Newsletter
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.
UPCOMING REPORTS
Significant reports expected to be issued within the next 30 days include:
Audit of the National Maintenance Strategy Contract in Afghanistan
This audit determines whether the Army developed contract requirements for the National Maintenance Strategy–Ground Vehicle Systems to meet vehicle maintenance and sustainment needs for the Afghan National Defense and Security Forces (ANDSF). The National Maintenance Strategy Contract provides training to the ANDSF on vehicle maintenance, sustainment, and supply chain management. In addition, the contract provides training to ANDSF on software systems used to track vehicle inventory, maintenance, work orders, vehicle supplies, and parts.
Audit of the Management of Non-Major Defense Acquisition Category 2 and 3 Programs
This audit determines whether Army, Navy, and Air Force acquisition officials appropriately identified Acquisition Category (ACAT) 2 and 3 programs and monitored program cost and schedules aligned with their respective acquisition category designation. DoD acquisition programs are classified at the appropriate ACAT level depending on estimated program costs and the type of acquisition. ACAT 2 programs are major systems estimated to cost between $185 million and $480 million for research, development, test, and evaluation, or between $835 million and $2.8 billion for procurement. ACAT 3 programs fall below the ACAT 2 minimum thresholds for research, development, test, and evaluation and procurement.
Audit of Cost Increases and Schedule Delays for Military Construction Projects at Joint Region Marianas
This audit determines why select military construction projects, such as maintenance hangars, wharf improvements, and fuel pipeline upgrades, were over budget and delayed at Joint Region Marianas, a joint U.S. military command located on Guam. Federal law defines military construction as construction, development, conversion, or extension of any kind carried out with respect to a military installation, whether to satisfy temporary or permanent requirements, or any acquisition of land or construction of a defense access road.
Audit of the DoD Personal Property Program Related to Household Goods Shipments
This audit determines whether DoD members received personal property shipments in a
timely manner and whether actions were taken to address household goods that were damaged or lost during permanent change of station moves. The DoD is the single largest customer in the personal property shipping industry, representing approximately 15 percent of all domestic and international moves. The U.S. Transportation Command is responsible for administering the DoD Personal Property Program, which was developed to improve the permanent change of station process for DoD service members, civilians, and their families by promoting quality of service and streamlining the overall process.
Audit of Jordan Border Security Program Oversight
This audit determines whether the Defense Threat Reduction Agency ensured that contractor-provided equipment, such as infrared cameras, surveillance radars, intrusion detection devices, and training met contract requirements for the Jordan Border Security Program. The Jordan Border Security Program seeks to enhance border security between Jordan, Syria, and Iraq by providing U.S. military assistance support to the Jordan Armed Forces. In April 2011, the Defense Threat Reduction Agency awarded the Cooperative Threat Reduction Integrating Contract II, an indefinite delivery, indefinite quantity contract, to Raytheon Technical Services Company. The contract provides equipment and training to the Jordan Armed Forces and other partner nations to strengthen their border security, and build their capacity to prevent the proliferation of foreign extremists and weapons of mass destruction throughout the region.
Risk Assessment of the DoD’s Grant Closeout Process
This risk assessment determines whether an audit of the DoD’s grant closeout process is warranted. DoD grants and cooperative agreements are federal assistance agreements for specified purposes. The Grants Oversight and New Efficiency Act of 2016, Public Law 114-117, requires that the Inspector General of an agency with more than $500 million in annual grant funding, such as the DoD, conduct a risk assessment to determine whether an audit of the agency’s grant closeout process is warranted.
Audit of DoD’s Implementation of the Cybersecurity Information Sharing Act of 2015 Requirements
This audit determines whether the DoD took actions to implement the requirements for the Cybersecurity Information Sharing Act of 2015. Specifically, the audit will determine whether (1) policies and procedures for sharing cyber threat indicators are sufficient; (2) cyber threat indicators and defensive measures have been properly classified; (3) security clearances authorized for the purpose of sharing cyber threat indicators and defensive measures with the private sector are properly accounted for; (4) threat indicators and defensive measures are properly reviewed when shared with Federal or non-Federal entities; and (5) barriers to sharing cyber threat indicators and defensive measures have been properly assessed.
