Despite signing certifications stating that they will only use their transit benefits to cover actual out-of-pocket commuting costs, federal employees in the National Capital Region are committing fraud or violating the False Statements Act by requesting benefits they do not need and then selling or using these benefits for personal gain. Specifically, we developed case studies on individuals employed at Commerce, Transportation, State, Homeland Security, Defense, Treasury, IRS, Patent and Trademark, and the Coast Guard. These case studies illustrate how federal employees fraudulently sold Metrocheks on eBay and Craigslist. Our case studies also illustrate how federal employees requested benefits in excess of their actual commuting costs, based on a comparison of their home and work addresses. In addition, during the course of our investigative work, we found evidence indicating that a number of individuals are in possession of federal transit benefits even though these individuals do not appear to work for the federal government. Employees at all of the agencies at which we conducted our investigative work are required to sign a certification statement as part of the transit benefit application process. As shown in figure 2, this certification typically confirms that the employee is eligible for benefits, will not sell or transfer the benefits, and is not requesting more than the needed amount of benefits. Some certifications also require employees to confirm that they do not have federally subsidized parking permits. In addition, the applications contain a false statement warning to inform employees that any false, fictitious, or fraudulent statements on their signed applications and may subject them to criminal prosecution. If requesting SmartBenefits, employees must provide the serial number of their WMATA-issued SmarTrip card so that their benefits can be directly deposited to the card. If employees receive paper Metrocheks, they are required to sign another document when they pick up the Metrocheks. This form reiterates that the employee will not sell or transfer the Metrocheks and will not claim excess benefits. In addition, as shown in figure 1, Metrocheks are labeled with a warning indicating that they may only be issued to “qualified” employees and that resale is illegal. SmarTrip Cards feature a similar warning. We identified 58 individuals selling Metrocheks on eBay on July 24, August 7, and August 23, 2006, and confirmed that at least 20 of these individuals were in fact federal employees. Collectively, these 20 employees fraudulently sold more than $21,000 worth of Metrocheks over the last 2 years and could be subject to prosecution for unlawful conversion under 18 U.S.C. §641. In addition, because the employees we investigated signed certifications stating that they will only use their transit benefits to cover actual out-of-pocket commuting costs, they could be subject to criminal prosecution under the False Statements Act, 18 U.S.C §1001. In subsequent interviews with 13 of the 20 eBay sellers, we found instances where federal employees received parking benefits in addition to Metrocheks, were on extended leave from work, or did not even use public transportation to commute to work. In addition, none of the individuals we interviewed reported the income generated from the illegal sale of Metrocheks on their tax returns and they would be required to report these sales as part of their gross income. Table 1 highlights the information we obtained on 8 of these individuals through eBay, PayPal (an Internet payment service), and our interviews. More detailed information on 4 of the cases follows the table. For a list of all 20 federal employees selling Metrocheks on eBay, see appendix II. Case 1: Seller has been employed as a GS-14 specialist at Transportation’s Federal Motor Carrier Safety Administration since 1990. Seller has received the maximum amount of transit benefits since he first entered the transit benefit program in November 2004. Seller explained that he accumulated excess benefits over time by using other means of transportation to and from work, including “slugging,” riding with a neighbor, and driving his motorcycle. Seller readily admitted to selling his transit benefits on eBay on multiple occasions for personal gain (12 lots of Metrocheks valued at a total of $1,080), but stated that he did not know it was illegal to sell his transit benefits—despite the warning printed on every Metrochek and the certification statement he signed on his application and each time he picked up his benefits. Case 3: Seller is a GS-14 information technology specialist and has been employed by IRS since 2003. Seller has received the maximum amount of transit benefits since he first entered the transit benefit program in February 2004. Seller also receives parking benefits from IRS and accumulated excess benefits over time by driving to work and parking in an agency-owned parking space for free. Seller admitted to selling his transit benefits on eBay for personal gain on multiple occasions (three lots of Metrocheks valued at a total of $930). Seller’s eBay account history also reflected the sale of computers, and after some questioning by investigators, seller confessed that he had