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The natural, inalienable rights and legal rights of the citizenry to be accurately informed must not, by corruption, be perverted, lest that citizenry, acting on such perversion in their daily judgments, certainly suffer       to their physical and spiritual detriment.
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        US Department of Housing and Urban Development -            Office of Inspector General

The U.S. Department of Housing and Urban Development (HUD), Office of Inspector General (OIG), assisted the U.S. Department of Justice (DOJ), Washington, DC, and the U.S. Attorney’s Office for the Middle District of Florida in a civil investigation of Financial Freedom Acquisition, a division of CIT Bank, N.A. Financial Freedom was originally owned by IndyMac Bank until its failure in 2008, when the Federal Deposit Insurance Corporation was appointed as conservator. On March 18, 2009, OneWest Bank, N.A., based in Pasadena, CA, acquired the assets of Financial Freedom. On August 3, 2015, CIT Group acquired OneWest Bank, including Financial Freedom. The home equity conversion mortgage (HECM) servicing operations for Financial Freedom were located in Austin, TX.

On May 16, 2017, Financial Freedom entered into a settlement agreement with the Federal Government to pay $68,274,944 to avoid the delay, uncertainty, inconvenience, and expense of lengthy litigation.  Financial Freedom also had paid HUD more than $21,000,000 related to the covered conduct through HUD’s Supplemental Claims system, for a total settlement value of $89,274,944.  The Federal Government alleged that Financial Freedom sought to obtain insurance payments for debenture interest from HUD and did not disclose on the insurance claim forms that the lender was not eligible for such interest payments.  The settlement was neither an admission of liability by Financial Freedom nor a concession by the United States that its claims were not well founded.

As a result of Financial Freedom’s conduct, lenders on relevant HECMs obtained additional debenture interest that they were not entitled to receive.  HUD incurred substantial losses when it paid additional debenture interest on HECM claims on the loans covered by the settlement agreement.  Of the total $89,274,944 settlement, the Federal Housing Administration received $41 million, and the remaining amount was paid to other Federal entities.






Postal Service Employee Sentenced for Lying About Cancer to Take Sick Leave

August 23, 2017


Read the full news release here.



U.S. Department of Justice



On Aug. 21, Judge R. Gary Klausner of the U.S. District Court for the Central District of California entered an order that revoked the naturalized U.S. citizenship of a fraudster and immigration-officer impersonator, restrained and enjoined her from claiming any rights, privileges, or advantages of U.S. citizenship, and ordered her to immediately surrender and deliver her Certificate of Naturalization and any other indicia of U.S. citizenship to federal authorities, the U.S. Department of Justice, U.S. Immigration and Customs Enforcement (ICE) and U.S. Citizenship and Immigration Services (USCIS) jointly announced.



Reports from the Library of Congress.

Legal Research Report: Blasphemy and Related Laws

The Law Library of Congress is proud to present the report, Blasphemy and Related Laws

This report surveys laws criminalizing blasphemy, defaming religion, harming religious feelings, and similar conduct in 77 jurisdictions. In some instances the report also addresses laws criminalizing proselytization. Laws prohibiting incitement to religious hatred and violence are outside the scope of this report, although in some cases such laws are mentioned where they are closely intertwined with blasphemy. The report focuses mostly on laws at the national level, and while it aims to cover the majority of countries with such laws, it does not purport to be comprehensive.

More information on this report is available in an In Custodia Legis blog post.

This report is one of many prepared by the Law Library of Congress. Visit the Comprehensive Index of Legal Reports page for a complete listing of reports and the Current Legal Topics page for our highlighted and newer reports. 


NNS170824-08. US Navy Identifies One Dead, Nine Missing USS John S. McCain Sailors 

From U.S. 7th Fleet Public Affairs

CHANGI NAVAL BASE, Republic of Singapore (NNS) -- After more than 80 hours of multinational search efforts, the U.S. Navy suspended search and rescue efforts for missing USS John S. McCain (DDG 56) Sailors in an approximately 2,100-square mile area east of the Straits of Malacca and Singapore. 

