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FAA DBE Workshop . DBE Program Fraud U.S. Department of Transportation Office of Inspector General. Overview. Mission and Priorities Fraud Discovery, Schemes, and Indicators Detection and Deterrence of DBE Fraud. OIG Criminal Investigative Regions. Alaska. Maine. Vermont. North Dakota.

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faa dbe workshop

FAA DBE Workshop

DBE Program Fraud

U.S. Department of Transportation

Office of Inspector General

overview
Overview
  • Mission and Priorities
  • Fraud Discovery, Schemes, and Indicators
  • Detection and Deterrence of DBE Fraud
slide3

OIG Criminal Investigative Regions

Alaska

Maine

Vermont

North Dakota

Minnesota

1

Washington

Montana

NH

Mass

2

SouthDakota

Wisconsin

5

Rhode Island

Oregon

Idaho

New York

Connecticut

9

Wyoming

Michigan

Nebraska

Iowa

Pennsylvania

New Jersey

Ohio

Indiana

Illinois

Nevada

Utah

Kansas

Maryland

Delaware

Colorado

Missouri

3

West

Virginia

Kentucky

Virginia

California

Oklahoma

Arkansas

Arizona

New Mexico

Tennessee

6

4

North Carolina

Washington, DC

Hawaii

South

Carolina

Mississippi

Texas

Alabama

Georgia

Louisiana

OIG Regional Office

Florida

(Includes Puerto Rico,

Virgin Islands)

why employees do not report fraud
Why Employees Do Not Report Fraud
  • According to a 2005 Business Ethics Study, employees do not report fraud because they:
    • Believe nothing will happen.
    • Don’t know who to contact.
    • Think the report will not be kept confidential, so supervisors or co-workers might retaliate.
    • Believe the situation has no personal impact on them.
difficulties in prosecuting dbe fraud cases
Difficulties in Prosecuting DBE Fraud Cases
  • Project completed to owner’s satisfaction
  • Unpopular program → unsympathetic jury
  • Government loss is amount paid to DBE front → below threshold for prosecution
  • Government prosecutor does not understand DBE program
red flag indicators
“Red Flag” Indicators
  • Owner lacks background, expertise, or equipment to perform subcontract work
  • Employees shuttle back and forth between prime contractor and minority-owned business payrolls
  • Business names on equipment and vehicles are covered with paint or magnetic signs
  • Orders and payment for necessary supplies are made by individuals not employed by minority-owned business
minority owned business red flag indicators
Minority-Owned Business “Red Flag” Indicators
  • Prime contractor facilitated purchase of minority-owned business
  • Minority-owned business owner never present at job site
  • Prime contractor always uses the same minority-owned business
dbe fraud schemes
DBE Fraud Schemes

False Eligibility

  • The DBE does not belong to one of the recognized socially or economically disadvantaged groups
  • The DBE provides false information concerning size or financial status
  • Hidden assets or false statements concerning origination of capital
dbe fraud schemes10
DBE Fraud Schemes

Conduit Companies

  • DBE firm does not complete any of the contracted work
  • The DBE sells his status to another company who completes the work
  • Usually allows the use of the DBE name on invoices, trucks, equipment
simple recipe for fraud detection
Simple Recipe for Fraud Detection
  • Identify selected big ticket items on big-dollar DOT projects.
  • Closely examine supporting documentation for irregularities and discrepancies.
  • Interview third parties concerning project details. Ask simple questions to detect fraud. Distribute fraud cards.
dot oig hotline
DOT/OIG Hotline

P.O.Box 23178

Washington, DC 20026-0178

questions
Questions?

OIG’s web site:

www.oig.dot.gov

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