Summary of DoD Cybersecurity Reports Issued and DoD Testimony Regarding Cybersecurity Made from July 1, 2018, Through June 30, 2019
This audit summarizes unclassified and classified cybersecurity reports and testimonies from the DoD oversight community and the Government Accountability Office issued between July 1, 2018, and June 30, 2019. It also identifies cybersecurity risks related to the five functions of the National Institute of Standards and Technology Cybersecurity Framework, and identifies the open DoD cybersecurity recommendations from the summarized reports.
Audit of the Readiness of Arleigh Burke-Class Destroyers
This audit determines whether the Navy has identified and addressed previously identified readiness challenges for Arleigh Burke-class destroyers. Arleigh Burke-class destroyers are multi-mission, surface combatant ships capable of conducting anti-air warfare, anti-submarine warfare, and anti-surface warfare. This report is classified.
Combatant Command Integration of Space Operations Into Military Deception Plans
This audit determines whether U.S. European Command and U.S. Indo-Pacific Command have integrated space operations into their military deception plans as part of their efforts to protect the United States and its allies against adversarial space capabilities. This report is classified.
Audit of DoD’s Accountability of Equipment Designated for Syria
This audit determines whether the DoD accounted for and properly stored equipment designated for Syria that was procured with Counter-Islamic State of Iraq and Syria Train and Equip Funds from procurement through divestment. This report is classified.
Audit of the Global Command and Control System – Joint Security Controls
This audit determines whether DoD Combatant Commands and Military Services have implemented physical and logical security controls for the Global Command and Control System-Joint (GCCS-J) to protect DoD data and information technology assets. The GCCS-J is designed to provide DoD military commanders secure and reliable information on the operational environment including air, land, maritime, space, and cyberspace. Additionally, the GCCS-J allows users to plan movement of troops and equipment across theaters of operation and build operations for enhanced combat situational awareness. This report is classified.
Evaluation of the Integrated Enterprise Ground Service Environment
This evaluation determines whether the Air Force Space Command developed a plan to implement the Enterprise Ground Services. The Enterprise Ground Services is a prototype of a set of command and control functions for multiple satellite constellations. These command and control functions consist of hardware and software applications that allow operators to use satellites for command and control of ongoing operations.
Evaluation of the DoD Counterintelligence Workforce Capacity Development
This evaluation determines whether the Military Services are providing enough credentialed counterintelligence personnel to meet overseas contingency operations requirements. This report is classified.
Evaluation of DoD Processes and Procedures for Issuing Post Government Employment Opinion Letters in Compliance with Section 847
This evaluation determines whether DoD ethics counselors and covered officials complied with the requirements to request and complete opinion letters under the National Defense Authorization Act for FY 2008, Section 847, “Requirements for Senior Department of Defense Officials Seeking Employment with Defense Contractors.” Covered officials are former DoD personnel who participated personally and substantially in an acquisition with a value in excess of $10 million while serving in an executive schedule position, a senior executive service position, or a general or flag officer position. Covered officials also include former DoD personnel who served as a program manager, deputy program manager, procuring contracting officer, administrative contracting officer, source selection authority, member of the Source Selection Evaluation Board, or chief of a financial or technical evaluation team for a contract in excess of $10 million.
Evaluation of DoD Policies and Procedures to Provide Interoperable and Sustainable Counter Small Unmanned Aircraft Systems
This evaluation determines whether the Counter Unmanned Aircraft Systems Senior Integration Group coordinated with and integrated efforts of the Military Services and other DoD Components to meet evolving Unmanned Aircraft System threats. This report is classified.
Recently issued Reports of Interest (to view report, if available, please click on title)
2019 DoD OIG Federal Employee Viewpoint Survey
The DoD OIG continued to show significant improvement in its Federal Employee Viewpoint Survey results. This year, the DoD OIG’s scores increased between 1 and 5 points on almost every question. The DoD OIG now exceeds the Government and DoD averages for all but a couple of questions—and for many questions, the DoD OIG exceeds the averages by a very significant amount. These positive results are a product of initiative, hard work, and attention from many employees, supervisors, and managers throughout the OIG who have focused on making the OIG a better organization year after year.
