Feds allege $900 million in fake medical bills, kickbacks and other health care fraud

Feds allege $900 million in fake medical bills, kickbacks and other health care fraud

The announcement of the charges, called the largest takedown for Medicare and Medicaid fraud in history, was the result of a nationwide sweep that exposed alleged kickbacks, embezzlement and fake claims to the government programs that provide health care for the elderly and the poor. The allegations involved various kinds of fraud in diverse areas of health care, ranging from prescription drugs to home health care to physical therapy. "They submitted dishonest claims, they charged excessive fees and they prescribed unnecessary drugs," Attorney General Loretta Lynch said at a news conference. "As this takedown should make clear, health-care fraud is not an abstract violation. It’s not a benign offense. It’s a serious crime."  Among the alleged fraud uncovered: More than 60 people were charged with fraud related to the prescription drug benefit portion of Medicare. The Medicare Fraud Strike Force began its work in 2007 and has charged more than 2,900 people with health-care fraud, who have billed Medicare for $8.9 billion.

Government arrests 243 in largest crackdown on health-care fraud

In Miami, the owners of a mental-health treatment center allegedly billed Medicare for tens of millions of dollars’ worth of intensive therapy that actually involved just moving people to different locations. Some of them had dementia so severe that they couldn’t even communicate. In Los Angeles, prosecutors say, one doctor collected $23 million for more than 1,000 power wheelchairs and other equipment his patients didn’t need — which he often didn’t even provide. And in Michigan, another physician allegedly prescribed unnecessary narcotic painkillers in return for the use of his patients’ IDs to generate additional false billings. When they tried to escape the scheme, authorities say, he threatened to cut off the medications, to which his patients were addicted. It turns out that the government was checking on these and other doctors, nurses and providers of psychotherapy, home care, drugs, physical therapy and medical equipment. In the single largest crackdown in an eight-year campaign against health-care fraud, the Justice Department charged 243 people Thursday with $712 million in false billings to Medicare — the medical insurance program for the elderly — and Medicaid, which serves the poor. Some of the schemes were so brazen that FBI Director James B. Comey likened health-care providers to “ATMs” for the unscrupulous. “If you want to find criminals, you follow the money,” Comey said at a news conference to announce the charges. “In this case, we followed the money and found criminals who were attracted to doctor’s offices, to clinics, to hospitals, to nursing homes in search of what they viewed as an ATM, an ATM that was a freebie to them but is actually filled with taxpayers’ money.” The alleged fraud spanned the country, from Miami — where   73 of the accused worked — to Houston, Dallas, Los Angeles, New York, New Orleans, Detroit and beyond. A sizable number allegedly targeted Medicare Part D, the prescription-drug benefit that is the fastest-growing part of the huge program. Since it was put together in 2007, the government “strike force” that focuses on health-care fraud has charged more than 2,300 people accused of falsely billing Medicare for more than $7 billion. Its efforts have been expanded with $350 million provided under the Affordable Care Act. Medicare has long been an enticing target for fraud. Last year, The Washington Post reported, a power wheelchair scam netted perpetrators untold amounts of the program’s money over 15 years. In 2011, a Miami health-care executive was sentenced to 50 years in prison for submitting more than $205 million in phony claims. As in the past, many of the current cases involve people who allegedly recruited patients, the beneficiaries themselves and others who allegedly received kickbacks for their involvement, the government charged.

More than 20 charged in federal crackdown on D.C. Medicaid fraud; services not delivered