stolen numerous computers and computer parts from IRS, which he subsequently sold on eBay. We referred the case to the Treasury Inspector General for Tax Administration. The employee has since been placed on administrative leave indefinitely and without pay and was indicted for theft of government property on February 7, 2007. Case 5: Seller is a GS-14 attorney for the Federal Highway Administration and has been employed at Transportation since 1990. Seller confirmed that she has received the maximum benefit since first entering the program in 1999. She explained that she accumulated excess benefits in two ways: (1) she continued to claim transit benefits while on maternity leave and (2) she works from home at least 1 day a week. Although she has recently been working from home more frequently, she still claims the maximum benefit. Seller admitted to selling her transit benefits on eBay on multiple occasions (six lots of Metrocheks valued at a total of $789), but stated that she did not know it was illegal to sell her transit benefits—despite the warning printed on every Metrochek and the certification statement she signed on her application and each time she picked up her benefits. Cases 7 and 8: These sellers are a married couple both working for Defense. The wife, an administrative leading petty officer, has been receiving almost $100 per month since first entering the program in September 2005. The husband, a financial technician, has been receiving the maximum benefit since first entering the program in March 2003. Both sellers acknowledged that they accumulated excess benefits over time by driving to work. The husband admitted to selling his transit benefits on eBay on multiple occasions (61 lots of Metrocheks valued at a total of $6,000). The wife, although she admitted she used her transit benefit for personal travel, denied selling her benefits on eBay. However, the names of both spouses appear on the eBay account selling Metrocheks. Posing as buyers, our investigators purchased $840 worth of benefits from three federal employees fraudulently selling their Metrocheks via Craigslist, a popular community Web site. First, investigators purchased $210 worth of Metrocheks for $160 from a GS-12 State Department employee who posted on the site. The seller also asked to be paid with cash because she wanted to buy Christmas presents for her friends. After purchasing the Metrocheks, investigators identified themselves as a federal agents conducting investigation and reminded the seller that she had signed certifications stating that she would not sell transit benefits. The seller insisted that she did not know it was illegal to sell benefits and also stated that she was selling extra Metrocheks left over from a previous government job. However, in e-mail correspondence prior to the sale, the seller told one of our investigators that she would be able to sell him benefits on a continuing basis, four times per year. We confirmed that she receives $255 in Metrocheks four times a year from the State Department. Investigators next purchased Metrocheks from an Air Force captain who advertised on the site. The captain corresponded with our investigator using his military e-mail address, as shown in figure 3. When our investigator arrived at the meeting spot, he told the captain that he only had $350 and asked if that would be enough to purchase the entire $450 worth of Metrocheks. The captain said no, and told our investigator that his wife had gotten angry at him for accepting less than the agreed- upon fee the last time he sold his transit benefits. Ultimately, our investigator purchased $420 worth of benefits for $350. After the exchange, the captain explained that he usually “slugs” to work and therefore does not use his transit benefits. He also offered to enter into an ongoing partnership with our investigator to sell his benefits on a quarterly basis. Our investigator did not identify himself as a federal agent because the Air Force Office of Special Investigations indicated that it would like to continue to develop a case against this seller. Finally, our investigator purchased $210 worth of Metrocheks for $190 from a former GS-11 international trade specialist with Commerce. This employee resigned from Commerce on and then arranged to sell her benefits to our investigator one week later. After our investigator purchased the Metrocheks, the seller explained that she was moving overseas and would no longer be collecting benefits. She also explained that she had typically walked to work at Commerce, so she did not really need the benefits in the first place. Our investigator did not identify himself as a federal agent because the IG at Commerce wanted to pursue further action against this seller by withholding her final paycheck. Further investigation at the agencies where the eBay and Craigslist sellers worked also demonstrated that federal employees are not using their transit benefits to cover actual out-of-pocket commuting costs. Through data mining of information submitted on transit benefit applications, we found many employees who appeared to provide inaccurate and inflated commuting cost information on their transit benefit applications. We developed case studies on 23 of these individuals.