DICIB Fraud Investigations

							DICIB Fraud Investigations




           Susan Marbach, Special Agent
     DFAS Internal Review, Criminal Investigation
                   Branch (DICIB)
                   317/212-4352
             Susan.Marbach@dfas.mil



                 Integrity - Service - Innovation
“It’s strange that men
should take up crime when
there are so many legal
ways to be dishonest.”
           Author Unknown




           Integrity - Service - Innovation
Who Said?


“Nothing matters but the facts.
  Without them the science of
criminal investigation is nothing
 more than a guessing game.”



            Integrity - Service - Innovation
                              Inspector Clouseau from the
                               movie “A Shot in the Dark.”




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DICIB

Overview

 Who Are We
 Investigative Focus
 Investigative Mission




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DICIB

Who are we?

 Stood up on February 5, 2007
 Small cadre of experienced investigators (special agents),
  currently 8 personnel
 Came from AFOSI, DoC-OIG, USACIDC, USSS, USPIS,
  and USDA-OIG
 Future growth will hopefully reach upwards of about 20
  personnel




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DICIB

Investigative Focus
 Violations of US Codes
            Federal Prosecution, Monetary Recoveries and
             Restitutions

 Violations of DoD, DFAS or Military Service
  Instructions, Regulations or Policies
            Administrative/Disciplinary Remedies




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DICIB



Investigative Focus

 Employee Cases and Hotlines
            Travel Fraud
            Time & Attendance Fraud
      Contract Fraud
      Systems Fraud
      Workers Comp Fraud
      Death Match Fraud


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DFAS INTERNAL REVIEW




 DICIB Mission Statement: To be the DFAS investigative
  source of choice, and to provide investigation services
  that are relevant, timely, effective and which add value to
  Internal Review’s overall mission.




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How do we start?




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            Referrals

IR Audit
Other investigative agencies
Public
Proactive initiatives




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                  Once we receive a referral

 Develop an Investigative Plan

            Provides a frame of reference

                   Do we have a crime?

                   Do we have jurisdiction?




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Investigative Plans

                                         Why are they so important?




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                    Investigative Plans

       Focuses the investigative process to ensure all
       offense elements are addressed.
       Limits unnecessary procedures and step duplication
       Provides stability to the investigation if staff changes
       occur
       Enhances communication with prosecuting officials
       by providing an outline of the investigation and
       identifying strengths and weaknesses in the case
       Provides framework for the final report
       Becomes a training aid for inexperienced staff
       members.



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Components of an Investigative Plan

                                      Predication

                                      Elements

                                      Preliminary Steps

                                      Investigative Steps




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                   Predication




 What particular offenses may have been committed.




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                                  Elements

 What is needed to establish a criminal violation.

            For Example 18 U.S.C – 1001 –

            Except as otherwise provided in this section, whoever, in any matter
             within the jurisdiction of the executive, legislative, or judicial branch of
             the Government of the United States, knowingly and willfully— (1)
             falsifies, conceals, or covers up by any trick, scheme, or device a
             material fact;
            (2) makes any materially false, fictitious, or fraudulent statement or
             representation; or
            (3) makes or uses any false writing or document knowing the same to
             contain any materially false, fictitious, or fraudulent statement or
             entry;


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                           Preliminary Steps

 Basic Background Information

            File review

            Review of public records

            Criminal background checks

            Etc




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           Investigative Steps
                                    FINALLY!!!!!!
                                       Whose going to be
                                        interviewed
                                       Records to obtain and
                                        examine
                                       Subpoenas
                                       Search Warrants
                                       Briefing prosecuting
                                        officials
                                       Briefing DFAS
                                        management (never
                                        ending!)
                                       Preparing a final report


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DICIB - Case Studies

Travel Fraud
 Former employee allegedly relocated from Dayton to Columbus
    Took a large advance for the move
    Didn’t actually move—joined a carpool from Dayton to
     Columbus (along with her mom)
    Submitted fraudulent travel vouchers for reimbursement
    Vouchers included bogus receipts for hotels and groceries

 Employee was interviewed and confessed to the theft
    Was convicted in state court, sentenced to three years
     supervised probation, ordered to pay restitution to DFAS of
     approx. $6700




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DICIB Case Studies

Worker’s Comp Fraud
 This is a true “gold mine” for many former Federal workers
    Office of Worker’s Compensation (OWCP) has the same
     motto as Nationwide Insurance; “Nationwide is on your side”
    OWCP accepts almost everything issue for compensation
    Benefits are tax free and almost always more than what one
     takes home if working everyday

 Recipients can choose to receive retirement annuity at 66%
  and taxed or worker’s comp benefits at 75% not taxed

            Here’s the “BIG” question: Which would you choose?