More than 20 people were arrested Thursday on federal charges connecting them to a series of Medicaid and other health-care schemes that prosecutors say cheated taxpayers out of tens of millions of dollars. In announcing five federal indictments against 12 people and related D.C. Superior Court charges against 13 people, U.S. Attorney Ronald C. Machen Jr. said federal law enforcement officials had pulled off the largest health-care fraud takedown “in the history of the District of Columbia.” Prosecutors, FBI agents and others had investigated the fraud for years — much of it allegedly emanating from corrupt operators of home-care agencies and personal-care assistants, he said — and uncovered a problem that they say has permeated a component of the city’s health-care system. “Today’s operation makes clear that Medicaid fraud in the District of Columbia is at epidemic levels,” Machen said. “But we’re fighting back.” Those charged are accused of running separate — and sometimes competing — schemes to bill the government for in-home health-care services that were not provided. A Bowie woman also was accused of racking up more than $75 million in billings after she had been barred from being a part of federal health-care programs. Machen said that the schemes were not “overly complex” but that the groups “had it down to a science.” According to the indictments, the alleged swindlers — who included operators and workers at home-care and nurse-staffing agencies — recruited Medicaid recipients to claim that they needed expensive in-home health care, even coaching them on how to exaggerate their symptoms to persuade doctors to sign off on treatment plans. The accused would then pose as the Medicaid recipients’ personal-care assistants, having them sign time sheets while they billed the government, according to the indictments. The Medicaid recipients, though, did not need in-home care, according to the indictments. Those charged merely gave them a cut of the proceeds — usually a few hundred dollars at a time — and pocketed the rest, according to the indictments. “Doctors wrote prescriptions for these visits,” said Valerie Parlave, the assistant director in charge at the FBI’s Washington Field Office, “but no care was ever given.” Machen said the alleged swindlers were able to take “millions” from the District’s Medicaid program — which is mostly federally funded but run by the city — although investigators were still calculating the precise amount. He said law enforcement officials were partially inspired to investigate the fraud when they noticed an unusual increase in the amount of money being paid out for personal-care services. In 2006, Machen said, 2,500 Medicaid beneficiaries billed the government $40 million for personal care services. By 2013, he said, 10,000 beneficiaries were billing the government for $280 million. “It was a number that skyrocketed so much, so quickly that we obviously had to look at it,” Machen said, “and we uncovered a huge fraud in the process.” Prosecutors said that as part of the probe, they seized several luxury cars, including a 2013 Mercedes GL450 and a 2013 Porsche Panamera. The investigation was not limited to networks of those billing for in-home services they did not provide. Prosecutors said they also charged the 51-year-old Bowie woman, Florence Bikundi, alleging that she hadmore than $75 million in D.C. Medicaid billings after she was barred from participating in federal health-care programs. Bikundi, prosecutors said, used various names to hide the fact that her nursing licenses had been revoked and that her health-care companies were not eligible to receive Medicare or Medicaid payments. Machen said that investigators are still looking into whether Bikundi provided the services for which she billed the government. Online court records did not list an attorney for Bikundi on Thursday afternoon, and efforts to locate family members were unsuccessful. Get updates on your area delivered via e-mail

Md. couple sentenced to prison in $80 million Medicaid fraud in nation’s capital

A federal judge on Wednesday sentenced a Bowie, Md., wife and husband to 10 and seven years in prison, respectively, for orchestrating a multiyear campaign to defraud D.C. Medicaid of more than $80 million between 2009 and 2014, the largest local health-care fraud scheme ever prosecuted in the city. Florence Bikundi, 53, and Michael D. Bikundi Sr., 63, were ordered to forfeit more than $11 million in cash, their $1 million home and five luxury vehicles by Chief Judge Beryl A. Howell of the U.S. District Court for the District of Columbia, who also imposed a money judgment of $40 million and ordered the couple to pay $80.6 million in restitution. “Florence and Michael Bikundi enriched themselves for years by operating a rogue home care agency,” at the expense of people in need, U.S. Attorney for the District Channing D. Phillips said in a joint statement with the FBI and Secret Service Washington field offices, as well as inspectors general for the U.S. Department of Health and Human Services and the District of Columbia. “Hopefully the sentences today will serve as a deterrent to other unscrupulous health care providers who aim to steal the taxpayers’ money,” Phillips said. A federal jury in November found the couple guilty of multiple counts of money laundering, health-care fraud and conspiracy through their District-based home health-care firm, Global Health Care Services. At trial, prosecutors said the Bikundis used the company as a simple, yet massive, “get-rich-quick scheme” that enlisted trusted relatives and others to sign up and coach Medicaid recipients who received kickbacks for submitting fraudulent claims for health care that never was provided. Seven others had earlier pleaded guilty to charges in the investigation, including Florence Bikundi’s son and two sisters. Two others indicted in the investigation remain at large, prosecutors said: Christian S. Asongcha, 39, formerly of Lanham, Md., and Atawan Mundu John, 39, formerly of the District. U.S. authorities in the District announced charges in February 2014 against 25 people in separate and even competing schemes, stating that Medicaid fraud was “at epidemic levels” in the city. The number of beneficiaries billing for personal-care services had quadrupled to 10,000 since 2006, and billings grew sevenfold, to $280 million.