Ten Sailors went missing following a collision between the Arleigh Burke-class guided-missile destroyer and the Liberian-flagged merchant vessel Alnic MC Aug. 21. 

U.S. Navy and Marine Corps divers will continue search and recovery efforts inside flooded compartments in the ship for the missing Sailors. 

The divers recovered the remains of one Sailor, confirmed as Electronics Technician 3rd Class Kenneth Aaron Smith, 22, from New Jersey. 

Still missing are: 

-Electronics Technician 1st Class Charles Nathan Findley, 31, from Missouri 

-Interior Communications Electrician 1st Class Abraham Lopez, 39, from Texas

-Electronics Technician 2nd Class Kevin Sayer Bushell, 26, from Maryland

-Electronics Technician 2nd Class Jacob Daniel Drake, 21, from Ohio

-Information Systems Technician 2nd Class Timothy Thomas Eckels Jr., 23, from Maryland

-Information Systems Technician 2nd Class Corey George Ingram, 28, from New York

-Electronics Technician 3rd Class Dustin Louis Doyon, 26, from Connecticut

-Electronics Technician 3rd Class John Henry Hoagland III, 20, from Texas

-Interior Communications Electrician 3rd Class Logan Stephen Palmer, 23, from Illinois 

Multinational search efforts included ships and aircraft from the Republic of Singapore Navy, Singapore Air Force, Singapore Maritime Port Authority, Singapore Police Coast Guard, Royal Malaysian Navy, Malaysian Maritime Enforcement Agency, Indonesian Navy and Royal Australian Air Force. 

The incident is under investigation to determine the facts and circumstances of the collision.


Household Restrictions Waived, Individual Notes Are Now Available 

2017 $2 Single Note Collection

2017 $2 Single Note Collection Image


First Day of Sale: August 1, 2017 (8:00 a.m., ET) – The Bureau of Engraving and Printing (BEP) is pleased to introduce the 2017 $2 Single Note Collection, featuring Series 2013 $2 notes from the New York, Atlanta, and San Francisco Federal Reserve Banks and a Series 2009 note from the Dallas Federal Reserve Bank with non-matching serial numbers beginning with 2017. Each note is protected by a clear, acid-free polymer sleeve in an attractive folder representative of the corresponding Federal Reserve District.

Please visit our website for more product information. CLICK HERE


U.S. Department of Justice



Virginia Beach, Virginia-based contractor ADS Inc. and its subsidiaries have agreed to pay the United States $16 million to settle allegations that they violated the False Claims Act by knowingly conspiring with and causing purported small businesses to submit false claims for payment in connection with fraudulently obtained small business contracts, the Department of Justice announced today. The settlement further resolves allegations that ADS engaged in improper bid rigging relating to certain of the fraudulently obtained contracts. The settlement with ADS ranks as one of the largest recoveries involving alleged fraud in connection with small business contracting eligibility.

08/10/2017 12:00 AM EDT

The Justice Department announced today that Barrios Street Realty LLC, a company based in Lockport, Louisiana, has paid approximately $108,000 to 12 U.S. workers pursuant to a settlement with the department. The payments are part of a March 2016 settlement that resolved claims that Barrios discriminated against U.S. workers in violation of the Immigration and Nationality Act (INA).


Investigations by the Office of the Inspector General at the Department of Transportation
Former Safety Manager Pleads Guilty To Fraudulent Operation of Commercial Passenger Bus Companies
On August 15, 2017, Yu Hua Mei, a former safety manager, pled guilty to conspiracy charges in U.S. District Court, Harrisburg, PA. Mei admitted she made materially false statements on FMCSA-regulated commercial carrier forms. Mei was indicted in March 2016, along with 14 other individuals, for her role in a multi-State scheme to fraudulently operate commercial bus companies.
The indictment alleged that the defendants formed, controlled, managed, and operated numerous suspect bus companies—including All-State Travel Bus, Asia Tours, Apex Bus, New Egg Bus, and Universe Bus—and routinely falsified FMCSA Motor Carrier Identification Reports and applications for FMCSA operating authority. The conspirators concealed who operated the companies and that the buses they operated were unsafe.
Mei admitted that she and her conspirators incorporated the companies in Pennsylvania. They also falsely represented that they were headquartered, maintained, and garaged in Pennsylvania, while in fact, the companies operated in New York City. The false documents enabled the defendants to obtain operating authority, licenses, stickers, and other authority, indicating that the buses met Federal and State safety standards. Incorporating in Pennsylvania while operating in New York City also significantly reduced their insurance costs.
The indictment further alleged that the defendants falsified FMCSA-regulated records related to bus safety, maintenance, and driver qualifications to impede FMCSA inspections and reviews. Specifically, they submitted false documents indicating that the fraudulent companies had driver safety and training programs in place when they did not, and false records related to accident registers, hours of service, vehicle maintenance, drug and alcohol testing programs, and previous company affiliations and associations.
DOT-OIG is conducting this investigation with HSI and the Pennsylvania Attorney General’s Office. FMCSA has provided substantial assistance.