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DICIB Case Studies

Sec. 1920.: False statement or fraud to obtain Federal employees‘
compensation

STATUTE
 Whoever knowingly and willfully falsifies, conceals, or covers up a
  material fact, or makes a false, fictitious, or fraudulent statement or
  representation, or makes or uses a false statement or report knowing
  the same to contain any false, fictitious, or fraudulent statement or
  entry in connection with the application for or receipt of compensation
  or other benefit or payment under subchapter I or III of chapter 81 of
  title 5, shall be guilty of perjury, and on conviction thereof shall be
  punished by a fine under this title, or by imprisonment for not more
  than 5 years, or both; but if the amount of the benefits falsely obtained
  does not exceed $1,000, such person shall be punished by a fine
  under this title, or by imprisonment for not more than 1 year, or both.




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DICIB Case Studies

Worker’s Comp Fraud
 Former Employee – Sprain of Neck, Sprain of Lumbosacral (Joint)
  Ligament), Ankle Sprain

            Sustained September 1991 and re-injury 1994, 1996 and 1997
            First incident - a filing cabinet fell on her
            1996 injury - she heard a loud crashing noise, became startled,
             and jumped and jerked her body out of her chair
            1997 injury – while walking behind another employee who was
             answering the phone, the employee with phone suddenly turned,
             with telephone in hand, and hit Ms. X. Ms. X stated the other
             employee hit her in the head -- the other employee stated she hit
             her in the chest.




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DICIB Case Studies

Worker’s Comp Fraud

 Other accepted conditions accepted:
            Contusion of face, scalp, and neck (bruises)
            Migraine Unspecified
            Post-concussion syndrome
            Contusion of Back; Lumbago (backache)
            Contusion (bruise) of knee; Ankle sprain
            Other psychogenic pain; Reflex sympathetic dystrophy of the
             upper limb;
            Calcifying tendonitis of shoulder; Other tenosynovitis of hand and
             wrist




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DICIB Case Studies

Deceased Retiree/Annuitant Fraud
 DFAS pays retirement benefits to US military veterans
  and also to surviving spouses or others designated under
  the Survivors Benefit Program

 DFAS generally count on family member to report a
  retiree or annuitant’s death

 DFAS also uses a match with the Social Security Death
  Index to determine when retirees/annuitants have passed
  away

 DFAS also coordinates with the US Dept of Veterans
  Affairs to reconcile inconsistencies in suspected
  retiree/annuitant deaths
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Deceased Retiree/Annuitant Fraud
1. Mary Johnson (Deceased), an annuitant, died on 12/29/97. Her daughter, Debra
   Stiles, was also on her mother’s bank account and failed to report her mother’s death
   while continuing to collecting her mother’s annuity payments. Ms. Stiles was
   interviewed and confessed to taking the money. This investigation resulted in Ms.
   Stile’s prosecution in a Federal District court where she signed a guilty plea to one
   count of 18 USC 641 – Theft of Public Monies. Ms. Stiles was sentenced to 6 months
   home confinement, five years probation and order to pay DFAS restitution in the
   amount of $67,628.00.

2. Deceased (an annuitant) died on 10/25/2004; she and her husband are listed on the
   VA gravesite locator. Her son was granted power of attorney in May, 2001. DFAS
   issued the Deceased’s annuity payments via Electronic Funds Transfer and the
   account Deceased’s funds were going into changed several times. The total loss to
   DFAS is $36,822.25. On August 6, 2009, the Deceased’s son was arrested and is
   awaiting trial.




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DICIB Case Studies

Deceased Retiree/Annuitant Fraud
 Penelope Jordan, 61, kept the mummified remains of her mother who
  had been missing for as much as six years, in her home. Jordan kept
  the Deceased, Mrs. Timmie Jordan, on the bed in a back bedroom of
  the house. She covered her mother with lye to mask the smell and
  then covered the body with a blanket. She did all of this so she could
  continue cashing the Deceased’s Social Security and military pension
  checks, which she had been doing for the past six years.

 On September 21, 2009, Jordan was convicted in a U.S. Federal
  court on one charge of Theft of Public Money. She was sentenced to
  366 days in prison, ordered to pay $237, 876 in restitution ($170K to
  DFAS & $67.8K to SSA), and serve three years of supervised
  probation upon release.




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DICIB

How to reach us:

Warren Anderson – warren.anderson@dfas.mil
                  (614) 693-4805

Susan Marbach – susan.marbach@dfas.mil
                (317) 212-4352

Michael Vega – michael.vega@dfas.mil
              (614) 693-5202

Hotline@dfas.mil


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DICIB

           Criminal Investigations



            Questions




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