Semiannual Report to the Congress April 1, 2019 through September 30, 2019
The DoD OIG released its Semiannual Report to the Congress covering the reporting period of April 1, 2019, through September 30, 2019. The DoD OIG has continued to be a good investment, returning more than $6 for every $1 invested in FY 2019 in support of its mission to provide independent, relevant, and timely oversight of the DoD. The report summarizes the significant work performed by the DoD OIG, including important oversight products that address contract awards, cybersecurity, and other important areas of DoD operations. The report also provides various statistical accomplishments of the DoD OIG during the reporting period. The DoD OIG also completed multiple criminal investigations, some conducted jointly with other law enforcement organizations, resulting in 209 arrests, 269 criminal charges, 226 criminal convictions, $807 million in civil judgments and settlements, and $246 million in criminal fines, penalties, and restitution ordered. In addition, the DoD OIG completed 29 senior official, reprisal, and restriction investigations, and oversaw 249 senior official, reprisal, and restriction investigations completed by the Military Service and Defense agency OIGs. These are among the many examples of the DoD OIG’s important work included in the report.
Audit of Navy and Defense Logistics Agency Spare Parts for F/A‑18 E/F Super Hornets
This audit determined that Navy and Defense Logistics Agency officials could not obtain the quantity of critical spare parts needed to satisfy current demand and fill backorders to maintain the operational readiness of the Super Hornet fleet. As a result, Navy officials cannibalized aircraft to obtain needed spare parts. Cannibalizing aircraft involves removing working parts from one aircraft and installing those parts on a second aircraft to make the second aircraft operational. Each act of cannibalization increases the risk of damage to the aircraft or part. In addition, because of backorders and cannibalization, the Navy may not meet sudden increases in operational mission readiness requirements or the Secretary of Defense’s goal of an 80‑percent mission capable rate for the Super Hornet fleet by the end of FY 2019.
Evaluation of the V-22 Engine Air Particle Separator
This evaluation determined that the Naval Air Systems Command V-22 Joint Program Office did not develop an Engine Air Particle Separator (EAPS) that protects the V-22 engine while operating in all desert environments. The EAPS is an aircraft component positioned in front of the engine of the V-22 aircraft that creates a powerful vacuum force to remove soil from the air before it enters the engine. Despite two unsuccessful redesign efforts, the EAPS did not meet the engine manufacturer’s specification. While Naval Air Systems Command V-22 Joint Program Office officials stated that it is not technically feasible to meet the engine manufacturer’s specification for air quality in a desert environment, they could not provide analysis that demonstrated whether the third redesign, which is currently underway, would adequately protect the engine. As a result, the V‑22, which combines the capabilities of a helicopter and an airplane, remains at risk, despite more than 9 years of EAPS redesign attempts.
Lead Inspector General Quarterly Reports to the United States Congress for Operation Inherent Resolve July 1, 2019 - September 30, 2019
This Lead Inspector General (IG) quarterly report for Operation Inherent Resolve (OIR), which covered the period July 1, 2019, through October 25, 2019, summarizes the quarter’s key events and describes completed, ongoing, and planned Lead IG and partner agency oversight work related to OIR. Due to significant developments in Syria in October 2019, this report extended beyond the normal quarterly reporting period of July 1, 2019, through September 30, 2019. On October 9, Turkey launched air and ground operations against Kurdish People’s Protection Unit positions in northeastern Syria. This attack initiated a series of actions that affected the OIR mission against ISIS, including the withdrawal of U.S. forces in northeastern Syria, leaving U.S. troops at the At Tanf Garrison, a desert outpost near the Jordanian border. This report stated that the departure of U.S. troops damaged the United States’ relationship with the SDF—the SDF leader called the withdrawal a betrayal. In addition, the report concluded that the withdrawal and redeployment of U.S. troops has also affected the fight against ISIS, which remains a threat in the region and globally. Furthermore, the Defense Intelligence Agency (DIA) reported to the DoD OIG that ISIS exploited the Turkish incursion and subsequent drawdown of U.S. troops to reconstitute capabilities and resources within Syria and strengthen its ability to plan attacks abroad. According to the DIA, ISIS is “postured to withstand” the death of its leader, Abu Bakr al-Baghdadi, and will likely maintain “continuity of operations, global cohesion, and at least its current trajectory.”
