U.S. DOC Inspector G

Offi f I ti ti Office

of Investig

ati
Department of Comm

OIG I ti ti OIG Investig

ation

Welcome

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

As part of our Recovery Act Oversight Program, we ask that participate in our Fraud Prevention e-training by reviewing th

following slides following slides.

Thank you for your participation.

2 November 2009 
Department of Comm

OIG I ti ti OIG Investig

ation

Who We Are

• We are a federal law enforcement branch within the DO

We are

a federal law enforcement branch within the DO

Office of Inspector General, primarily staffed with: 

– Special Agents / Criminal Investigators– Com

puter Crimes Unit 

• Our investigative authority includes pursuing allegation

– Criminal violations– Civil fraud violations– Administrative violations

2 November 2009 
Department of Comm

OIG I ti ti OIG Investig

ation

Investigative Jurisdiction

Our investigative jurisdiction includes monitoring all of funding (i.e. contracts & grants), programs, and employDOC Headquarters and each of the DOC bureaus:

2 November 2009 
What We Investig

 Grant frauds Contract frauds Antitrust violations Antitrust violations Embezzlements  Property thefts  Conflicts of Interest Conflicts of Interest Bribery, kickbacks False claims & invoices False statements & certifi

False statements

& certifi

 Bank fraud Money laundering DOC credit card abuse

2 November 2009 

DOC credit card abuse

 Identity theft scams
OIG Recovery Act Au

OIG Recovery Act Authority

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

• Examine all contractor, subcontractor, state or local re

related to Recovery Act funding transactions

• Initiate investigations and work in connection with OIG • Interview employees

2 November 2009 
Recovery Act O i ht P Oversight Progra

U.S. DOC/OIG Investigations

“Recovery Act Oversight Program”

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

9 Monitoring all DOC Recovery Act awards9 Providing fraud awareness training to DOC staff working 

Recovery Act awards Recovery Act awards.

9 Providing fraud prevention training to contractor and gra

recipients working with DOC Recovery Act awards.

2 November 2009 
Recovery Act O i ht P Oversight Progra

Our Program Mission

To work with DOC bureaus and fund

recipients to ensure that DOC Recoverrecipients to ensure that DOC Recover

awards are monitored and effective

protected from waste, fraud and abu

2 November 2009 
Fraud Preventio

T ii ra

i

n

i

n

g

Fraud Prevention Training Goals

9 Provide fraud prevention training to funding recipients. 9 Encourage open communication with agency representatives9 Promote honesty, efficiency and fraud awareness efforts.9 Deter instances of waste, fraud and abuse with DOC Recove

Deter instances of waste, fraud and abuse with DOC Recove

awards.

2 November 2009 
What is Contract a

G t F d? Grant Fraud?

Contract / Grant Fraud

“An act of deceit, trickery or deliberate neglect, commit

federal funding recipient against the funding agency for purpose of gaining something of value.”

One or more of the following acts has usually occurred

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

2 November 2009 
What is Contract a

G t F d? Grant Fraud?

Contract / Grant Fraud

9 May be hidden, discreet or completely overt9 May involve a large OR small portion of a contract o9 May involve a conspiracy between subcontractors a

government officials

9 May be a one-time incident or ongoing matter

2 November 2009 
Relevant Criminal 

Ci il St t t Ci

vil St

a

t

u

tes

18 U.S.C. 666 “Theft or bribery concerning progra

receiving federal funds”

18 U.S.C. 641 18 U.S.C. 641

“Embezzlement of Public Money, P

Embezzlement of Public Money, P

or Records”

18 U.S.C. 1001 “False statements”

18 U.S.C. 287 “False, fictitious or fraudulent claim18 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

”

2 November 2009 

31

U.S.C. 3729 Civil False Claims Act
Investigation Exam

GRANT FRAUD

• A NIST Advanced Technology 

P i i t i t df Program recipien

t was convic

t

e

d

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 

la ndering after con erting nearl

2 November 2009 

la

undering after con

verting nearly 

$800,000 to their personal use.
Investigation Exam

CONTRACT FRAU

• The CEO of a corporate en

government contract was cgovernment contract was c

false claims for submitting under a “Buy America” progcertifying U.S. origin of prosupp , p lied, when in fact the 

p

originated in China.

• The CEO of a company pa

a government funded proga government funded progconvicted of wire fraud for sfalse bids from non-existenthe purpose of which was tand fake a competitive proc

2 November 2009 

and fake

a competitive proc
Keeping it Safe

Please consider our

“Tips for Keeping it Safe”

...