The following is a statement by Secretary of the Navy Richard V. Spencer on USS John S. McCain, which was involved in a collision with the merchant vessel Alnic MC while underway east of the Straits of Malacca and Singapore on Aug. 21.





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The Postal Service has released a Sustainability Report outlining its goals to improve economic, environmental, and social practices. This year’s report included a stakeholder survey that revealed several critical issues for success. Our latest OIG Blog examines the report and the goals outlined by USPS. Read the blog post here:


Meet Robyn, the DoD's Blended Retirement System guru! In this video Robyn discusses the facts and the fiction of BRS.


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Release No. 0086.17

Contact: USDA Press Office
Phone: (202) 720-4623

Secretary Perdue Announces Tony Tooke as New Forest Service Chief

(Washington, D.C., August 21, 2017) – U.S. Secretary of Agriculture Sonny Perdue today announced Tony Tooke will serve as the new Chief of the U.S. Forest Service. Tooke has worked for the Forest Service since age 18 and currently is the Regional Forester for the Southern Region. Following the announcement, Secretary Perdue issued this statement:

“The Forest Service will be in good hands with the U.S. Forest Service’s own Tony Tooke whose knowledge of forestry is unmatched. Tony has been preparing for this role for his whole professional life, and at a time when we face active and growing fires, his transition into leadership will be seamless. He will oversee efforts to get our forests working again, to make them more productive, and to create more jobs. His focus will be on ensuring we are good neighbors and are managing our forests effectively, efficiently, and responsibly, as well as working with states and local governments to ensure the utmost collaboration. No doubt, the stewardship of our forests is an awesome and sacred responsibility, and no one knows that better than Tony who has dedicated his career to this noble cause,” said Secretary Perdue.

Tony Tooke Biography:

Tony Tooke is the Regional Forester for the Southern Region of the USDA Forest Service. Tooke has worked for the Forest Service since age 18, including many assignments in Region 8 and the Washington Office (WO).

He is responsible for 3,100 employees, an annual budget exceeding $400 million, 14 national forests, and two managed areas, which encompass more than 13.3 million acres in 13 states and Puerto Rico.

His previous position in Washington, DC was Associate Deputy Chief for the National Forest System; with oversight of Lands and Realty, Minerals and Geology, Ecosystem Management Coordination, Wilderness and Wild and Scenic Rivers, the National Partnership Office, and Business Administration and Support Services. 

As Associate Deputy Chief, Tooke was the Forest Service Executive Lead for Environmental Justice; Farm Bill implementation; and implementation of the Inventory, Monitoring, and Assessment Improvement Strategy. Another priority included implementation of a new planning rule for the National Forest System. 

Also in the WO, Tooke served as Director for Ecosystem Management Coordination, Deputy Director for Economic Recovery, and Assistant Director for Forest Management.

Prior to 2006, Tooke served as Deputy Forest Supervisor for the National Forests in Florida as well as District Ranger assignments at the Talladega NF in Alabama, the Oconee NF in Georgia, and the DeSoto NF in Mississippi. His other field assignments were Timber Management Assistant, Other Resource Assistant, Silviculturist, and Forester on six Ranger Districts in Mississippi and Kentucky.     