Lead Inspector General Quarterly Reports to the United States Congress for Operation Freedom’s Sentinel July 1, 2019 - September 30, 2019
This Lead Inspector General (Lead IG) quarterly report on Operation Freedom’s Sentinel (OFS) in Afghanistan, covering the period July 1, 2019, through September 30, 2018, summarizes the quarter’s key events and describes completed, ongoing, and planned Lead IG and partner agency oversight work related to OFS. This report stated that the suspension of the peace talks and the Afghan presidential elections were the two most significant events in Afghanistan related to OFS during this quarter. Taliban efforts to undermine the election, and a ramp-up of U.S. operations after the suspension of peace talks, contributed to the high level of violence during the quarter. This quarter was also one of the most dangerous periods in recent years for civilians in Afghanistan. NATO’s Resolute Support mission reported 4,009 civilian casualties during the quarter, an increase of 130 percent compared to the previous quarter and 60 percent compared to the same quarter last year. The data also showed there were 3,779 enemy-initiated attacks that resulted in at least one casualty during the quarter, a 34-percent increase compared to the previous quarter and a 20-percent increase compared to the same period last year. In addition, according to the DoD, regardless of if, or when, the U.S. Government reaches a settlement with the Taliban and possibly withdraws forces, the terrorist threat in Afghanistan will remain, requiring a continued U.S. counterterrorism capacity in the country.
Lead Inspector General Quarterly Reports to the United States Congress for Operation Pacific Eagle–Philippines July 1, 2019 - September 30, 2019
This Lead Inspector General (IG) quarterly report for Operation Pacific Eagle–Philippines (OPE-P), covering the period July 1, 2019, through September 30, 2019, summarizes the quarter’s key events and describes completed, ongoing, and planned Lead IG and partner agency oversight work related to OPE-P. During this quarter, ISIS–East Asia (ISIS-EA) engaged in minor clashes with the Armed Forces of the Philippines, including an attempted suicide bombing in September. The report concluded that, while Philippine jihadists have not historically employed suicide tactics, this appears to be changing. In 2019, five terrorists associated with ISIS-EA carried out or attempted three such attacks. The report attributed this increase, at least in part, to the influence of foreign fighters—this quarter, Philippine law enforcement arrested suspected terrorists from Kenya, Sweden, and Jordan. In addition, the new generation of militants in the Philippines is more extreme and ideologically driven than its predecessors. According to the report, Philippine officials are aware that they will need to examine their protocols and operations to address this apparent shift in tactics by ISIS-EA. The report also stated that challenges with mitigating the risk of unexploded ordnance continued to delay the reconstruction of the southern Philippine city of Marawi. Explosive remnants of the 2017 fighting that devastated the city’s infrastructure remain buried beneath the rubble and are a significant barrier to reconstruction. The report concluded that disputes between the Philippine government and contractors have resulted in repeated extensions of the government’s estimate of when the city will be safe for civilian construction to begin. An August Department of State cable stated that, 10 months after the Philippine government turned the search for unexploded ordnance in Marawi over to a group of private contractors, only a small portion of the city had been deemed safe for reconstruction work to begin.
Followup Audit of the Army’s Implementation of the Acquire-to-Retire Business Process in the General Fund Enterprise Business System
This followup audit determined that Army officials implemented corrective actions to address four of seven open recommendations from DoD OIG Report No. DODIG-2013-130, “Army Needs to Improve Controls and Audit Trails for the General Fund Enterprise Business System (GFEBS) Acquire-to-Retire (A2R) Business Process,” September 13, 2013. Army corrective actions included identifying A2R real property management functionality that was missing in GFEBS and posting accurate non-expenditure transfers recorded in the first three quarters of FY 2019. However, this audit also determined that the Army did not implement corrective actions to address the three remaining open recommendations from Report No. DODIG-2013-130 and three open recommendations from Report No. DODIG-2014-090, “Improvements Needed in the General Fund Enterprise Business System Budget-to-Report (B2R) Business Process,” July 2, 2014, to support the proper recording of A2R and B2R accounting transactions. These deficiencies included the inability to generate an Army-wide real property universe and the absence of a process to record minor construction-in-progress costs in GFEBS. As a result, GFEBS continued to contain unreliable A2R and B2R data.