2 November 2009 
Keeping it Safe

Tips for Keeping it Safe

• Follow government rules, 

regulations and guidelines 

• Promote efficiency, 

and professionalism

• Act in good faith • Ask questions - do not 

• Maintain fraud preve

refresher training

assume the answers

• Report accurate information

• Provide employees w

copy of contracting rregulations

2 November 2009 
Keeping it Safe

Tips for Keeping it Safe

• Avoid “grey areas” or risky situations with 

subcontractors

• Stay organized • Report any problem

and with full disclosu

• Require full disclosure from employees and subcontractors 

and with full disclosu

• Communicate openl

often with 

your a

gen

• Reward employees for identifying project weaknesses, waste, fraud 

and abuse

y g

representative

2 November 2009 

and abuse
FRAUD PREVENT

Please be aware of the following 

Red Flags a.k.a.

“THINGS “THINGS NOT TO DO”...

2 November 2009 
FRAUD PREVENT

PRE-AWARD

THINGS NOT TO DO

• Bid rigging – bidding 

arrangements are NEVER 

permitted

• Defective & inflated 

Salaries

• Price fixing and/or pricing 

ag

ree

m

e

nts

– Salaries– Consultants – Equipment

Gd d i ag ee e ts

• Scams and fraudulent 

agreements with 

s bcontractors

–

Goo

ds an

d servi

2 November 2009 

s

ubcontractors
FRAUD PREVENT

PRE-AWARD

THINGS NOT TO DO

• Offer bribes, gifts or gratuities to government officials

• Embellishment - unr

performance goals a

pro

posed 

promises 

• Give false or misleading proposal information

pp p

• Double dip – compe

work identical to ano

award you already r

• Withhold information which 

is required on proposals

award you already r

from another federa

2 November 2009 
FRAUD PREVENT

POST-AWARD

THINGS NOT TO DO

• Double billing• Inflated billing

• Deliberate product o

• Inflated billing

• Product substitution

• Poor accounting system

• Product substitution• Shifting costs often f

cate

gor

y or cost acc

• Deliberate “accounting error”

g y another without app

2 November 2009 
FRAUD PREVENT

POST-AWARD

THINGS NOT TO DO

• Embezzlement of project 

funds or equipment

• Unauthorized travel 

• Conflicts of interest

• Misappropriation of project 

funds or equipment

Conflicts of interest

• Less than arms leng

transactions

• Deliberate waste of project 

funds, equipment and resources

• Use of fictitious vend

2 November 2009 
FRAUD PREVENT

POST-AWARD

THINGS NOT TO DO

• Give unauthorized 

personnel access

• Maintain “Ghost” em

• Maintain under-qualified 

personnel

• Conduct unauthorize

changes to personn

Miti i d t 

• Falsify time & attendance 

records

•

M

ain

t

ain ina

dequa

te 

controls (i.e. one pehandling everything)

2 November 2009 
FRAUD PREVENT

POST-AWARD

THINGS NOT TO DO

• Co-mingle projects 

Inappropriate use of cash

• Mislead government 

contracting/program 

• Inappropriate use of cash• Alter or destroy documents

• Mislead auditors/ins

• Mislead your employ

Mislead your employ

2 November 2009 
FRAUD PREVENT

POST-AWARD

THINGS NOT TO DO

• Claim ignorance of rules

• Interpret rules to you

or satisfaction

• Attempt to convince agency representatives to change or ignore the rules

• Neglect or circumve

“Buy American” provunless authorized in 

2 November 2009 
The Golden Rule

“The Golden Rule of Fraud Prevention”

WHEN IN DOUBT....DON’T DO I

Call your agency representative for Call your agency representative for

appropriate guidance.

2 November 2009 
Whistleblower Prote

Did 

you know.....

Every person working on Stimulus funded p

has Whistleblower protection? has Whistleblower protection?

2 November 2009 
Whistleblower Prote

Whistleblower Protection – Recovery Ac

The Recover

y p pp Act 

provides ex

plicit 

protections for non

-federa

whistleblowers. These protections apply to all contractor and staff working on Recovery Act awards. The Act prohibits fundrecipients from discharging, demoting or discriminating againsemployee for disclosing any concern to their supervisor, the hf / OG f federal agency or his

/her representatives, or the 

OIG informat

employee believes is evidence of:

9 Gross mismana

g g ement or waste of 

grant or contract funds. 

9 Danger to public health or safety related to the use of funds.9 Abuse of authority related to the implementation or use of fu9 Violation of law, rule or regulation related to an agency contr

awarded or issued related to funds

2 November 2009 

awarded or issued related to funds.
Whistleblower Prote

Whistleblower Protection - OIG Responsibi

• Investigate all Whistleblower complaints related to Recovery f

are not frivolous or being addressed by another official procee

• Report of our findings to the complainant, complainant’s empl

of DOC and the Recovery Accountability and Transparency B180 days (extensions may be applied for).