Federal undercover investigation signs up fake applicants for ACA coverage, subsidies

In undercover tests of the new federal health insurance marketplace, government investigators have been able to procure health plans and federal subsidies for fake applicants with fictitious documents, according to findings that will be disclosed to lawmakers Wednesday. The results of the inquiry by the Government Accountability Office are evidence of still-imperfect work by specialists intended to assist new insurance customers as well as government contractors hired to verify that coverage and subsidies are legitimate. The GAO also pointed to flaws that linger in the marketplace’s Web site, HealthCare.gov. According to testimony to be delivered before a House Ways and Means subcommittee, undercover GAO investigators tried to obtain health plans for a dozen fictitious applicants online or by phone, using invalid or missing Social Security numbers or inaccurate citizenship information. All but one of the fake applicants ended up getting subsidized coverage — and have kept it. In one instance, an application was denied but then approved on a second try. In six other attempts to sign up fake applicants via in-person assisters, just one assister accurately told an investigator that the applicant’s income was too high for a subsidy. In their testimony, GAO officials plan to emphasize that the findings are preliminary and that they are continuing the investigation before reaching final conclusions, probably next year. The tests have been done in several states. Because the work is not finished, the GAO is not identifying the states. House Republicans were eager for early information because the findings reinforce their contention that the Obama administration set up the health insurance marketplace in ways that leave it vulnerable to fraud and waste of taxpayer money. The allegation that HealthCare.gov does not properly verify the identity and eligibility of consumers has been one of several lines of attack that congressional Republicans have used in trying to discredit the 2010 Affordable Care Act and the way administration officials set it in motion. The GAO investigation was requested before the marketplace opened in the fall, by House Ways and Means Chairman Dave Camp (R-Mich.); Rep. Charles W. Boustany Jr. (R-La.), chairman of the Ways and Means oversight subcommittee; and Sens. Tom Coburn (R-Okla.) and Orrin G. Hatch (R-Utah). Even before the GAO delivered the early findings, the lawmakers were seizing them as fresh ammunition. “We are seeing a trend with Obamacare information systems: under every rock, there is incompetence, waste and the potential for fraud,” Camp said in a statement. “Now, we learn that in many cases, the exchange is unable to screen out fake identities or documents.” A spokesman for the federal agency that oversees the marketplace, the Department of Health and Human Services’ Centers for Medicare and Medicaid Services, noted that the procedures for ensuring that the applicants’ information is accurate remain a work in progress. “We . . . will work with GAO to identify additional strategies to strengthen our verification processes during this first year of the Affordable Care Act,” CMS spokesman Aaron Albright said. The GAO’s account of fictitious applicants obtaining subsidized coverage goes beyond a related problem that surfaced this spring and that the investigators also cited: The government may be paying incorrect insurance subsidies to a significant share of the 5.4 million Americans who signed up for health plans for this year through the federal marketplace. The GAO testimony contains updates on that problem, saying that, as of mid-July, about 2.6 million “inconsistencies” existed among applicants who had chosen a health plan and that 650,000 of them had been resolved. Related stories: Circuit appeals courts split on health-law subsidies Contraception ruling is a symbolic blow for ACA Understanding the Affordable Care Act Your Obamacare questions, answered