Audit of Brigade Combat Team Readiness
This audit determined that Army Brigade Combat Team (BCT) Commanders identified and reported readiness challenges related to shortages of equipment, spare parts, and personnel that negatively impacted the readiness levels of BCTs in the commander comments section of their commander’s unit status report. The reported shortages included low bed semitrailers, modular fuel systems, and mobile gun systems; spare parts for the light- and medium-towed howitzers, the Abrams tanks, and Strykers; and personnel in the military occupational specialties of military intelligence systems maintainers/integrators, unmanned aircraft systems operators, cyber network defenders, and electromagnetic spectrum managers. The Army developed 10 plans to address these challenges and took actions to reduce shortages that degraded BCT readiness, such as a 6-year plan to procure additional low bed semitrailers from FYs 2018 through 2023. As of July 2019, the Army had completed 4 of the 10 plans to address shortages. In addition, 6 of the 10 plans were ongoing and showed progress in reducing equipment, spare parts, and personnel shortages. As a result of the Army’s efforts to address BCT readiness challenges, the Army met or exceeded the Chief of Staff of the Army’s goal of 66 percent of active component BCTs reporting the highest readiness levels for seven consecutive quarterly reporting periods from the first quarter of CY 2018 through the third quarter of CY 2019.
Audit of U.S. Army Corps of Engineers Compliance With the Digital Accountability and Transparency Act of 2014
This audit determined that the U.S. Army Corps of Engineers (USACE) did not comply with all Digital Accountability and Transparency Act (DATA Act) requirements. Although USACE implemented and used the required Government-wide data standards and the USACE DATA Act submission for the first quarter of FY 2019 was timely, the submission was not complete and contained inaccurate data. As a result, the USACE DATA Act submission published on USAspending.gov cannot be relied upon. The quality of the submission does not allow taxpayers and policy makers to track Federal spending effectively and undermines the DATA Act objective of providing quality and transparent Federal spending data on USAspending.gov.
Audit of DoD Compliance With the Digital Accountability and Transparency Act of 2014
This audit determined that the DoD did not comply with all Digital Accountability and Transparency Act (DATA Act) requirements. Although the DoD implemented and used the required Government-wide data standards and the DoD DATA Act submission for the first quarter of FY 2019 was timely, the submission was not complete and contained inaccurate data. As a result, the DoD DATA Act submission published on USAspending.gov cannot be relied upon. The quality of the submission does not allow taxpayers and policy makers to track Federal spending effectively and undermines the DATA Act objective of providing quality and transparent Federal spending data on USAspending.gov.
Evaluation of Contracting Officer Actions on Defense Contract Audit Agency Reports that Disclaim an Opinion
This evaluation determined that for 19 of the 21 audit reports reviewed, DoD contracting officers took appropriate action on the findings and recommendations in Defense Contract Audit Agency (DCAA) audit reports that disclaimed an audit opinion. However, for 2 of the 21 DCAA audit reports, the Defense Contract Management Agency contracting officers did not document adequate rationale for disagreeing with DCAA questioned costs totaling $219 million.
DEFENSE CRIMINAL INVESTIGATIVE SERVICE HIGHLIGHTS (to view Department of Justice press release, if available, please click on title)
Indictments Unsealed Alleging Pay-To-Play Bribery Scheme by Manager, Trucking Companies at Utah FedEx Ground Hub
On October 28, 2019, four indictments were unsealed alleging that several trucking companies in Utah paid more than $1 million in bribes to the Utah FedEx Ground (FXG) distribution center manager as part of a scheme to exploit the employee’s position within FXG to boost profits. Ten individuals were charged in the indictments. According to the charging documents, FXG operates approximately 39 distribution centers including a hub in North Salt Lake City, Utah. FXG contracts with local trucking companies to transport packages on behalf FXG. The indicted manager was FXG’s highest-ranking employee in Utah from 2008 to October 2019. His primary responsibilities included overseeing the FXG contract service providers, and ensuring that each local trucking company complied with FXG policies and regulations. One of the four indictments alleges that, by fraudulently obtaining runs, allowing unauthorized runs to continue, receiving payment for “ghost runs,” and falsely reporting miles to gain income—among other things—five co-conspirators received approximately $150 million from FXG and paid $300,000 in bribes to the manager. This is an ongoing investigation with the Defense Criminal Investigative Service (DCIS), the Internal Revenue Service Criminal Investigation (IRS-CI), the Department of Transportation Office of Inspector General (OIG), and the Federal Bureau of Investigation (FBI).
