to another award you already received from another federal agency.

PRE-AWARD

FRAUD PREVENTION

Double billing

Inflated billing

Poor accounting system

Deliberate “accounting error”

Deliberate product overage

Product substitution

Shifting costs often from one category or cost account to another without approval

POST-AWARD

FRAUD PREVENTION

Embezzlement of project funds or equipment

Misappropriation of project funds or equipment

Deliberate waste of project funds, equipment and resources

Unauthorized travel costs

Conflicts of interest

Less than arms length transactions

Use of fictitious vendors

FRAUD PREVENTION

Give unauthorized personnel access

Maintain under-qualified personnel

Falsify time & attendance records Maintain “Ghost” employees

Conduct unauthorized changes to personnel

Maintain inadequate internal controls (i.e. one person handling everything)

FRAUD PREVENTION

Co-mingle projects

Inappropriate use of cash

Alter or destroy documents

Mislead government contracting/program officials

Mislead auditors/inspectors

Mislead your employees

FRAUD PREVENTION

Claim ignorance of rules

Attempt to convince agency representatives to change or ignore the rules

Interpret rules to your benefit or satisfaction

Neglect or circumvent “Buy American” provisions unless authorized in writing

The Golden Rule…

“The Golden Rule of Fraud Prevention”

WHEN IN DOUBT….DON’T DO IT.

Call your agency representative for appropriate guidance.

Offers of gifts, bribes or other gratuities! – that is, where you, the employee, gets the offer – WHAT TO DO

Even the appearance of a conflict

5 April 2010 Whistleblower Protection

Did you know…..

Every person working on Stimulus funded projects has Whistleblower protection?

Whistleblower Protection Whistleblower Protection – Recovery Act The Recovery Act provides explicit protections for non-federal whistleblowers. These protections apply to all contractor and grantee staff working on Recovery Act awards. The Act prohibits funding recipients from discharging, demoting or discriminating against any employee for disclosing any concern to their supervisor, the head of a federal agency or his/her representatives, or the OIG information that the employee believes is evidence of:

Gross mismanagement or waste of grant or contract funds.

Danger to public health or safety related to the use of funds.

Abuse of authority related to the implementation or use of funds.

Violation of law, rule or regulation related to an agency contract or grant awarded or issued related to funds.

Whistleblower Protection Whistleblower Protection - OIG Responsibilities

Investigate all Whistleblower complaints related to Recovery funds that are not frivolous or being addressed by another official proceeding.

Report of our findings to the complainant, complainant’s employer, head of DOC and the Recovery Accountability and Transparency Board within 180 days (extensions may be applied for).

Provide a written explanation to complainants and their employers if we decline to pursue a Whistleblower allegation.

Whistleblower Protection Whistleblower Protection - OIG Responsibilities

Uphold the Privacy Act – by NOT disclosing information about complainants.

Provide information in our semi-annual reports to congress to include:

Investigations we declined to pursue and Investigations requiring a time extension

Practice Scenarios

You discover that a co-worker submitted false information on invoices and receipts to your government agency.

a) Contact the OIG and your agency representative Confront the employee Gather evidence about the falsification A & C

Offers of gifts, bribes or other gratuities! – that is, where you, the employee, gets the offer – WHAT TO DO

Even the appearance of a conflict

5 April 2010 Practice Scenarios

2. A subcontractor employee tells you he believes a scam may be going on between upper management at your company and the subcontractor’s company.

a) Ignore it - it’s probably just a rumor Contact the OIG Contact your agency representative B and C

Offers of gifts, bribes or other gratuities! – that is, where you, the employee, gets the offer – WHAT TO DO

Even the appearance of a conflict

5 April 2010 Practice Scenarios

3. You believe a product/deliverable your company is providing the government is NOT what is supposed to be provided.

Call the press Contact your Congressman Quit your job out of frustration Contact the OIG and your agency representative

Offers of gifts, bribes or other gratuities! – that is, where you, the employee, gets the offer – WHAT TO DO

Even the appearance of a conflict

5 April 2010 Practice Scenarios

4. You believe that your company is charging the government twice for the same cost item.

a) Gather information about the item Contact the OIG

All of the above

Offers of gifts, bribes or other gratuities! – that is, where you, the employee, gets the offer – WHAT TO DO

Even the appearance of a conflict

5 April 2010 Practice Scenarios

5. Your manager tells you “the government’s coming for a site visit, so we need to make it look like we’re doing what they want.”

a) Ignore it – that’s how it’s done Contact the OIG

Offers of gifts, bribes or other gratuities! – that is, where you, the employee, gets the offer – WHAT TO DO

Even the appearance of a conflict

5 April 2010 Practice Scenarios

6. You believe that false data was deliberately submitted to the government within a progress report.

a) Ignore it – it’s not your problem Contact the OIG

Offers of gifts, bribes or other gratuities! – that is, where you, the employee, gets the offer – WHAT TO DO

Even the appearance of a conflict

5 April 2010 Practice Scenarios

7. Your manager demotes you for inquiring about suspicious activity regarding your Recovery Act award.

a) Get another job Contact the OIG as a Whistleblower File a lawsuit Do nothing

Offers of gifts, bribes or other gratuities! – that is, where you, the employee, gets the offer – WHAT TO DO

Even the appearance of a conflict

5 April 2010 Practice Scenarios

8. You believe your company is co-mingling the work for projects from two separate federal agencies.

a) Ignore it Start a rumor within the company Contact the press Contact your agency representative and the OIG

Offers of gifts, bribes or other gratuities! – that is, where you, the employee, gets the offer – WHAT TO DO

Even the appearance of a conflict

5 April 2010 Practice Scenarios

9. You are asked to charge work hours to a Recovery Act project code which you did not work on.

a) Call your local police department Contact the OIG and your agency representative Write your congressman Do nothing

Offers of gifts, bribes or other gratuities! – that is, where you, the employee, gets the offer – WHAT TO DO

Even the appearance of a conflict

5 April 2010 Practice Scenarios

10. You believe your company is asking the government to pay for equipment which is not necessary for the project.

a) Gather information about the equipment Contact the OIG

A, B, and C

Offers of gifts, bribes or other gratuities! – that is, where you, the employee, gets the offer – WHAT TO DO

Even the appearance of a conflict

5 April 2010 We Need Your Help!

PROTECT YOUR TAX DOLLARS!

Americans are counting on you to be responsible with stimulus funding. We rely on your judgment, honesty and professionalism to keep us informed, so we may protect our programs!

Offers of gifts, bribes or other gratuities! – that is, where you, the employee, gets the offer – WHAT TO DO

Even the appearance of a conflict

5 April 2010 Fraud Awareness

ANYTHING that indicates waste, fraud or abuse

Please be on the lookout for…

Contact Information

OIG HOTLINE

Phone: (800) 424-5497 Fax: (202) 482-2803 Email: hotline@oig.doc.gov

U.S. Department of Commerce Office of Inspector General Office of Investigations Recovery Act Oversight Program

(202) 482-0934

For more information please visit our website www.oig.doc.gov

In this presentation, my goal was to:

make you aware of what the OIG does, what fraud looks like, and what you and I can do, individually and as a team, to combat fraud.

I want you to remember that with your help, we can help put billions of dollars to better use each year, and make sure the money is going to the people it was intended to go to.

QUESTIONS??

5 April 2010 Training Completion

Thank you for your participation.

You have completed the Fraud Prevention e-training.

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