Tooke grew up on a small 200-acre farm in Detroit, AL. He earned a bachelor’s degree in Forestry from Mississippi State University. He was in the Forest Service’s inaugural class of the Senior Leadership Program, and he has completed the Senior Executive Service Candidate Development Program.


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U.S. Commodity Futures Trading Commission (CFTC) Chairman J. Christopher Giancarlo today appointed Bruce Tuckman, an internationally-recognized economist and expert in modern derivatives markets, as the agency’s Chief Economist.



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Company Fired Female Employee After Learning She Was Pregnant, Federal Agency Charges


SAN DIEGO — Tarr, Inc. and Zenith, LLC, a San Diego-based company that sells dietary supplements, violated federal law when it fired an employee within days of learning of her pregnancy, the U.S. Equal Employment Opportunity Commission (EEOC) charged in a pregnancy discrimination lawsuit filed today.


According to EEOC’s lawsuit, an employee who worked at Tarr, Inc. in San Diego informed the company of her pregnancy and was terminated ten days later. The EEOC also contends that the com­pany discharged other pregnant employees or refused their requests to return to work after taking maternity leave. Tarr, Inc. merged with Zenith, LLC in 2016.


Such alleged conduct violates Title VII of the Civil Rights Act of 1964, as amended by the Pregnancy Discrimination Act. The EEOC filed suit in U.S. District Court for the Southern District of California (EEOC v. Tarr, Inc., and Zenith, LLC, Case No. 3:17-cv-01660-W-WVG) after first attempting to reach a pre-litigation settlement through its conciliation process. The EEOC’s suit seeks back pay, compensa­tory and punitive damages for the female employee and a class of similarly affected employees, as well as injunctive relief intended to prevent further discrimination at the business.


“Pregnancy discrimination continues to be a persistent problem,” said Anna Park, regional attorney for the EEOC’s Los Angeles District, whose jurisdiction includes San Diego County. “Employers should be cognizant of their obligations under federal law to maintain a workplace free of discrim­ination.”


Christopher Green, director of the EEOC’s San Diego local office, added, “Women should not have to choose between their job or having children. Employers need to be aware that the EEOC takes pregnancy discrimination seriously and the agency will continue to protect the rights of pregnant employees.”


The EEOC advances opportunity in the workplace by enforcing federal laws prohibiting employ­ment discrimination. More information is available at Stay connected with the latest EEOC news by subscribing to our email updates.




Legal Research Reports: Foreign Intelligence Gathering Laws and Government Access to Encrypted Communications

The Law Library of Congress is proud to present two reports, Foreign Intelligence Gathering Laws and Government Access to Encrypted Communications.

The Foreign Intelligence Gathering Laws report contains information on laws regulating the collection of intelligence in the European Union, United Kingdom, France, Netherlands, Portugal, Romania, and Sweden. The report details how EU Members States control activities of their intelligence agencies and what restrictions are imposed on information collection.  All EU Member States follow EU legislation on personal data protection, which is a part of the common European Union responsibility. A comparative summary is available.

More information on this report is available in an In Custodia Legis blog post.

The Government Access to Encrypted Communications report describes the law of 12 nations and the European Union on whether the government, pursuant to a court order or other government process, can require companies to decrypt encrypted communications or provide the government with the means to do so. Some of the surveys provide additional information on related surveillance issues like the law on monitoring and intercepting communications. The report finds that while there is a range of approaches among the surveyed countries, a majority make provision for specified intelligence or law enforcement agencies to obtain access to encrypted communications or the means of decryption under certain circumstances.

More information on this report is available in an In Custodia Legis blog post.

These reports are two of many prepared by the Law Library of Congress. Visit the Comprehensive Index of Legal Reports page for a complete listing of reports and the Current Legal Topics page for our highlighted and newer reports. 