DOJ announces charges against 400 people for $1.3 billion in health-care fraud

More than 400 people across the country have been charged with participating in health care fraud scams totaling about $1.3 billion in false billings, including for the prescription and distribution of opioids. In what federal officials Thursday called the “largest ever health care fraud enforcement action” by the Medicare Fraud Strike Force, 412 individuals, including 115 doctors, nurses and other licensed medical professionals, were arrested in a nationwide operation that involved more than 1,000 law enforcement agents in at least 30 states.  Sessions said the operation began with tips from people in the affected communities and from “very sophisticated computer programs that identify outliers.” The investigation particularly focused on medical professionals who were involved in the unlawful distribution of opioids and other prescription narcotics, officials said. The abuse of pharmaceutical opioids is widely blamed for a medical crisis involving tens of thousands of overdoses on heroin and fentanyl. “Last year, an estimated 59,000 people died from a drug overdose…opioids play an enormous role in that total number,” said Chuck Rosenberg, acting administrator of the Drug Enforcement Administration. “This is an epidemic.” Approximately 91 Americans die every day of an opioid related overdose, according to the Centers for Disease Control and Prevention. Among the 412 defendants, 120 were charged with opioid-related crimes. Six of the doctors were charged with operating a scheme in Michigan to prescribe unnecessary opioids, some of which were then sold on the street. The doctors allegedly billed Medicare for $164 million in fraudulent claims, according to federal officials. A clinic in Houston allegedly gave out prescriptions for cash. Officials said one doctor at the clinic provided 12,000 opioid prescriptions for over two million illegal painkiller doses. And a rehab facility for drug addicts in Palm Beach, Fla., that is alleged to have recruited addicts with gift cards, drugs and visits to strip clubs, billed the government for over $58 million in false treatments and tests. “Narcotics officers have arrested schoolteachers, doctors, nurses and fellow law enforcement personnel,” said acting FBI Director Andrew McCabe. “Many who succumb to the lure of the opioid high are kids…In some cases, we had addicts packed into standing-room only waiting rooms, waiting for those prescriptions.” McCabe said that some doctors wrote out more prescriptions for controlled substances in one month than entire hospitals were writing.   “Health care fraud is a reprehensible crime,” said Health and Human Services Inspector General Daniel Levinson. “It not only represents a theft from taxpayers who fund these vital programs, but impacts the millions of Americans who rely on Medicare and Medicaid.”

L.A. doctor allegedly let untrained assistant perform (and botch) surgeries as part of massive insurance scam

A Los Angeles orthopedic surgeon and 14 of his associates were indicted Tuesday for allegedly operating an insurance fraud that netted them $150 million. Prosecutors called the charges against the operators of Frontline Medical Associates the largest and most elaborate such scheme in California’s history. The doctor and various associates obtained patients by paying kickbacks to marketers and to a workers compensation attorney. They allegedly operated their own MRI business out of a trailer, occasionally altering the results of the MRIs in order to justify surgery. The group also ran its own pharmacy, exclusively for the practice’s patients, which allegedly over prescribed and over billed insurance companies for pharmaceuticals. One doctor in the practice who was indicted allegedly billed insurance companies for office visits for which he was not present. But the “most serious charges,” according to Los Angeles County District Attorney Jackie Lacey, involved the surgeries themselves. The chief doctor in the practice, Munir Uwaydah, and his staff allegedly deceived “nearly two dozen patients into having surgeries thinking they would be done by Uwaydah. In fact, the surgical procedures were performed by a physician’s assistant who never attended medical school,” said a news release from the D.A.    *[WSU]: Wayne State University   *[Tue]: Tuesday   *[Wed]: Wednesday   *[UNM]: University of New Mexico The assistant “operated on patients while they were under general anesthesia and without Uwaydah present in the operating room,” according to the release and the indictment. “All 21 patients sustained lasting scars and many required additional surgeries and suffered physical and psychological trauma” as a result of what they went through. Most of the names of the victimized patients listed in the indictment were Hispanic. A five-year investigation produced two indictments, one of 57 counts against Uwaydah and alleged co-conspirators charged with insurance fraud and aggravated mayhem, among other things.    *[WSU]: Wayne State University   *[Tue]: Tuesday   *[Wed]: Wednesday   *[UNM]: University of New Mexico In another 75-count indictment, Uwaydah’s personal lawyer and three others were charged with conspiracy to commit insurance fraud, money laundering, illegal patient referrals and filing false tax returns. Uwaydah was arrested in Germany and is awaiting extradition to the U.S., according to officials. Eleven of those charged have entered not guilty pleas. Uwaydah, who could not be located for comment, has yet to comment. According to the Los Angeles Times, Uwaydah was placed on probation for two years by California’s Medical Board for failing to document patient exams and gross negligence while practicing at Tustin Hospital and Medical Center. In 2013, according to the paper, the Medical Board canceled his license, citing prolonged absence from California.    *[WSU]: Wayne State University   *[Tue]: Tuesday   *[Wed]: Wednesday   *[UNM]: University of New Mexico

