DoD OIG Newsletter - September 2020



The DoD OIG newsletter summarizes the reports and investigations released by the Department of Defense Office of Inspector General in the previous month and those we anticipate releasing in the coming month. I encourage you to read these reports and to access our website, which lists reports and investigations by year, subject, and DoD component. You'll also find our project announcements and additional news releases highlighting investigations conducted by the Defense Criminal Investigative Service. Thank you for subscribing to our newsletter.



Significant reports expected to be issued within the next 30 days include:

Audit of the Solicitation, Award, and Administration of Washington Headquarters Services Contract and Task Orders for the Office of Small Business Programs
This audit determines whether the Washington Headquarters Services Acquisition Directorate solicited, awarded, and administered task orders issued under a program development and support contract for the Office of Small Business Programs in accordance with the Federal Acquisition Regulation, the Defense Federal Acquisition Regulation Supplement, and Washington Headquarters Services policies.

Audit of the Excess DoD Property Issued Through the Law Enforcement Support Office Program
This audit determines whether the DoD provided excess personal property to law enforcement agencies in accordance with the Law Enforcement Support Office Program.

Special Report: Defense Health Agency Controls Over Coronavirus Disease-2019 Related TRICARE Claims
This audit determines whether the Defense Health Agency effectively controlled costs for health care claims related to the coronavirus disease-2019 pandemic.

Audit of the Supply Chain Risk Management for the Navy’s Nuclear Delivery System
This audit determines whether the Navy implemented supply chain risk management for the sea-based Trident II Strategic Weapons System in accordance with DoD requirements. The Trident II Strategic Weapon System is the United States' primary sea-based nuclear ballistic missile, deployed aboard the Ohio-class ballistic missile submarine.  This report is classified. 

Audit of the F-35 Program Office’s Beyond Economical Repair Process for Parts
This audit determines the extent that the F-35 Program Office’s Beyond Economical Repair process identified parts that were damaged, whether a part could be economically repaired, and whether a DoD official approved the contractor’s determination that a part could not be economically repaired.

Audit of Screening and Quarantine Procedures for Personnel Entering Al Udeid Air Base, Qatar
This audit determines whether the Air Force has implemented screening and quarantine procedures for personnel entering Al Udeid Air Base in accordance with applicable criteria in response to the coronavirus disease–2019 pandemic.

Evaluation of the Air Force’s Certification of Space Launch Vehicles
This evaluation determines whether Air Force Space and Missile Systems Center officials complied with the Air Force Launch Services New Entrant Certification Guide when certifying launch system designs for the National Security Space Launch-class (formerly known as the Evolved Expendable Launch Vehicle-class) SpaceX Falcon family of launch vehicles.  

Evaluation of the Department of Defense and Department of Defense Education Activity Responses to Incidents of Serious Juvenile-on-Juvenile Misconduct on Military Installations
This evaluation determines whether the DoD and DoD Education Activity have adequate policies and procedures to respond to incidents of serious juvenile-on-juvenile misconduct, including sexual assault and sexual harassment.  The evaluation also determines whether DoD Education Activity administrators referred serious juvenile-on-juvenile misconduct incidents to DoD law enforcement organizations and military and civilian child advocacy and health services.

Evaluation of the U.S. Combatant Commands’ Responses to the Coronavirus Disease–2019
This evaluation determines how Geographic Combatant Commands (excluding U.S. Northern Command) and their component commands, executed pandemic response plans.  The evaluation also seeks to identify the challenges with implementing the response plans and the impact to operations as a result of the coronavirus disease–2019 pandemic. 

Recently issued Reports of Interest (to view report, if available, please click on title)

Evaluation of Mental Health Access to Care in the Department of Defense
This evaluation determined that the DoD did not consistently meet outpatient mental health access to care standards for active duty service members and their families, in accordance with law and applicable DoD policies.  In addition, 7 of 13 military treatment facilities (direct care system) or their supporting TRICARE (purchase care system) network did not meet the specialty mental health access to care standard each month.  Moreover, an average of 53 percent (4,415 of 8,328 per month) of all active duty service members and their families, identified as needing mental health care and referred to the purchased care system, did not receive care and the Military Health System did not know why.  As a result, thousands of active duty service members and their families may have experienced delays in obtaining mental health care, which could increase the risk of jeopardizing patient safety and affect the readiness of the force.