Nevada Man Pleads Guilty to Role in Million Dollar Scheme Targeting Thousands of U.S. Service Members and Veterans
On October 30, 2019, Frederick Brown of Las Vegas, Nevada, a former civilian medical records administrator for the U.S. Army at the 55th Medical Brigade in Yongsan Garrison, South Korea, pleaded guilty to his role in an identity theft and fraud scheme that victimized thousands of U.S. service members and veterans. By pleading guilty, Brown admitted that, from July 2014 to September 2015, he stole personally identifiable information (PII) from thousands of military members. Brown admitted to capturing the PII via digital photographs of his computer screen while he was logged into the Armed Forces Health Longitudinal Technology Application. Brown further admitted that he subsequently provided that stolen data to co-defendant Robert Wayne Boling, Jr., so that Boling and others could exploit the information to access DoD and Veterans Affairs benefits sites and steal millions of dollars. This is an ongoing DCIS investigation with support from the U.S. Postal Inspection Service, the U.S. Army Criminal Investigation Command (Army-CID), and the Veterans Benefits Administration’s Benefits Protection and Remediation Division.
Pharmacy Owner Sentenced to 10 Years in Prison for Role in Largest Health Care Fraud Case Ever in Mississippi
On October 31, 2019, Thomas Spell, Jr., of Ridgeland, Mississippi, was sentenced to 10 years confinement for his involvement in a $243 million compounding pharmacy fraud scheme. Spell’s case is part of the largest health care fraud conspiracy ever investigated and prosecuted in Mississippi. The investigation is ongoing and prosecutions are continuing nationwide, including in California, Tennessee, Arkansas, and Connecticut. As part of Spell’s sentence, he was ordered to pay more than $243 million in restitution. Spell previously pled guilty to a Criminal Information that outlined his role in the scheme to defraud TRICARE. From approximately December 2014 to January 2016, Spell owned and operated a pharmacy in Madison County, Mississippi, and several other pharmacies across the United States. During this time, Spell and other co-conspirators marketed compounded medications at his pharmacies. Rather than formulating compounded medications based on the individualized needs of patients, formulas were selected to maximize profit based upon reimbursements from TRICARE and other health care benefit programs. The result was that TRICARE reimbursed Spell’s pharmacies on these fraudulent claims totaling over $243 million. As a result of this and other fraudulent activity, Spell personally obtained over $29 million in proceeds from the illegal scheme. Spell used these proceeds to fund bank accounts and investment accounts in his name, in the name of family members, and in the name of various business entities. Spell also used these proceeds to lend money and to purchase vehicles, boats, and property. This was a joint investigation with DCIS, IRS-CI, and the FBI.
Justice Department Announces Procurement Collusion Strike Force: A Coordinated National Response to Combat Antitrust Crimes and Related Schemes in Government Procurement, Grant, and Program Funding
On November 5, 2019, the Department of Justice (DOJ) announced the formation of the new Procurement Collusion Strike Force (PCSF) focusing on deterring, detecting, investigating, and prosecuting antitrust crimes, such as bid-rigging conspiracies and related fraudulent schemes, which undermine competition in Government procurement, grant, and program funding. At a press conference, the Assistant Attorney General of the DOJ’s Antitrust Division explained that the PCSF will be an interagency partnership consisting of prosecutors from the Antitrust Division, prosecutors from 13 U.S. Attorneys’ Offices, and investigators from the FBI, the DoD OIG, the U.S. Postal Service OIG, and other partner Federal OIGs. The Antitrust Division and its law enforcement partners prosecute criminal antitrust conspiracies that take advantage of Government contracts. In late 2018 and early 2019, for instance, five South Korean oil companies agreed to plead guilty for their involvement in a decade-long bid-rigging conspiracy that targeted contracts to supply fuel to U.S. military bases in South Korea. The Antitrust Division also indicted seven individuals for conspiring to rig bids and to defraud the Government, and one executive was also charged with obstruction of justice. In total, the companies have agreed to pay $156 million in criminal fines and over $205 million in separate civil settlements. These actions were the result of a DCIS investigation with other Federal agencies.
