Semi-Annual Report to Congress for the Period of October 1, 2006 to March 31, 2007
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Office of the Inspector General
[Excerpt] I am pleased to submit this Semiannual Report to the Congress, which highlights the most significant activities and accomplishments of the Department of Labor (DOL), Office of Inspector General (OIG), for the six-month period ending March 31, 2007. During this reporting period, our investigative work led to 312 indictments, 249 convictions, and over $151 million in monetary accomplishments. In addition, we issued 40 reports and questioned $22 million in costs. OIG audits made significant recommendations to address vulnerabilities identified in DOL programs and operations. For example, we issued a performance audit of an administrative agency for a Workforce Investment Board (WIB). The audit questioned $1.3 million in building costs and identified $11.6 million in unsupported labor cost distributions. The OIG audited another WIB which had received a Federally funded grant. This audit determined that the WIB had not conducted full and open contract competitions, which resulted in over $3.1 million in questioned costs. Our investigations continue to combat labor racketeering in the workplace and fraud against the Foreign Labor Certification Programs and other DOL programs. For example, an OIG investigation into a labor certification fraud case resulted in an immigration attorney being sentenced to 40 months imprisonment and ordered to forfeit $2 million. One of our most significant investigations resulted in the sentencing of two officials of the American Maritime Officer’s Association union to 78 and 15 months of imprisonment, respectively. By dominating and controlling the union operations and its employee benefit plans, they used the union as a racketeering enterprise to embezzle money and defraud its members. In another investigation, a member of the Genovese La Cosa Nostra Crime Family pled guilty and was sentenced to 13 months of imprisonment for extorting salary payments from officers of a drywall industry union in New York City. We have been focusing closely on Employee Retirement Income Security Act (ERISA) benefit plan corruption, especially relative to cases involving service providers. Moreover, an OIG investigation led to an investment manager/adviser being ordered to serve 23 months of imprisonment and to pay restitution of $4.2 million to the benefit plans of a Teamsters local union after pleading guilty to charges of embezzlement, fraud, and theft. Since the summer of 2005, the OIG provided audit and investigative oversight of the DOL’s response to Hurricane Katrina. We conducted an audit during this period to determine the financial impact of claimants using invalid Social Security Numbers to obtain unemployment benefits. An OIG investigation led to the sentencing of the owner of a disaster reconstruction company for fraud. The OIG remains committed to promoting the economy, integrity, effectiveness, and efficiency of DOL. I would like to express my sincere gratitude to a professional and dedicated OIG staff for their significant achievements during this reporting period. Finally, I appreciate the constructive relationship between my office and the Department.
Office of the Inspector General; Department of Labor; audit; employee integrity; fraud; Congress