Audit of Management of Pharmaceutical Inventories in Support of the U.S. Central Command Area of Responsibility
This audit determined that the Military Departments did not fully account for or safeguard pharmaceuticals at seven medical treatment facilities (MTFs), four MTF medical logistics facilities, one Army Medical Materiel Center-Southwest Asia (USAMMC-SWA) warehouse, and two USAMMC-SWA Forward Logistics Elements in the U.S. Central Command area of responsibility.  Specifically, the audit found improper accounting and a lack of inventories for controlled pharmaceuticals; could not verify that controlled pharmaceuticals were provided only to authorized personnel; and identified that pharmaceuticals were not properly safeguarded.  Without properly conducting inventories, U.S. Central Command will not be able to determine whether losses occurred or determine the exact amount of losses of controlled and non-controlled pharmaceuticals at each location.  As a result of the accountability and safeguarding deficiencies identified, the controlled and non-controlled pharmaceuticals at these locations are subject to loss, theft, abuse, and diversion.

Audit of Department of Defense Use of Security Assistance Funds and Asset Accountability
This audit determined that DoD Components did not recover their costs for executing security assistance programs in accordance with the Arms Export Control Act and the DoD Financial Management Regulation.  Additionally, the audit determined that DoD Component personnel did not maintain accountability of DoD assets or maintain accurate Special Defense Acquisition Fund inventory records in accordance with applicable criteria.  As a result, DoD Components may have violated the “Purpose Statute” and the Antideficiency Act by incorrectly using DoD appropriations to pay for security assistance-related overhead expenses.  Without accurate locations or quantities of Special Defense Acquisition Fund inventory, DoD personnel will not know what the DoD has in storage, which may lead to a shortage of materiel necessary to meet the needs of U.S. foreign partners.  Conversely, DoD personnel may order materiel that the DoD already owns, wasting Government funds which could be put to better use.

Followup Audit on Recommendations to Correct Building Deficiencies at the Naval Station Great Lakes Fire Station
This followup audit determined that Navy officials had taken some corrective actions in response to the five recommendations made in Report No. DODIG-2012-132,  “Project Planning Resulted in Outstanding Building Deficiencies and Decreased Functionality of the Main Fire Station at Naval Station Great Lakes,” September 14, 2012, by implementing three recommendations, and partially implementing one, but did not implement the remaining recommendations.  In addition to the building deficiencies identified in the prior report, this followup audit found 17 new deficiencies at the main fire station, building 106 and a lack of oversight procedures for Navy personnel to ensure proper maintenance of the building.  Furthermore, potential health and safety concerns similar to those identified in the prior for the main fire station, building 106 were identified in the Naval Station Great Lakes second fire station, building 2801.  While Navy officials have made improvements to the main fire station, building 106 the fire station still poses a risk to the health and safety of firefighters and does not comply with Unified Facilities Criteria, which provides a standard for all technical criteria and specifications for planning, designing, constructing, operating, and maintaining real property facilities. 

Audit of U.S. Special Operations Command Testing and Evaluation
This audit determined that U.S. Special Operations Command (USSOCOM) officials did not verify that reviewed Special Operations–Peculiar (SO-P) equipment programs met performance requirements during test and evaluation prior to fielding.  Despite not verifying that SO-P equipment met key performance parameters through test and evaluation, USSOCOM personnel issued full or conditional fielding and deployment releases that did not identify unverified key performance parameters.  Key performance parameters are the equipment attributes that are most critical for mission effectiveness.  Without verification through test and evaluation, USSOCOM has no assurance that the SO-P equipment met the key performance parameters.  As a result, USSOCOM purchased and fielded SO-P equipment, valued at $815.8 million, without verifying that the equipment met user needs.  Based on user comments, the equipment may not meet the requirements established in the key performance parameters, and therefore would not be operationally effective. 