Watchdog: Some Medicare spending on HIV drugs appear questionable in 2012 audit

Medicare spent more than $30 million in 2012 on questionable HIV medication costs, the inspector general of the Department of Health and Human Services said in a report set for release Wednesday. The report offers a litany of possible fraud schemes, all paid for by Medicare’s prescription drug program known as Part D. Among the most egregious: In Detroit, a 77-year-old woman purportedly filled $33,500 worth of prescriptions for 10 different HIV medications. But there’s no record that she had HIV or that she had visited the doctors who wrote the scripts. A 48-year-old in Miami went to 28 pharmacies to pick up HIV drugs worth nearly $200,000, almost 10 times what average patients get in a year. The prescriptions were supposedly written by 16 health providers. And on a single day, a third patient received $17,500 worth of HIV drugs — and none the rest of the year. She acquired more than twice the recommended dose of five HIV drug ingredients. The report raises new questions about Medicare’s stewardship of Part D. A ProPublica series last year showed that Medicare’s lax oversight has enabled doctors to prescribe massive quantities of inappropriate medications, wasted billions on needlessly expensive drugs and exposed the program to rampant fraud. Part D cost taxpayers about $65 billion in 2013. Previous inspector general reports have criticized the way Medicare oversees doctors and pharmacies, but this one focuses on patients and potential fraud and abuse. The inspector general flagged 1,578 Medicare beneficiaries who received HIV medications worth $32 million in 2012. (This figure does not include beneficiaries who, based on their records, appeared to be taking the drug Truvada, which reduces the risk of HIV infection.) More than half the patients identified by the inspector general had no diagnosis of HIV, had no records of laboratory tests to monitor the use of the drugs, and had not received any medical services from any of the prescribers. Two pharmacies, both in Miami, dispensed drugs to 321 of these beneficiaries. Most of them were women with an average age of 74, two decades older than the typical patient who received HIV drugs in Medicare. These two pharmacies collected more than $350,000 for the drugs, the inspector general reported. “While some of this utilization may be legitimate, all of these patterns warrant further scrutiny,” the report says. “These patterns may indicate that a beneficiary is receiving inappropriate drugs and diverting them for sale on the black market. They may also indicate that a pharmacy is billing for drugs that a beneficiary never received or that a beneficiary’s identification number was stolen.” The inspector general’s analysis did not say if beneficiaries were complicit in the questionable activity or if their IDs had been used without their knowledge. Medicare places a premium on getting patients their medications in a timely way, particularly for conditions such as HIV. It considers HIV drugs a “protected class.” Insurance companies paid to administer Part D for the government must cover them without exception. Insurers are freer, however, to manage other drugs, and can impose restrictions to control spending, prevent overuse and spot fraud. The unscrupulous have tried to exploit the special status of HIV drugs, leading to a number of recent prosecutions against pharmacy owners and others. Sometimes pharmacies bill for the drugs, do not dispense them, and then bill Medicare or private insurers for them again. Beneficiaries may be misusing the HIV drugs, too; the inspector general noted that some medications have psychoactive effects or enhance the effects of painkillers. The amount of suspicious activity involving HIV drugs is small relative to the overall usage of such medications. Medicare paid $2.8 billion to supply HIV drugs to 135,500 beneficiaries in 2012. Fully 38 percent of beneficiaries with questionable utilization patterns lived in Miami or New York, a rate three times the percent of patients receiving HIV drugs who live in those cities. One 37-year-old in Miami received $146,160 in HIV drugs in 2012. He received 16 different HIV medications in a single month. “Several times during the year, he received these drugs from two different pharmacies on the same day,” the report says. The inspector general recommended that the Centers for Medicare and Medicaid Services take steps to rein in fraud and abuse of HIV drugs, including using prescription data to look for aberrant behavior among beneficiaries. The report says health plans should be required to conduct reviews looking for unusual patterns of HIV medication use. It also encourages Medicare to expand the ability of health insurers to put controls in place and restrict certain beneficiaries to a limited number of pharmacies or prescribers. CMS generally agreed with the recommendations and said it would be open to Congress taking steps to limit the number of pharmacies or prescribers for beneficiaries who appear to be abusing drugs or engaging in fraud.

