2003 Conflict of Interest
Prosecution Survey
[CASE 1] [The
Government employee] was an Acting Supervisor District Adjudications Officer
and the District Adjudications Officer for the U.S. Immigration and
Naturalization Service (INS) in Sacramento, California. [Businessman A] was an
immigration consultant with a private company, Gateway Express. [He] assisted
immigrants with the process of becoming citizens and did substantial business
with the Sacramento INS office.
[Businessman A]
gave to [the Government employee] the following items: a dozen cases of wine
and champagne and a cash gift at his wedding; a complimentary casino room at South Lake Tahoe; and monthly parking in Sacramento at a below-market rate. In exchange
for these gifts, [the Government employee] provided expedited service and
special assistance to [Businessman A] on immigration matters.
[The Government
employee] pleaded guilty to 3 misdemeanor counts of violating 18 U.S.C. §
209(a), receiving compensation from a private party for services rendered to
the U.S. He was sentenced to 36 months’ probation, a $75 special assessment,
and home detention for 90 consecutive days. An appeal is pending. Because [he]
waived appeal in his plea agreement, the Government will be moving to dismiss
the appeal.
The Eastern
District of California handled the prosecution.
[CASE 2] [The
Government employee] was a rating assistant technician with the San Diego office of the Department of Veterans Affairs (VA). His duties included
gathering evidence and information regarding each claimant’s case and
submitting the claim to the rating board for a determination of benefits.
Between April 2000 and May 2003, [he] assisted certain veterans in expediting
their disability benefits claims through the VA and allowed veterans to submit
inflated claims to the VA. In exchange for this assistance, he received
approximately $4,500 in cash payments from these claimants.
[The Government
employee] pleaded guilty to 1 felony count of a violation of 18 U.S.C. §
209(a), unlawfully accepting supplementation of his Government salary. He was
sentenced to 4 years’ supervised probation, a $10,000 fine, a $100 special
assessment, and 120 hours of community service as part of special conditions of
probation. (Probation will terminate early if he pays the total fine and
completes the community service before 4 years has elapsed.)
The Southern
District of California handled the prosecution.
[CASE 3] [The
Government employee] was an active duty Coast Guard captain until July 31, 2000, when he retired. As a Coast Guard officer, he worked extensively in the
field of Loran technology. Loran is a low frequency system that is used for
aircraft navigation. Loran is distinct from the Global Positioning System (GPS).
Since 1998, the
U.S. Department of Transportation (DOT) has funded research intended to
determine whether the Loran and GPS systems could be integrated using
"Loran-C" technology. DOT assigned research funds through the
Federal Aviation Administration (FAA) to, among others, the Coast Guard. The FAA
hired a private consulting company, [Company A], to oversee the Loran-C
project.
In or about
March 2000, while still on active duty, [the Coast Guard officer] contacted [Company
A] concerning future employment/consulting opportunities after his retirement
from the Coast Guard. Around May 2000, while still in contact with [Company A]
about employment opportunities, [he] drafted a statement of work relating to
the Loran-C project.
After his
retirement from the Coast Guard, he formed [an LLC]. He then entered into a
consulting arrangement with [Company B], which had been hired as a subcontractor
to work on the Loran-C project. He agreed to provide consulting services to [Company
B] in connection with the Loran-C project.
As part of his
work for [Company B], he communicated regularly with FAA personnel and Coast
Guard personnel concerning the Loran-C project. The conversations included an
e-mail to Government employees in which he urged the Government employees to purchase
equipment that he needed for the project. Between the time of [his] retirement
from the Coast Guard and early 2003, [Company B] paid [the LLC] at least
$392,000 for its services in connection with the Loran-C project.
The Government
maintained that [the Coast Guard officer] violated 18 U.S.C. § 208(a) by
negotiating future employment with [Company A] while drafting the statement of
work on a project that was overseen by [Company A]. The Government also
maintained that he violated 18 U.S.C. § 207(a)(1) by making a communication to
Government personnel with the intent to influence them concerning a matter over
which he had exercised personal and substantial responsibility while a Coast
Guard officer.
The Department
of Justice entered into a settlement agreement with [the Coast Guard officer].
He paid a civil penalty of $25,000, without admitting liability.
The District of
Connecticut handled the prosecution.
[CASE 4] [The
Government employee] was employed by the Department of the Navy as a
Construction Representative in the Office of the Resident Officer in Charge of
Construction. In June 1998 [he] had become the Construction Representative on 2
[Company C] contracts with the Navy. [He] was responsible for conducting
inspections to ensure that [Company C] was in compliance with the contract
specifications.