Lead Inspector General Operation Freedom’s Sentinel Quarterly Report to the United States Congress April 1, 2020 through June 30, 2020
This Lead Inspector General (Lead IG) quarterly report for Operation Freedom’s Sentinel—the U.S. counterterrorism mission against al Qaeda, Islamic State of Iraq and Syria (ISIS)–Khorasan, and their affiliates in Afghanistan, and the NATO-led Resolute Support mission to train, advise and assist the Afghan security forces—summarizes the quarter’s key events and describes completed, ongoing, and planned Lead IG and partner agency oversight work related to Operation Freedom’s Sentinel. This report discusses statements made by the United Nations Security Council and U.S. Central Command that the Taliban have remained supportive of al-Qaeda and have worked with them to launch attacks against Afghan security forces.  As a result, the U.S. Central Command commander maintains that the Taliban have not met the conditions set forth for the U.S. to withdrawal its forces from Afghanistan.

Lead Inspector General Operation Inherent Pacific Eagle-Philippines Quarterly Report to the United States Congress April 1, 2020 through June 30, 2020
This Lead IG quarterly report for Operation Pacific Eagle-Philippines, the overseas contingency operation to support the Armed Forces of the Philippines’ fight against ISIS affiliates and other terrorist organizations, summarizes the quarter’s key events and describes completed, ongoing, and planned Lead IG and partner agency oversight work related to Operation Pacific Eagle-Philippines.  In addition, the report discusses the efforts of ISIS-East Asia to capitalize on the Philippine government’s deployment of military assets to assist with the response to the coronavirus disease–2019 pandemic.  While ISIS-East Asia carried out its most deadly attack in 15 months, the levels of violence in the Philippines were similar to previous quarters.

Lead Inspector General for East Africa and North West Africa Counterterrorism Operations Quarterly Report to the United States Congress April 1, 2020 through June 30, 2020
This Lead IG quarterly report for the East Africa Counterterrorism Operation and the North and West Africa Counterterrorism Operation—to degrade al Qaeda and ISIS affiliates, and other terrorist groups, in designated regions of Africa—summarizes the quarter’s key events and describes completed, ongoing, and planned Lead IG and partner agency oversight work related to East, North, and West Africa Counterterrorism Operations.  This report discusses the small-scale attacks in the southern desert region of Libya by ISIS-Libya and the intensity of the on-going civil war in northern Libya as more foreign fighters and mercenaries deploy to the area to fight on both sides of the conflict. 

Audit of the Air Force Remotely Piloted Aircraft Operations and Maintenance Support Contract
This audit determined that the Acquisition Management and Integration Center (AMIC) ensured that the Remotely Piloted Aircraft contractor complied with contractually required maintenance procedures and performance requirements.  Furthermore, AMIC verified the accuracy of contractor invoices prior to payment and only reimbursed the contractor for contractually allowable costs.  However, AMIC did not formally document its invoice review process.  Rather than using written procedures, AMIC staff reviewed 100 percent of contractor invoices relying on informal guidance from the contracting officer and program manager to ensure AMIC only paid the contractor for contractually compliant performance and only reimbursed the contractor for costs eligible under the terms of the contract.  As a result of AMIC’s contract oversight, AMIC had assurance that the $124 million spent on the Remotely Piloted Aircraft contract was for contractually compliant services and only included costs eligible for reimbursement.  However, without a documented invoice review process, future contracting and program management staff may inconsistently review invoices, which could result in payments to the contractor for ineligible costs. 

Substantiated Findings of Misconduct by a Former Department of Defense Senior Official for Sexually Harassing Subordinate Employees
The DoD Office of Inspector General (OIG) initiated this investigation upon receipt of allegations that a DoD member of the Senior Executive Service (SES) — who has since retired— assigned to an agency subordinate to the Under Secretary of Defense for Research and Engineering, sexually harassed subordinate agency employees.  The DoD OIG concluded that the SES violated DoD and agency Civilian Equal Employment Opportunity Anti-Sexual Harassment Program’s zero tolerance policies when he, repeatedly sought out and made deliberate, unwelcomed physical contact with subordinate employees over a 7-year period.  The SES also made inappropriate comments about this unwelcomed physical contact to a subordinate employee, which created an intimidating, hostile, and offensive work environment for agency employees.  The SES retired before the DoD OIG investigation concluded; however, the DoD OIG completed its investigation and provided the final report to the head of the agency for appropriate action.  The DoD OIG also notified the Office of Personnel Management of the substantiated conclusion.