Investigations by the Office of the Inspector General at the Department of Transportation
California Airline Transport Pilot Pleaded Guilty to Identity Theft
On July 25, 2017, Nazal Sadiq pleaded guilty in U.S. District Court, Oakland, California, to identity theft. Sadiq, an airline transport pilot, submitted falsified FAA documents to a foreign air carrier.
In December 2015, Sadiq applied for a position with Korean Air Lines (KAL). During the application process, Sadiq presented KAL with an FAA temporary airman certificate that contained a falsified Boeing 777 rating. By doing this, Sadiq fraudulently represented to KAL that he was qualified to perform as a pilot-in-command, when in fact he was not.
DOT-OIG conducted this investigation with the FBI.


U.S. Department of Justice

08/04/2017 12:00 AM EDT



I want to thank Director Coats for being here. Together, we lead the National Insider Threat Task Force that was established in 2011. This task force has an important role to play and one we are taking seriously. Progress has been made and we intend to reach a new level of effectiveness.


The Department of Justice announced that the U.S. District Court for the Eastern District of New York entered two separate consent decrees of permanent injunction against New York company Everbright Trading Inc., its owner Yuan Xiang Gao, and its operator/manager Rong Qing Xu, and New York companies Lily Popular Varieties & Gifts Inc., Great Great Corporation, and their owners and operators Li Jing and Cheng Feng You. The injunctions generally prohibit the defendants from importing and selling toys and other children’s products until certain remedial measures are implemented.

A grand jury in the Northern District of California returned an indictment, which was unsealed today, charging five individuals with conspiring to submit fraudulent claims for tax refunds, announced Acting Deputy Assistant Attorney General Stuart M. Goldberg of the Justice Department’s Tax Division and U.S. Attorney Brian J. Stretch for the Northern District of California. Two of the individuals were also indicted for bank fraud.


A Louisiana woman pleaded guilty to four counts of preparing fraudulent tax returns, announced Acting Deputy Assistant Attorney General Stuart M. Goldberg of the Justice Department’s Tax Division and Acting U.S. Attorney Duane A. Evans for the Eastern District of Louisiana.



Investigations by the Office of the Inspector General at the Department of Transportation
Pilot Pleads Guilty To Making False Statements in Connection With a Plane Crash
On July 28, 2017, private pilot Brian Woodhams pleaded guilty in U.S. District Court, Buffalo, New York, to making false statements to FAA aviation safety inspectors and a DOT-OIG special agent regarding the crash of his airplane on October 31, 2015 at Perry-Warsaw Airport in upstate New York. At the time of the crash, Woodhams was a certificated student pilot prohibited by FAA rules from having passengers in his aircraft without a flight instructor present. However, he had a passenger during this particular flight, which he denied when interviewed by FAA and DOT-OIG officials. The passenger was injured in the crash.
This investigation is being conducted by DOT-OIG and FAA’s Flight Standards District Office. The prosecution is being handled by the U.S. Attorney’s Office, Western District of New York.


Investigations by the Office of the Inspector General at the Department of Transportation
Former New York Doctor Sentenced in Connection with Fraudulent CDL Medical Examinations
On July 26, 2017, Gerald Surya, a former medical doctor, was sentenced in U.S. District Court, Brooklyn, New York, to 6 months’ home confinement, 5 years’ probation, a $3,000 fine, a $50,000 criminal forfeiture, and a $100 special court assessment. In October 2016, Surya pleaded guilty to a fraud charge related to the falsification of DOT medical examinations.
Surya, who practiced medicine at JFK Medport, located at New York’s John F. Kennedy Airport, approved the use of unqualified medical assistants and interns to conduct DOT medical examinations for commercial driver’s license (CDL) applicants. The medical assistants and interns forged his name on medical forms and certificates, although Surya was not present for the examinations. Commercial motor vehicle drivers are required to provide a valid medical examiner’s certificate to the New York State Department of Motor Vehicles (NYS-DMV) to obtain their CDLs.
DOT-OIG conducted this investigation with NYS-DMV Investigations, with assistance from the Federal Motor Carrier Safety Administration.