[The Government
employee] also owned a business, [Z Contractors]. While he was an inspector on
the [Company C] contracts, [he] approached [Company C’s] project manager and
asked if there was a way he could make extra money. [Company C’s] project
manager then hired [Z Contractors] as a subcontractor on one of the projects [the
Government employee] was overseeing for the Navy. [The Government employee]
did not tell his supervisors that his company had been hired as a subcontractor
on a job he was inspecting.
Between June
1998 and January 1999 [Z Contractors] received approximately $26,000 in
payments from Company C] under the subcontract. [The Government employee]
submitted invoices to the [Company C] project manager for work [Z Contractors]
allegedly did for [Company C]. He gave a portion of the payments he received
from [Company C] to [its] project manager. [The Government employee] admitted
that he knew his being paid as a subcontractor was a clear conflict of interest
and that the kickbacks to the project manager were a reward for being awarded
the subcontract.
[The Government
employee] pleaded guilty to 1 count of violating 18 U.S.C. § 208, which bars an
employee from taking official action in matters affecting certain personal or
organizational financial interests, and 1 count of violating 41 U.S.C. § 53
(the Anti-Kickback Act of 1986). He was sentenced to 3 years’ probation on
each count, 6 months’ home detention with electronic monitoring, 100 hours of
community service, a $10,000 fine, and a $200 special assessment.
The District of
Hawaii handled the prosecution.
[CASE 5] [The
Government employee] was employed in the administrative office of the U.S.
Department of the Interior’s Geological Survey. Her official responsibilities
included purchasing office supplies and services using a Government-issued
credit card. Between October 2000 and March 2001, [she] received
approximately $500 in retail gift cards from a vendor because she ordered supplies
for the Government from his company.
[She] pleaded
guilty to 1 misdemeanor count of violating 18 U.S.C. § 209, unlawfully
accepting supplementation of her Government salary. She was sentenced to 2
years of supervised probation, 100 hours of community service, and a $25
special assessment.
The Public
Integrity Section of the Criminal Division of the Department of Justice handled
the prosecution.
[CASE 6] [The
Government employee] was employed as a purchasing agent in the administrative
office of the U.S. Department of Agriculture. Her official responsibilities
included purchasing office supplies and services using a Government-issued
credit card. In or about July 2000, [she] received a $500 retail gift card
from a vendor because she ordered supplies for the Government from his company.
[She] pleaded
guilty to 1 misdemeanor count of violating 18 U.S.C. § 209, unlawfully
accepting supplementation of her Government salary. She was sentenced to 1
year of supervised probation, a $500 fine, 10 hours of community service, and a
$25 special assessment.
The Public
Integrity Section of the Criminal Division of the Department of Justice handled
the prosecution.
[CASE 7] [The Government
employee] worked as an agricultural economist for the U.S. Department of Agriculture (USDA). His official duties included inviting groups of Chinese
nationals with expertise in agriculture to the U.S. to meet with officials at
the USDA. Beginning in late 1999, [he] conspired with visa brokers based in California and China to locate Chinese nationals who were willing to pay to come to the U.S. and who were not eligible to receive visas. The Chinese nationals would pay approximately
$10,000 each to the visa brokers, who then provided their names and bogus
biographical information to [the Government employee]. [He] wrote letters on
USDA letterhead to be presented to U.S. consulates in China, stating that the Chinese nationals were agricultural specialists invited to the United States for official meetings. [The Government employee] knew when he drafted the
letters that the Chinese nationals in question were not agricultural
specialists and that the meetings would not take place.
Also as part of
the scheme, [the Government employee] drafted and signed letters from his wife
on behalf of her company, [Company D]. These letters purported to confirm
invitations to the Chinese nationals. [The Government employee] showed several
of these letters to [his wife]. [She] deposited in [Company D] accounts the fees
paid to [her husband] for his role in the conspiracy. As a result of this
scheme, 99 Chinese nationals received non-immigrant visas to enter the United States. [The Government employee] and [his wife] received approximately $82,000 for
their role in this scheme.
[The Government
employee’s wife] pleaded guilty to 1 count of aiding and abetting an unlawful
conflict of interest in violation of 18 U.S.C. §§ 208 and 2. She was sentenced
to 2 years’ probation, 100 hours of community service, and a $25 special
assessment. Although [the Government employee] was not charged with a
violation of 18 U.S.C. § 208, he was charged with 1 count of conspiring to
commit visa fraud in violation of 18 U.S.C. §§ 371 and 1546. The outcome of
his case is pending.
The Public
Integrity Section of the Criminal Division of the Department of Justice handled
the prosecution.
[CASE 8] As
Chief of Staff for the President’s Critical Infrastructure Protection Board
(PCIPB) in the Office of Homeland Security, [the Government employee] was
responsible for the establishment and management of the Board, including
matters of personnel, budget, and administration. Beginning in December 2001
and continuing through July 2002, [he] recommended and participated in the
proposed procurement of a support contract for the Board in the amount of
approximately $600,000. The PCIPB and the Office of Administration in the
Executive Office of the President initially designed the procurement as a sole
source contract to be awarded to a particular company (Company). Later the
proposed procurement was revised and handled as a competitively bid contract.