Evaluation of the United States Military Support of Department of Homeland Security Southern Border Security Operations Under Title 10 Authority
This evaluation determined that the use of DoD title 10 personnel to support the Department of Homeland Security southern border security operations was authorized by Federal laws and DoD policies.  This evaluation also determined that DoD title 10 personnel supporting the Department of Homeland Security were provided adequate training on the Standing Rules for the Use of Force and on the potential reaction to contact with civilians or migrants; and that the use of DoD funds for support to Department of Homeland Security southern border security operations complied with applicable Federal laws and DoD policies.

Evaluation of Department of Defense Enhanced End-Use Monitoring for Equipment Transferred to the Government of Ukraine
This evaluation determined that DoD officials complied with Enhanced End-Use Monitoring requirements for the Javelin missiles and their Command Launch Units.  However, the DoD did not fully comply with Enhanced End-Use physical inventory requirements for night vision devices until 2018, four years after the Armed Forces of Ukraine received them in 2014.  As a result, a key database for tracking night vision devices did not have current information about their location or condition.  This occurred because the U.S. defense assistance to Ukraine increased from $35 million in 2013 to $400 million in 2019 and was not matched by an increase in U.S. Embassy staff.  Moreover, U.S. Embassy officials stated that a U.S. European Command policy required any DoD official who wanted to go east of the Dnieper River to obtain an approved Force Protection Plan.  Since the main international airport servicing Kyiv is east of the Dnieper River, it was difficult for DoD officials to visit Ukraine, making oversight of the Enhanced End-Use Monitoring process more difficult.  This report is Controlled Unclassified Information.

DEFENSE CRIMINAL INVESTIGATIVE SERVICE HIGHLIGHTS (to view DOJ press release, if available, please click on title)

Former Federal Government Employee and Active Duty Soldier at Camp Mabry in Austin Admit to Stealing over $1 Million in Military Equipmen
On August 6, 2020, the Department of Justice (DOJ) announced that an active duty soldier and a former Federal government employee at Camp Mabry in Austin, Texas, admitted to stealing and unlawfully selling more than $1 million in items from the military installation.  On August 4, 2020, 35-year old Joseph Mora of Schertz, Texas, a former program analyst at the U.S. Property and Fiscal Office warehouse, pleaded guilty to one count of theft of Government property.  On August 6, 2020, 27-year old Texas National Guardsman Cristal Avila of Fort Worth, Texas pleaded guilty to the same charge.  By pleading guilty, Avila and Mora admitted to conducting a scheme to remove large quantities of sensitive military grade equipment from the facility without authorization, including rifle scopes, infrared laser aiming devices, and thermal night vision goggles.  Mora later sold many of the stolen items on eBay and other outlets.  Avila and Mora face up to ten years in Federal prison and have agreed to pay restitution to the Government for the stolen items as well as profits generated from the sale of those items.  This was a joint investigation with the Defense Criminal Investigative Service (DCIS), Homeland Security Investigations, the U.S. Army Criminal Investigations Command, the U.S. Postal Inspection Service, and the Texas Rangers.

Forest Park Anesthesiologist Sentenced to Five and a Half Years in Federal Prison
On August 10, 2020, an anesthesiologist at the center of a $200 million fraud scheme at Forest Park Medical Center in Dallas, Texas, was sentenced to five and a half years confinement and ordered to pay more than $82.9 million in restitution.  Richard Ferdinand Toussaint, Jr., who is already serving a 41-month Federal prison sentence for a separate health care fraud conviction, pleaded guilty to his involvement in the Forest Park scheme in March 2018, admitting to one count of conspiracy to pay health care bribes and kickbacks and one count of illegal remuneration under the Travel Act.  Dr. Toussaint acknowledged that he teamed up with co-defendant Dr. Wade Neal Barker, a bariatric surgeon, to launch Forest Park Medical Center, a physician-owned hospital for bariatric and spinal surgery patients, in 2008.  Together with Forest Park hospital manager Alan Andrew Beauchamp, Dr. Toussaint, Dr. Barker, and their colleagues conspired to steer lucrative patients, including TRICARE patients, to the now defunct hospital by paying surgeons for referrals.  These kickbacks totaled more than $40 million. Dr. Toussaint was one of 18 convicted in the scheme.  This was a joint investigation with DCIS, the U.S. Office of Personnel Management Office of Inspector General (OPM OIG), the Federal Bureau of Investigation (FBI), the U.S. Department of Labor OIG, the U.S. Department of Labor Employee Benefits Security Administration, and Internal Revenue Service Criminal Investigation (IRS-CI), with assistance from the Food and Drug Administration Office of Criminal Investigations (FDA-OCI).