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VA OIG Administrative Investigations Division issued a report titled: Administrative Investigation - Improper Approval and Use of Leave, VA Medical Center, Chillicothe, Ohio




Department of Justice
Acting United States Attorney W. Stephen Muldrow
Middle District of Florida

FOR IMMEDIATE RELEASE                                                                                                               
August 1, 2017

Fort Myers, Florida – Acting United States Attorney W. Stephen Muldrow announces that Twaski Jackson (38, Lee County) today pleaded guilty to a two count information charging him with stealing and embezzling thousands of dollars from the City of Fort Myers Housing Authority and the Lee County Housing Authority. Both agencies receive federal funds to further their mission of providing affordable housing to low income families. Jackson faces a maximum penalty of 10 years in federal prison for each count. A sentencing date has not yet been set.    

According to the plea agreement, Jackson served as the Director of Client Services for both housing authorities from 2012 until 2016. As part of his position, he had the authority to approve credit card disbursements and checks written on behalf of the agencies. Jackson used that authority to approve expenditures that benefited himself and his friends. Various personal charges were made, including payments of his own college tuition and personal trips. He also improperly paid a “vendor” (actually Jackson’s friend) who performed no services for the agencies, without authorization. The two then split the money.

Over a three-year period, Jackson bilked the agencies for over $86,000.  Jackson’s plea agreement requires him to forfeit the proceeds of his crime and to repay his victims.

This case was investigated by the U.S. Department of Housing and Urban Development. It is being prosecuted by Assistant United States Attorney Michael V. Leeman.


Investigations by the Office of the Inspector General at the Department of Transportation
California Waste Water Company Official Pleads Guilty to State Charges Related to a Hazardous Materials Fraud Scheme
On July 12, 2017, Santa Clara Waste Water Company (SCWWC) shift supervisor Kenneth Douglas Griffin, Jr., pleaded guilty in Superior Court of California, Ventura County, to conspiracy to impede enforcement by a Certified Unified Program Agency official, knowing failure to warn of serious concealed danger, interference with enforcement, and repeated violations of labor safety standards.
Griffin was indicted on August 19, 2015, for his role in a November 18, 2014, explosion at the SCWWC facility in Santa Paula, California. Griffin was the onsite shift supervisor at the time of the explosion, which was caused by the mixing and disposal of hazardous chemicals in a vacuum truck that was not rated to transport chemicals. SCWWC stored hazardous materials in excess of the amounts it was permitted to keep in its inventory, and company officials transferred these materials to an unsecured truck lot offsite prior to scheduled inspections. On the morning of the explosion, a Defense Logistics Agency contractor was conducting a scheduled inspection of SCWWC, and internal cleanup efforts were underway. Hazardous materials had been sucked from approximately 20 unlabeled chemical totes into a vacuum cargo tank trailer when the explosion occurred. Numerous employees, first responders, and others were injured either by the explosion or when they inhaled toxic vapors that developed onsite shortly afterward. SCWWC also disposed of hazardous waste by utilizing a wastewater pipeline to the city of Oxnard’s sewage plant and trailers to the Chiquita Canyon Landfill; neither facility was approved for the disposal of hazardous waste.
Griffin was involved in the transfer of hazardous materials to an offsite storage yard just prior to scheduled inspections; he failed to warn employees about a serious concealed danger at the plant, specifically, the presence of sodium chlorite; and he failed to provide sufficient communication regarding chemicals that were mislabeled or entirely unlabeled at the SCWWC site.
DOT-OIG conducted this investigation with the Environmental Protection Agency-Criminal Investigation Division (EPA-CID), and the Ventura County District Attorney’s Office.