• Provide a written explanation to complainants and their emplo

decline to pursue a Whistleblower allegation.

2 November 2009 
Whistleblower Prote

Whistleblower Protection - OIG Responsibi

• Uphold the Privacy Act – by NOT disclosing information about 

complainants.

• Provide information in our semi-annual reports to congress to 

– Investigations we declined to pursue and – Investigations requiring a time extension

2 November 2009 
Practice Scenario

1. You discover that a co-worker submitted fa

information on invoices and receipts to yoinformation on invoices and receipts to yo

government agency.

a) Contact the OIG and your agency Contact the OIG and your agency

representative

b) Confront the employee Confront the employeec) Do nothingd)

A

2 November 2009 
Practice Scenario

2. A subcontractor employee tells you he 

believes a scam may be going on between believes

a scam may be going on between

upper management at your company and subcontractor’s company.

a) Ignore it - it’s probably just a rumorb) Contact the OIG Contact the OIGc) Contact your agency representatived) B and C

2 November 2009 

B and

C
Practice Scenario

3. You believe a product/deliverable your 

company is providing the government is Ncompany is providing the government is N

what is supposed to be provided.

a) Call the press Call the pressb) Contact your Congressmanc

) Q it j b t f f t ti Q

uit your jo

b ou

t o

f

frus

tration

d) Contact the OIG and your agency 

representative

2 November 2009 
Practice Scenario

4. You believe that your company is charging 

the government twice for the same cost itethe government twice for the same cost ite

a) Contact the OIG

b) Contact your agency representativec) All of the above

2 November 2009 
Practice Scenario

5. Your manager tells you “the government’s 

coming for a site visit so we need to make coming for

a site visit, so we need to make 

look like we’re doing what they want.”

a) Ignore it Ignore it

– that s’ how it s’ done

b) Contact the OIGc

) C t t t ti Con

tac

t your agency represen

t

ative

d) B and C

2 November 2009 
Practice Scenario

6. You believe that false data was deliberate

submitted to the government within a submitted to the government within

a

progress report.

a) Ignore it Ignore it

– it s’ not your problem not your problem

b) Contact the OIGc

) C t t t ti Con

tac

t your agency represen

t

ative

d) B and C

2 November 2009 
Practice Scenario

7. Your manager demotes you for inquiring 

about suspicious activity regarding your about suspicious activity regarding your

Recovery Act award.

a) Get another job Get another jobb) Contact the OIG as a Whistleblowec

) Fil l it File a lawsuit

d) Do nothing

2 November 2009 
Practice Scenario

8. You believe your company is co-mingling 

work for projects from two separate federawork for projects from two separate federa

agencies.

a) Ignore it Ignore itb) Start a rumor within the companyc

) C t t th Con

tac

t the press

d) Contact your agency representative 

and the OIG

2 November 2009 

and the OIG
Practice Scenario

9. You are asked to charge work hours to a 

Recovery Act project code which you did nRecovery Act project code which you did n

work on.

a) Call your local police department Call your local police departmentb) Contact the OIG and your agency 

representative

c) Write your congressmand) Do nothing

2 November 2009 

Do nothing
Practice Scenario

10. You believe your company is asking the 

government to pay for equipment which is government to pay for equipment which is 

necessary for the project.

a) Contact your agency representative Contact your agency representativeb) Contact the OIGc

) C t t th FBI Con

tac

t the FBI

d) A & B

2 November 2009 
We Need Your He

PROTECT YOUR 

TAX DOLLARS! TAX DOLLARS!

Americans are counting on you to b ibl i h be responsible wit

h

stimulus funding. We rely on your judgment, honesty and 

professionalism to keep us professionalism to keep us

informed, so we may protect our programs!

2 November 2009 
Fraud Awarenes

Please be on the lookout for...

ANYTHING that indicates 

waste fraud or abuse waste, fraud or abuse

2 November 2009 
Contact Informatio

OIG HOTLINE

Phone: (800) 424 Phone: (800) 424

-5497

Fax: (202) 482-2803

Email: hotline@oig.doc.gov

U.S. Department of Commerce

Office of Inspector General For more infor

Office of Investigations

Recovery Act Oversight Program

(202) 482

-0934

please visit our 

www.oig.do

2 November 2009 

(202) 482 0934
Training Complet

Thank you for your participation. 

You have completed the 

Fraud Prevention e-training. 

2 November 2009