Medicare changes must be implemented now

MARILYN TAVENNERhas been administrator of Medicare and Medicaid officially for only about a month, but already she faces a policy challenge from Congress. A majority of the House, 145 Republicans and 82 Democrats, wrote to Ms. Tavenner on Wednesday, asking her to delay implementation of a Medicare cost-reduction initiative, scheduled to take full effect July 1, for six months. They complain that procedural irregularities threaten patient access to wheelchairs, oxygen tanks, beds and diabetes test strips — known in Medicare parlance as “durable medical equipment, prosthetics, orthotics and supplies,” or DMEPOS for short. In fact, these concerns are overblown. Ms. Tavenner should not postpone these overdue reforms to Medicare’s DMEPOS program. Excessive DMEPOS reimbursements have plagued Medicare for years. As documented by executive and legislative watchdog agencies, Medicare routinely paid several times the retail price for items from power chairs to hand braces. Partly, the problem was corruption: lax federal screening of suppliers let swindlers into the business. More fundamentally, the issue was that Congress drew up the DMEPOS reimbursement schedule in 1989, and then left it almost unchanged thereafter, despite intervening cost reductions for many products. Between 2000 and 2010, Medicare spent $69.4 billion on outdated — and inflated — DMEPOS reimbursement rates. The remedy is to make DMEPOS suppliers compete on price; pilot programs have demonstrated that competitive bidding saves hundreds of millions of dollars with no harm to patient care, which is why competitive bidding is about to go into effect on a near-nationwide basis July 1 — as authorized under the Affordable Care Act and earlier law. Projected savings for taxpayers and beneficiaries over the next 10 years: $42.8 billion. Firms that benefit from the status quo — and they’re in congressional districts across the country — have fought reform every step of the way. The letter to Ms. Tavenner reflects more such lobbying. Its core allegation is that some companies that won the contracts, which take effect on July 1, lack the requisite state business license. In Tennessee, for example, 30 out-of-state suppliers licensed in their home jurisdictions turned out not to have Tennessee licenses and had their winning bids disqualified. In Maryland, more than 100 bidders aren’t state-licensed, according to the Wall Street Journal. Purportedly, the unlicensed participants artificially depressed winning bids, and their subsequent disqualification will leave the market undersupplied. Medicare officials argue persuasively that the remaining suppliers can meet demand while the government decides whether additional bids are necessary. As for the alleged price distortion, an ironic complaint, given the previous artificial inflation: There is no evidence it’s widespread enough to warrant a national delay. And there’s more irony, one might even say hypocrisy. Democratic signatories of the letter are questioning a key part of President Obama’s health-care law, for which most of them voted. The Republicans, many of them tea party backbenchers, are resisting a market-based alternative to government price-setting. Their proposed delay could add to the federal deficit. And their argument hinges on the alleged failure of private businesses to satisfy bureaucratic rules and regulations. Ms. Tavenner should tell all of them “no.” **Read more about this issue:** Tom Daschle and Bill Frist: The health-care leader we need Charles Lane: Medicare reform’s slow progress The Post’s View: Repairs to Medicare The Post’s View: Welcome discolsure about Medicare payments Robert J. Samuelson: Taming the health-care monster

