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VA Office of Inspector General Criminal Investigations Division

VA Office of Inspector General Criminal Investigations Division. Fraud Awareness Briefing. VA Office of Inspector General. Audit Division Healthcare Inspections Administrative Investigations Division Criminal Investigations Division.

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VA Office of Inspector General Criminal Investigations Division

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  1. VA Office of Inspector GeneralCriminal Investigations Division Fraud Awareness Briefing

  2. VA Office of Inspector General • Audit Division • Healthcare Inspections • Administrative Investigations Division • Criminal Investigations Division

  3. Investigate violations of federal law involving VA Programs and facilities. • Special Agents • arrest authority, carry firearms, execute search warrants, conduct undercover operations

  4. Subjects of Investigation • Veterans • VA beneficiaries • VA fiduciaries • VA employees • Healthcare • Benefits • VA contractors/vendors/grantees • Private citizens

  5. Cases we investigate • From complex contract fraud to homicide. • Prosecutable crimes that affect VA. • Federal Criminal/Civil Statutes • Washington State Penal Code • Local Regulations

  6. Define “FRAUD” Main Entry: fraudPronunciation: 'frodFunction: nounEtymology: Middle English fraude, from Middle French, from Latin fraud-, fraus1 a: DECEIT, TRICKERY; specifically: intentional perversion of truth in order to induce another to part with something of value or to surrender a legal right b: an act of deceiving or misrepresenting : TRICK2 a: a person who is not what he or she pretends to be : IMPOSTOR; also: one who defrauds : CHEATb: one that is not what it seems or is represented to be synonym see DECEPTION, IMPOSTURE

  7. Types of Crime • Frauds • VBA Frauds • VHA Frauds • General Crimes • primarily associated with VHA

  8. Types of Fraud Cases/VBA • Embezzlement • Theft of Benefits • False Statements • Equity Skimming/Loan Guarantee • Construction Fraud

  9. Types of Fraud Cases/VBA • Deceased Payee Cases • Credit Card Fraud • Fiduciary Fraud • Disability and Workers’ Compensation Fraud

  10. Types of Fraud Cases/VHA • Embezzlement • Theft of Benefits • Identity Theft • Theft of Government Property • Procurement Fraud

  11. General Crimes affecting VHA • Drug Diversion • For Profit • For Use • Theft of Property • Child Pornography • Patient Abuse • Homicide • patient by patient • patient by staff

  12. When you should call us. • Whenever you think something is wrong and there may be criminal conduct involved. • Call us early, when allegation first surfaces. • Many referrals don’t result in cases. • Encourage informal contacts.

  13. 38 CFR 1.201 Employee's duty to report. • 38 CFR 1.203 Information to be reported to VA Police. • 38 CFR 1.204 Information to be reported to the Office of Inspector General. Criminal matters involving felonies will also be immediately referred to the Office of Inspector General, Office of Investigations.

  14. VAOIG Hotline 1-800-488-8244 VA Inspector General Hotline P.O. Box 50410 Washington, DC 20091 vaoighotline@va.gov FAX: 202-565-7936

  15. North Western Field Office • Northern California • San Francisco • Fresno • Northern Nevada • Reno • Oregon • Washington State • Idaho • Montana • Special Agent in Charge • Michael Seitler • (510) 637-6360 Western Field Office Southern California • Los Angeles • San Diego • Bakersfield Arizona New Mexico Sothern Nevada • Las Vegas Utah Asst. Special Agent in Charge Lisa Mantione 310-268-4269

  16. Donald Pepin UNITED STATES ATTORNEY'S OFFICE Western District of Washington November 20, 2009 CAMANO ISLAND MAN INDICTED FOR SCHEME TO STEAL AND SELL DIABETIC SUPPLIES Former Pharmacy Employee Conspired with Florida Resident to Sell Stolen Insulin and Test Strips

  17. VA OIG Investigation Los Angeles VAMC Pharmacy Determined: • Incoming orders of test strips outpaced demand • Test strips had unique lot numbers • Unusually high warehouse activity by: ?

  18. VA OIG Investigation

  19. VA OIG Investigation

  20. VA OIG Investigation Above Suspicion Doctor of Pharmacy Supervisor Always volunteered for overtime Had private office Had all access - trusted

  21. VA OIG Investigation Suspicious Supervisor - Not scrutinized Always volunteered for overtime – why? Money problems? - opportunity Had private office - Out of sight Had all access – trusted • Had no job duties in the warehouse - History of crimes against the VA

  22. White-collar crime Within the field of criminology, white-collar crime has been defined by Edwin Sutherland as "a crime committed by a person of respectability and high social status in the course of his occupation" (1949).

  23. Think about it…Hmmm • Motive • Ability • Opportunity

  24. Opportunity Opportunity for fraud, bribery, insider trading, embezzlement, computer crime, identity theft, and forgery is more available to white-collar employees.

  25. Think about it…Hmmm Lost VA Job (Resigned in lieu of termination) Facing criminal prosecution for thefts from 2005 – 2010: • Conspiracy - 5 years / $250,000 fine. • Wire Fraud - 20 years / $250,000 fine. • Transportation of Stolen Property – 10 years / $250,000 • Receipt of Stolen Property - 10 years / $250,000 Estimated gross sales of $140,000 Fertility treatments

  26. Ounce of Prevention • Physical Security Controls • Need for access • Cop on the beat • Management Controls • Duty to report • Accountability • Inventory • Separation of duties • Mandatory Witness

  27. Take Away! • Call the VA OIG upon suspicion • M – O – A • Don’t circumvent the controls • Don’t tolerate thievery

  28. Thomas Oberhofer(310) 268 - 4788

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