In May 2002, [the Government employee] informed the Company of the Government’s
decision to procure the contract through a competitive bid.
Not later than July 9, 2002, [the Government employee] began negotiating for employment with the
Company. On July 16, he asked the Acting General Counsel for the Office of
Administration for assistance in moving forward for approving the
implementation of the procurement for the PCIPB support contract. On July 18 he
visited the offices of the Company and interviewed with them for potential
employment. On July 19 he contacted the Office of the White House Counsel in
order to recuse himself from all matters related to the Company. On July 23 he
received an offer of employment from the Company. On July 24 he was provided
with a recusal memorandum which he executed immediately. He accepted the
Company’s offer of employment on August 1, 2002.
In September
2002, following a competitive bid and evaluation process, the PCIPB support
contract was awarded to the Company. Upon learning of conflict of interest
concerns by the White House Counsel’s Office, [the Government employee]
informed the White House Counsel’s Office that the Company had withdrawn its
job offer and he would not begin employment with the Company. The White House
Counsel’s Office referred the matter to the Department of Justice.
The Government maintained
that [the Government employee’s] conduct was a violation of 18 U.S.C. § 208,
participating personally and substantially in a particular matter in which, to
the official’s knowledge, an organization with which he is negotiating for
prospective employment has a financial interest.
DOJ entered into
a settlement agreement with [the Government employee]. He paid a civil penalty
of $5,000.
The Public
Integrity Section of the Criminal Division of the Department of Justice handled
the prosecution.
[CASE 9] The
Office of the Chief Technology Officer (OCTO), District of Columbia, is
responsible for providing the technological support for all agencies within the
District of Columbia. To fulfill this responsibility, the OCTO solicits
contracts from private vendors who can provide these services. Because many of
the OCTO’s employees do not have advanced technological training, OCTO
contracts with outside consulting companies to obtain individuals with the
required technological knowledge to assist with the solicitations and
subsequent contracts. These individuals, known as program or project managers,
serve as consultants for OCTO in its relationships with the private vendors who
bid for contracts with OCTO.
Beginning in
January 1999, [the District of Columbia employee] was one of these program managers
for OCTO. At that time, he was employed by [Company E], which had contracted
to provide consulting services for OCTO. [The District of Columbia employee] later
ended his relationship with [Company E] and recommended to OCTO that it
contract with [Company F] to provide consulting services for the office. As
part of the contract between [Company F] and OCTO, [the District of Columbia employee] continued working as a program manager for OCTO. [He] received a flat
salary for his work. OCTO paid [Company F] pursuant to its contract, and [Company
F] then paid [the District of Columbia employee] his salary. There was no
additional agreement for [him] to receive a contingency fee.
In the course of
his duties as a program manager, [the District of Columbia employee] dealt directly
with vendors who were soliciting business from OCTO. He provided vendor
selection criteria and recommended to OCTO the vendors who should be awarded
Government contracts. He also provided technical assistance and managed many
of the projects between the District of Columbia agency receiving the technology
and the private vendor providing the technology.
During the fall
of 2000 [the District of Columbia employee] asked the owner of [Company F] for
an additional payment of approximately $36,000. [The District of Columbia
employee] asserted that he was entitled to 15% of the income that [Company F]
received under its contract with OCTO as additional compensation for his work
in providing vendors to OCTO. [The owner of Company F] refused to pay. The
incident was then reported to the authorities.
The U.S.
Attorney’s Office for the District of Columbia considered [the District of Columbia employee] to be a Government employee for purposes of 18 U.S.C. §
208(a). [He] pleaded guilty to 1 count of a violation of 18 U.S.C. § 208(a),
committing unlawful acts affecting a personal financial interest. He was
sentenced to 1 year’s probation and ordered to pay $1,000 in restitution and a
$25 special assessment.
The U.S.
Attorney’s Office for the District of Columbia handled the prosecution.
[CASE 10] In
May 2003 [Defendant A] appeared for his citizenship interview before [the
Government employee], District Adjudication Officer in Santa Ana, CA. [Defendant A] gave [the Government employee] $200 in cash in an envelope during his
interview for citizenship. During a post-arrest interview, [Defendant A]
admitted to giving $200 to [the Government employee] with the intention that
she would look favorably upon his interview, particularly the English
proficiency portion.
[Defendant A]
pleaded guilty to a violation of 18 U.S.C. § 209(a). He was sentenced to 1
year’s probation.
The Central
District of California handled the prosecution.