Federal jury convicts Md. couple in $80 million D.C. Medicaid fraud case

A federal jury on Thursday convicted a Bowie, Md., couple of orchestrating a multi-year campaign to defraud D.C. Medicaid of more than $80 million between 2009 and 2014, the largest local health-care fraud scheme ever prosecuted in the city. After a four-week trial in federal district court in the District, the jury deliberated two days before convicting Florence Bikundi, 52, of four counts of health-care and Medicaid fraud and conspiracy, and her husband, Michael D. Bikundi Sr., 63, of two counts of fraud and conspiracy through her company, Global Health Care Services of the District. Jurors found the couple guilty of eight counts of money laundering and conspiracy through the District-based home health-care firm, and acquitted them of three others. U.S. District Judge Beryl A. Howell set sentencing for Feb. 26. The Bikundis, originally from Cameroon, face up to decades in prison, and potentially deportation, although their attorneys are expected to seek less time. A spokesman for the U.S. attorney for the District, Channing D. Phillips, declined to comment on the verdict because of a proceeding set for Monday. In that hearing, the government has indicated that it will ask jurors to order the Bikundis to forfeit $11 million in seized cash, five luxury cars and their home. Jurors were ordered by the judge not to speak about the trial pending the forfeiture hearing. In closing arguments, Assistant U.S. Attorney Lionel A. André said that the Bikundis used Global Health Care Services as a simple yet massive “get-rich-quick scheme” that enlisted trusted relatives and others to sign up and coach Medicaid recipients who received kickbacks for submitting fraudulent claims for health care that never was provided. “They used Global as a vehicle to take D.C. Medicaid for a ride, and to bilk them of millions and millions and millions of dollars,” André said. “This was Florence and Michael Bikundi’s money train,” he said. She was the “engineer and driver,” and he was “the conductor” who decided who would get paid and when subordinates would be cut out, André said. Howell allowed Michael Bikundi to remain free to care for the couple’s 4-year-old twins while his wife remains incarcerated. Michael Bikundi left the courtroom without commenting. Stephen R. Kiersch, Michael Bikundi’s attorney, said he could not comment until the trial ended. Florence Bikundi’s attorney, William R. “Billy” Martin, said: “I am very disappointed in the jury’s verdict. Mrs. Bikundi and Global were also victims of the employees the government used to testify against Mrs. Bikundi.” Martin told jurors that the government’s evidence did not prove wrongdoing beyond a reasonable doubt, disputing that it was her name or signature on key documents and that if there were invalid payments made, it was because the company was initially overwhelmed by the paperwork required by regulators. In announcing the Bikundis’ arrest in February 2014, then-U.S. Attorney Ronald C. Machen Jr. said authorities had undertaken the largest health-care fraud crackdown in the District’s history, bringing charges against 25 people in separate and even competing schemes. Machen said prosecutors found that Medicaid fraud was “at epidemic levels” in the city, singling out corrupt operators of home-care agencies and personal-care assistants. Between 2006 and 2013, Machen charged, the number of Medicaid beneficiaries billing the government for personal-care services quadruped, from 2,500 to 10,000, while the amount billed grew sevenfold, from $40 million to $280 million. In the year ending this past September, D.C. Medicaid — a joint federal and D.C. program that provides health care for poor and disabled people — was projected to make about $2.8 billion in payments in total to health-care providers for 225,000 enrollees, or about 1 in 3 city residents. The Bikundis were paid about $80 million under the program between August 2009 and February 2014, or a fraction of 1 percent of the total program payments over that time. But U.S. prosecutors alleged — and the jury found — that none of it should have been awarded, because Florence Bikundi should have been excluded from being a Medicaid provider because of a 1999 revocation of her nursing license under her maiden name in Virginia. After decades as a couple, the Bikundis married in 2009 and launched Global under her married name, allegedly hiding her past and forging her signatures on documents. It is unclear how many services were legitimately delivered. Prosecutors entered evidence that claims totaling $30 million through Global for services over a period of two years abruptly dropped to zero after authorities executed a search warrant on the Bikundis.

