Rob Bell Assistant Special Agent in Charge U.S. Department of Agriculture Office of Inspector General

Transcription

1 Rob Bell Assistant Special Agent in Charge U.S. Department of Agriculture Office of Inspector General

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3 72 statutory Offices of Inspectors General (OIGs) across the Federal Government Primary mission detect and deter fraud, waste and abuse Most OIGs are comprised of an Audit division and an Investigations division

4 OIG is separate from all other U.S. Department of Agriculture agencies Presidentially appointed IG reports directly to the Secretary and Congress Office of Investigations law enforcement arm of USDA Department wide jurisdiction

5 USDA OIG Special Agents are sworn federal law enforcement officers Authorized to make arrests, execute warrants, carry firearms Same basic training and authorities as other federal LEOs (USSS, FBI, NCIS, ATF, etc.) More external focus than other OIGs

6 Conduct a wide variety of investigations Any crime affecting USDA programs, agencies, or personnel (34 agencies and offices) SNAP/Food Stamp fraud CACFP, NSLP, SBP, SFSP fraud Crop insurance and indemnity fraud Farm program fraud Conservation program fraud Mortgage fraud Animal fighting IA for USDA employees

7 Federal cases prosecuted by the United States Attorney s Office Limited peace officer status in some states Florida PC arrests for violent felonies Swear out search warrants Work with SAO in multiple counties

8 Offices nationwide Divided into five regions, each headed by a Special Agent in Charge

9 FY indictments 919 arrests 347 searches 621 convictions $160,100,000 in monetary recoveries (fines, restitution, etc.)

10 FY 2016 Indictments FY 2016 Convictions Other Related to FNS Programs Other Related to FNS Programs

11 Federal program jointly administered by FNS and state social services agencies Benefits are 100% federally funded Program administrative costs shared by States and the Federal Government

12 Total annual program cost in 1969 $250 million Total annual program cost in 2015 $71 billion In July 2017, Florida issued $378,375,791 in benefits to 3,115,778 recipients 15% of Florida s population Nationally, $5 billion per month to 42 million people (13% of U.S. population)

13 Various entitlement benefits delivered via payment systems EBT Card SNAP TANF WIC Direct deposit to prepaid card/debit card SSI/SSDI Tax refund

14 Online applications Automated systems Correspondence via phone and Personal information stored in data systems

15 Anybody who is part of the benefit payment system or has access to participant information SNAP EBT Retailers and their employees Government employees (state and federal) Payment processors and their employees Authorization facilitators

16 Retailers submit applications to FNS to participate in the SNAP De facto agent of USG Retailer agreement requires strict compliance with program rules, oversight by owner

17 Fraud Schemes Exchange of cash, firearms, narcotics for benefits Purchase of store food inventory with benefits Fraudulent use of merchant account

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20 Position of trust Access to PII Program knowledge to include vulnerabilities Approval authority for issuance of benefits Fraud Schemes Identity Theft Misappropriation of benefits Bribery

21 Feb 2014 Connecticut Department of Social Services employee Reinaldo Ruiz arrested for fraudulently using identities of five recipients to obtain $4,901 in benefits

22 April 2010 Michigan Health Department employee Jacqueline Taylor indicted for selling more than $400,000 in WIC benefits to ineligible recipients

23 Jan 2016 Seven Delaware Department of Health and Social Services employees indicted for conspiracy to issue $959,000 in SNAP benefits to fictitious assistance cases

24 Based on internal audits conducted by DHSS investigators learned of fictitious and unauthorized EBT accounts created by Division of Social Services case workers responsible for case creation and maintenance, with each of the fraudulently created cases issued varying amounts of food benefits in the form of EBT cards. The investigation revealed that the fraudulent EBT cards were delivered to State Service Centers in New Castle and Kent County, and intercepted by the suspects working at those locations. Once intercepted, the cards were personally used or sold at a discount.