Former Vance Air Force Base Major Sentenced to Two Years in Federal Prison for Taking Kickbacks Involving Compounding Pharmacies
On August 10, 2020, Romeatrius Moss, a nurse and former Air Force Major stationed at Vance Air Force Base in Enid, Oklahoma, was sentenced to serve 24 months in prison for health care fraud, after having pleaded guilty on October 15, 2019.  Moss was also ordered to pay restitution in the amount of $622,459 and forfeit her residence in Enid.  During the course of the scheme, Moss solicited and received kickbacks totaling $73,823.06 in return for referring prescriptions for members of the U.S. military to compounding pharmacies that were reimbursed by TRICARE.  Moss admitted that while she was employed in the medical unit at Vance Air Force Base, she gave military members pre-printed prescription pads and enticed them to ask their doctors for specific compounded drugs.  She then sent the prescriptions or caused them to be sent to specific pharmacies.  This was a joint investigation with DCIS, the FBI, and the Air Force’s Office of Special Investigations.

NextHealth Marketer Charged in $60 Million Kickback Scheme
On August 20, 2020, the DOJ announced a pharmacy marketer who allegedly collected more than $60 million in illegal kickbacks was charged with violating the Federal Anti-Kickback Statute.  On August 18, 2020, a Federal grand jury indicted Vinson Woodlee, owner of Med Left LLC, on one count of conspiracy to pay and receive healthcare kickbacks and three counts of soliciting and receiving healthcare kickbacks.  According to the indictment, Mr. Woodlee served as a marketer for NextHealth, a pharmacy and laboratory services company controlled by Andrew Hillman and Semyon Narosov.  NextHealth allegedly identified the industry’s most profitable prescriptions (including compound pain cream, scar cream, pain patches, and wellness supplements) then illegally paid physicians to prescribe those medications through NextHealth pharmacies, funneling some of the kickbacks through marketers like Mr. Woodlee.  In exchange for enlisting physicians to participate in the scheme, Mr. Woodlee allegedly demanded roughly 50 percent of the profits from each prescription and refill written by the doctors he recruited.  He then funneled a portion of the money to prescribing physicians and sub-marketers, keeping the rest for himself.  From 2012 to 2018, Mr. Woodlee allegedly collected more than $60 million in kickbacks.  Because NextHealth billed Federal insurers like Medicare, TRICARE, CHAMPVA, and FECA in addition to private insurers, NextHealth and its marketers were subject to and allegedly violated the Federal Anti-Kickback Statute.  This was a joint investigation with DCIS, the FBI, the U.S. Department of Health & Human Services (HHS) OIG, the U.S. Department of Veterans Affairs OIG, the FDA-OCI, IRS-CI, the U.S. Department of Justice OIG, the U.S. Postal Inspection Service, OPM OIG, and HHS’s Medicaid Fraud Control Unit.

ANNOUNCED PROJECTS (to view the announcement letters, if available, please click on the title)

Followup Audit of the Army's Management of the Heavy Lift VIII Contracts to Meet Changing Middle East Missions
The objective of this follow-up audit is to determine whether the Army implemented corrective actions identified in Report No. DODIG-2017-095, “U.S. Army's Management of the Heavy Lift VII (HL 7) Commercial Transportation Contract Requirements in the Middle East,” June 26, 2017 in the Heavy Lift VIII contracts to improve oversight and performance.

Audit of the Development and Use of Security Classification Guides to Protect Department of Defense Information
The objective of this audit is to determine whether DoD Components developed security classification guides in accordance with DoD guidance and handled information consistently across the DoD.

Audit of the Department of Defense Compliance in FY 2020 With Improper Payment Reporting Requirements
The objective of this audit is to determine whether, in FY 2020, the DoD complied with Public Law 116-117, “Payment Integrity Information Act of 2019,” March 2, 2020.  This audit is required by Public Law 116-117, “Payment Integrity Information Act of 2019,” March 2, 2020.

Evaluation of the National Security Agency Integration of Artificial Intelligence
The objective of this evaluation is to assess the National Security Agency's integration of artificial intelligence into signals intelligence operations, in accordance with DoD and Intelligence Community initiatives for artificial intelligence.