Investigations by the Office of the Inspector General at the Department of Transportation
Painting Company Owner Sentenced in Payroll Scheme on a $43M Bridge Painting Contract in Philadelphia
On July 18, 2017, Maria Savakis, of Merritt Island, Florida, was sentenced in U.S. District Court, Philadelphia, Pennsylvania, to 2 years of probation and $2,600 in fines. Previously, on April 18, 2017, Savakis pleaded guilty to theft from a healthcare program related to a $61,689 payroll scheme involving construction work performed on the Federal Highway Administration (FHWA)-funded George C. Platt Memorial Bridge Project in Philadelphia. Savakis was charged by information in March 2017.
In April 2011, the Pennsylvania Department of Transportation (PennDOT) awarded Joint Venture (JV) an approximately $42.7 million contract to perform structural steel painting and repairs on the Platt Bridge. Joint Venture (JV) was composed of two companies; one of them, Hercules Painting Company, was owned by Savakis.
The information alleged that Savakis devised and carried out a payroll scheme under which the JV paid its employees on two separate payrolls. One payroll, which constituted only a portion of the hours worked, was reported on the certified payrolls at the full prevailing wage rate required by the DOT-funded contract. The second payroll, which paid the employees for their remaining hours at a lower rate, was not reported on the certified payrolls. As part of the payroll scheme, and as a consequence of submitting false certified payrolls to PennDOT and the Department of Labor (DOL), Savakis caused JV to retain $61,689 that the company was obligated by law and under contract to deposit on behalf of its employees into the welfare fund of the International Union of Painters and Allied Trades District Council No. 21. On May 11, 2017, FHWA suspended and proposed the debarment of Hercules Painting and Savakis.
DOT-OIG worked this is investigation jointly with the FBI, DOL-OIG, EPA-CID, Homeland Security Investigations, and IRS-Criminal Investigations. FHWA and PennDOT provided substantial assistance.



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NEWARK, N.J. – A Newark police officer today admitted conspiring to fraudulently obtain payments under the federal public housing assistance program known as “Section 8,” Acting U.S. Attorney William E. Fitzpatrick announced.

Luis Cancel, 50, pleaded guilty before U.S. District Judge Jose L. Linares in Newark federal court to an information charging him with one count of agreeing with another individual to obtain Section 8 public housing benefits to which they were not entitled.

According to documents filed in this case and statements made in court:

The Section 8 Program is a federal public housing assistance program administered by the U.S. Department of Housing and Urban Development (HUD). It provides rent subsidies to qualified low-income individuals. HUD provided federal grant money to the Newark Housing Authority (NHA) for the Section 8 Program. Under the NHA’s Section 8 Program, a tenant’s rental assistance was based upon the tenant’s anticipated family gross income. Tenants receiving Section 8 assistance from the NHA had to inform the NHA of all members of the household and the annual household income.

From January 2010 to May 2015, Cancel, then a Newark police officer, lived with another person (Individual 1) who was receiving Section 8 benefits. Cancel and the other individual agreed not to disclose to the NHA that they were living together or that Cancel was a Newark police officer, and, also, a security guard with the Robert Treat Hotel. Individual 1 submitted fraudulent documents to the NHA that failed to disclose these facts. Cancel also submitted letters...






We audited the Louisville-Jefferson County Metropolitan Government’s Housing Opportunities for Persons With AIDS (HOPWA) program. We selected Louisville Metro for review based on a management referral from the U.S. Department of Housing and Urban Development’s (HUD) Louisville, KY, Office of Community Planning and Development and in accordance with our annual audit plan. Our audit objective was to determine whether Louisville Metro administered its HOPWA program in accordance with HUD’s and its own requirements.

Louisville Metro did not always administer its HOPWA program in accordance with HUD’s and its own requirements.  Specifically, it did not always ensure that program disbursements to its project sponsors were adequately supported and appropriate.  In addition, the executive director of one of Louisville Metro’s subrecipients, AIDS Interfaith Ministries of Kentuckiana, Inc. (AIM), mismanaged its funds.  These conditions occurred because Louisville Metro did not understand the program requirements and did not sufficiently monitor AIM’s controls over cash management.  As a result, program disbursements totaling more than $31,000 were not adequately supported, and disbursements totaling more than $14,000 were inappropriate under the program.  In addition, AIM had ceased operations; therefore, it did not complete the administration of program funds allocated to it.

We recommend that the Director of HUD’s Louisville, KY, Office of Community Planning and Development require Louisville Metro to (1) support or reimburse its HOPWA program more than $45,000 for inadequately supported and inappropriate disbursements from non-Federal funds, (2) provide adequate training to its staff responsible for reviewing and approving expenditures to ensure compliance with HUD’s and Louisville Metro’s requirements, and (3) implement adequate procedures for conducting sufficient monitoring of its project sponsors’ cash management.