25 Dec 2015 Two Florida Department of Children and Families employees sentenced to federal prison for accepting bribes

26 Irma Davidian Former prosecutor from the Republic of Georgia Acted as a facilitator for Russian immigrants seeking to obtain entitlement benefits Charged applicants $2,000 to $5,000 for her assistance Gladys Roman DCF Interview Clerk Used her program knowledge to tailor eligibility information for Davidian s clients

27 George Lopez DCF Economic Self Sufficiency Specialist Used his position to approve applications for Davidian s clients Roman and Lopez each received approximately $14,000 in payments from Davidian. Davidian made millions from the scheme.

28 Roman sentenced to 40 months of imprisonment followed by three years of supervised release and restitution of $2.8 million Lopez sentenced to 54 months of imprisonment followed by three years of supervised release and restitution of $300,673 Davidian at sentencing You have to give something to get something

29 Responsible for ensuring integrity of payment systems Access to sensitive retailer information Control distribution of payments Elimination of FNS POS terminal subsidy dozens of TPPs entered the market Fraud Schemes Business Identity Theft Embezzlement

30 Feb 2017 Century Payments employee Fowzi Naji Tareb convicted of wire fraud for facilitating $6 million in fraudulent SNAP payments

31 Tareb used his position as a Century Payments agent assist more than 25 permanently disqualified or otherwise unauthorized retailers with transacting SNAP benefits Most of the underlying transactions were fraudulent (e.g. exchanges of cash for benefits) Tareb was sentenced to 21 months of imprisonment followed by three years of supervised release and restitution of $1.5 million

32 Present the appearance of acting on behalf of a community of retailers Take advantage of prospective retailers who are not fluent in English or proficient at interpreting application requirements Typically request power of attorney Fraud schemes Vertical integration of fraud

33 7 USC 2024(b) (SNAP Fraud) Unauthorized use, transfer, acquisition, alteration or possession of benefits; 5 year felony 18 USC 371 (Conspiracy to Defraud the U.S.) Two or more persons conspire to defraud the U.S. or any agency thereof in any manner or for any purpose, and one or more of such persons do any act to effect the object of the conspiracy; 5 year felony

34 18 USC 641 (Theft of Public Funds) Whoever embezzles, steals, purloins, or knowingly converts to his use or the use of another, or without authority, sells, conveys or disposes of any thing of value of the U.S.; 5 year felony

35 18 USC 666 (Theft or Bribery Concerning Federally Funded Programs) 1. An agent of an organization, or State, local or tribal government 2. Which receives in any one year period more than $10,000 in federal program funds 3. Embezzles, steals, obtains by fraud, converts to the use of another property valued at $5,000 or more which is under the care, custody or control of the organization or government entity, or 4. Corruptly solicits or demands anything of value in exchange for facilitating a transaction of $5,000 or more by the organization or government entity 5. Corruptly gives, offers or agrees to give anything of value to any person with intent to influence or reward an agent of an organization or government entity to conduct a transaction of $5,000 or more 10 year felony

36 18 USC 1343 (Wire Fraud) Transmitting a communication via wire in interstate commerce in furtherance of a scheme to defraud; 20 year felony (30 if a financial institution is affected)

37 Greed Financial problems Substance abuse Dissatisfaction / disenchantment Incremental compromise Activism

38 Increasing complexity of schemes Adaptability to system integrity measures Evolution predicated on investigative successes Exploitation of vulnerabilities The information age has produced employees with greater capabilities, spans of control and access to data

39 Who is responsible for dealing with insider threats? All of us Government Agencies Public trust Delivery of critical social services Payment Processors You are selling integrity Processors can be victims

40 Increased communication between stakeholders FNS OIG State Agencies Payment processors We do this better than most in FL FIS Fraud Investigations Liaison with processors (First Data, Conduent, IAFCI) Coordination with FL DCF and FNS Merchant Acquirers Committee Not the case everywhere

41 Suspicious activity reporting Subpoena compliance State processor contracts with provisions directly supporting benefits integrity Program managers should solicit input from division(s) responsible for fraud investigations and integrity (even OIG) Self regulation now vs. legislative action later

42 ASAC Rob Bell USDA OIG, Gainesville, FL (352)