Aventura Technologies, Inc. and its Senior Management Charged with Fraud, Money Laundering, and Illegal Importation of Equipment Manufactured in China
On November 7, 2019, a criminal complaint was unsealed in Federal court in Brooklyn, New York, charging surveillance and security equipment company Aventura Technologies, Inc. (Aventura), located in Commack, New York, and seven current and former employees, with selling Chinese-made equipment with known cybersecurity vulnerability to Government and private customers, while falsely representing that the equipment was made in the United States and concealing that they were manufactured in the People’s Republic of China (PRC). Aventura has generated more than $88 million in sales revenue since November 2010, and the charged scheme has been ongoing since 2006. For this conduct, Aventura and the seven individual defendants are charged with unlawful importation and conspiracy to commit wire and bank fraud. In the course of its investigation, the Government intercepted and covertly marked numerous shipments from PRC sources to Aventura’s Commack headquarters. In some cases, cameras shipped from the PRC were pre-marked with Aventura’s logo and the phrase “Made in USA,” accompanied by an American flag. In many instances, the items were later resold to Government agencies to whom the defendants falsely represented that the products were American-made. This is an ongoing investigation with DCIS, IRS-CI, the General Services Administration OIG, the Treasury Inspector General for Tax Administration, the U.S Customs and Border Patrol, the U.S. Air Force Office of Special Investigations, the Naval Criminal Investigative Service, the Department of Energy OIG, and the FBI.
Two Charged in Scheme to Impersonate U.S. Officials and Defraud Iraqis
On November 20, 2019, two U.S. citizens residing in Iraq were charged in two separate indictments for their alleged participation in schemes to defraud Iraqi companies out of millions of dollars by impersonating U.S. officials. Riza Mohammad and Sabah Hasan Sachet were charged in two indictments with one count of conspiracy to commit wire fraud, six counts of wire fraud, one count of false impersonation of U.S. officials, and one count of wrongful use of U.S. Government seals. The indictments allege that Mohammad and Sachet, along with their co-conspirators, induced companies doing business in Iraq to enter into fraudulent contracts, under which the victim companies were to provide materials worth millions of dollars to the U.S. Government and receive payment in return. However, the purported contracts were fraudulent, and the victim companies that provided materials or made payments to obtain the contracts were never paid. Mohammad, Sachet, and their co-conspirators allegedly e-mailed the victim companies forged contracts that contained falsified U.S. Government seals and impersonated U.S. officials during in-person meetings with the victim companies. The defendants were allegedly responsible for defrauding the victim companies out of items worth millions of dollars. This is an ongoing investigation with DCIS and Army CID.
ANNOUNCED PROJECTS (to view the announcement letters, if available, please click on the title)
Audit of the DoD Recruitment and Retention of the Civilian Cyber Workforce
The objective of this audit is to determine whether the DoD is implementing the DoD Cyberspace Workforce Strategy and using hiring authorities to recruit and retain its cyber workforce. The DoD Cyberspace Workforce Strategy provides overarching guidance to transform the DoD’s cyber workforce, states that DoD will adopt innovative recruitment methods and will partner with the Department of Homeland Security and the Federal sector to develop the national cyberspace talent pipeline.
Evaluation of Medical Protocols and Deaths of Recruits in the Department of Defense
The objective of this evaluation is to determine the effectiveness of medical protocols at the recruit training centers in the Department of Defense. For purposes of this evaluation, medical protocols are defined as guidelines, procedures, processes, instructions, and regulations regarding medical resources and capabilities available for recruits at the recruit training centers. Medical resources consist of medical personnel, medical materiel (equipment and consumable supplies), medical facilities, medical information, and patient movement resources.
Summary Evaluation on External Peer Reviews at the DoD Audit Organizations
The Government Auditing Standards require that an audit organization performing audits in accordance with Government Auditing Standards undergo an external peer review every 3 years by an organization that is independent of the organization being reviewed. The objective of this evaluation is to identify and summarize systemic deficiencies reported during the most recent cycle of peer reviews of DoD audit organizations and determine whether improvements have been made since the results of the last evaluation the DoD OIG issued in Report No. DODIG-2016-031, the “Summary Report on Audit Quality at the DoD Audit Organizations,” published December 14, 2015. We will use the most recent 3-year cycle of peer review reports to obtain the information necessary to support our objective.
Evaluation of the Aircraft Monitor and Control System's Nuclear Certification
The objective of this evaluation is to determine whether testing conducted on the Aircraft Monitor and Control system for DoD nuclear weapon capable delivery aircraft meets DoD and department of Energy nuclear certification requirements. This evaluation is a coordinated effort between the DoD OIG and the Department of Energy OIG. The Department of Energy OIG's objective is to determine the extent to which the Department of Energy provided oversight of the Aircraft Monitor and Control system testing requirements for nuclear weapons delivery.