We audited the City of Birmingham, AL’s Community Development Block Grant Disaster Recovery (CDBG-DR) grant. We selected the City for review based on concerns by the U.S. Department of Housing and Urban Development’s (HUD) Birmingham Office of Community Planning and Development in regard to the City’s administration of its disaster recovery program. Our audit objectives were to determine whether the City ensured that (1) administrative costs were properly allocated, (2) only eligible projects were selected and only eligible applicants participated in the program, (3) adequate policies and procedures were implemented for program management, (4) funds were spent only for activities that were eligible and supported, (5) it adequately monitored activity and performance, (6) there was no duplication of benefits, and (7) procurement of goods or services was conducted according to applicable requirements.

The City generally administered its CDBG-DR funds in accordance with HUD requirements. It ensured that administrative costs were allocated correctly, only eligible projects and applicants participated in the program, funds were spent only for eligible activities that were adequately monitored, there was no duplication of benefits, procurement of goods and services was conducted according to applicable requirements, and all applicable projects were completed under the national objective of being located in a low- and moderate-income area. However, the City did not conduct internal audits of the CDBG-DR program and did not develop or update, finalize, and implement its policies and procedures for its internal audits and the transition from 24 CFR (Code of Federal Regulation) 85.36 to 2 CFR Part 200 for its procurement contracts.

We recommend that the Director of the Birmingham Office of Community Planning and Development require the City to (1) develop and implement HUD-approved policies and procedures to ensure that the process for conducting an internal audit complies with HUD regulations; (2) immediately conduct an internal audit; and (3) update, finalize, and implement its procurement policies to comply with 2 CFR Part 200.



Investigations by the Office of the Inspector General at the Department of Transportation
California Waste Water Company Official Convicted and Sentenced for Hazardous Materials Fraud Scheme
On July 25, 2017, Walter James Mitzel, chief executive officer (CEO) at Santa Clara Waste Water Company (SCWWC), pleaded no contest in the Superior Court of California, Ventura County, to misdemeanor violations for failing to update a business plan within 30 days, failing to update a hazardous materials inventory, interference with enforcement, and violation of labor safety standards by failing to provide personal protective devices to employees. Mitzel was sentenced to 36 months’ probation and ordered not to personally engage in any certifications to public agencies concerning monitoring worker safety to chemical exposures in the workplace; uniform hazardous waste manifests; hazardous materials response plans; or the collection of samples for the purpose of demonstrating compliance with local, State, and Federal permits and environmental laws. In addition, he paid $350,000 in restitution at the time of his plea.
In August 2015, Mitzel was indicted for his role in the November 18, 2014, explosion at the SCWWC facility in Santa Paula, California. The explosion was caused by the mixing and disposal of hazardous chemicals into a vacuum truck that was not rated to transport chemicals. The explosion caused over 1,000 gallons of chemicals to spill, resulting in a fire that set off a series of explosions. Toxic smoke blanketed the area around SCWWC, causing everyone within a mile to evacuate and everyone within a 3-mile radius to shelter in place, as well as the closure of an elementary school and Highway 126. Numerous employees, first responders, and others were injured either by the explosion or by inhaling toxic vapors.
DOT-OIG conducted this investigation jointly with the Environmental Protection Agency’s Criminal Investigation Division and the Ventura County District Attorney’s Office.


New CFTC Banner

The U.S. Commodity Futures Trading Commission’s (CFTC) Division of Market Oversight (DMO) announced today that it has issued the results of a rule enforcement review of the North American Derivatives Exchange Inc. (Nadex).



Because mail processing efficiency is a key goal for the U.S. Postal Service, it’s important that postal management uses all the tools at its disposal – such as the Mail Processing Variance (MPV) model – to improve productivity. MPV measures annual mail processing performance and efficiency, but a recent OIG audit report indicated that USPS was not employing it to its fullest extent. In this week’s Pushing the Envelope blog, we discuss the benefits of the MPV model. The OIG also wants your opinion: What ideas do you have to improve the MPV model? What ways could plant managers improve operations? Tell us on our blog:

U.S. Postal Service, mail processing variance, MPV, mail processing, Headquarters Network Operations















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