4 Md. residents convicted of scamming victims out of millions

There were promises of romantic rendezvous and sob stories about mounting hospital bills or tanking foreign businesses. The stories were slightly different, but the endgame was the same: to get the person on the other end of the phone call, text or email to send cash, and lots of it. The four behind the elaborate series of ruses made off with millions before they were finally caught, authorities said. Earlier this month, they were found guilty of conspiracy to commit wire fraud and money laundering connected with schemes that involved messaging “vulnerable” people to develop romantic relationships before talking them into wiring money. A jury convicted three men and one woman in the scam after a 17-day trial in federal court in Greenbelt: Gbenga Benson Ogundele, 58; Victor Oyewumi Oloyede, 42; Babtunde Emmanuel Popoola, 34; and Mojisola Tinuola Popoola, 42. All are from the Laurel or Bowie area in Maryland. “Witnesses testified that members of the conspiracy used false stories and promises to convince the victims to provide money to the conspirators, including fake hospital bills, plane trips to visit the victims, problems with overseas businesses and foreign taxes,” according to a statement from the office of Maryland U.S. Attorney Rod J. Rosenstein. “Ogundele, Oloyede and Popoolas and other conspirators opened bank accounts, called ‘drop accounts,’ in order to receive millions of dollars from the victims.” Victims would send anywhere from $1,720 to $50,000 directly into drop accounts or via check, the government said. The group then moved the money around or wrote checks to others in an attempt to hide where the funds came from, prosecutors said. The defendants are scheduled to be sentenced early next year and face as much as 20 years in prison.

Fraud concerns grow as spending on handmade ‘compounded’ drugs soars

Government spending has skyrocketed on “compounded” drugs that retail pharmacists custom make, drawing federal investigators’ attention for potential fraud and overbilling. Spending on these medications in Medicare’s Part D program rose 56 percent last year, with topical creams and gels, among the costliest products, now priced at hundreds or thousands of dollars per tube. And over just four years, the federal workers’ compensation program saw its spending on compounded medications spike from $2.35 million to $214 million. The increases, along with a sharp jump in the number of patients getting compounded drugs, “may indicate an emerging fraud trend,” said Miriam Anderson, who helped oversee a June report on Medicare spending by the inspector general at the Health and Human Services Department. Some prescriptions may not have been medically necessary and others not even dispensed, according to the report. The practice of compounding, which is done by mixing drugs in pharmacies or special compounding centers, is as old as the pharmacy profession itself. The specifically tailored medications are aimed at patients who cannot take commercially prepared treatments. Patients who cannot swallow pills can get liquid formulations, for example, or those allergic to certain dyes can get products made without them. But use among Medicare beneficiaries and federal employees in workers’ comp insurance plans has recently soared, according to Anderson’s report and a separate Postal Service inspector general’s study released in March. Similar run-ups in use and spending also have been noted by private-sector benefit managers. In the Part D drug program, the number of beneficiaries getting compounded drugs has grown 281 percent since 2006 to nearly 280,000 in 2015. Spending on such drugs reached $509 million — up 625 percent since 2006, the HHS inspector general report noted, although that amount remained a tiny fraction of the Part D’s total drug spending. Topical creams and gels, which are often used for pain, are among the fastest-growing category of compounded drugs. Part D spending on those rose 3,466 percent over the decade; the average cost per prescription hit $331, up from $40 in 2006. New rules from the Labor Department went into effect July 1, aimed at slowing spending increases for the federal workers’ comp program. Among other changes, the agency will limit initial prescriptions to 90 days. While legitimately prescribed compounded drugs “can dramatically improve a patient’s quality of life,” it is important to have “proper controls around billing,” John Voliva, executive vice president of the International Academy of Compounding Pharmacists, said Monday in a statement. The HHS inspector general’s report demonstrated that such controls “are not in place,” he said. The scrutiny itself has been increasing since a 2012 meningitis outbreak linked to a Massachusetts compounding pharmacy that sold tainted injectable medications. Sixty-four people died. In the wake of that case, some states tightened their oversight of the industry, particularly of pharmacies making products that must be sterile. Those drugs are not considered approved by the Food and Drug Administration, although the agency does get involved when it is concerned that a site might not be making medications properly or has started to mass-produce treatments rather than preparing them for individual patients. At times, compounded drugs can be more cost-effective. When Turing Pharmaceuticals last year raised the price of a drug used for patients with compromised immune systems from $13.50 a pill to $750, Express Scripts, one of the nation’s largest pharmacy benefit managers, partnered with a compounding pharmacy to produce its own version for $1 a pill. “Some compounding we should be happy for,” said Glen Stettin, senior vice president for clinical, research and new solutions at Express Scripts. Still, sharp increases in spending prompted Express Scripts to crack down on what pharmacy-made products it will cover — which cut about 1,000 ingredients from the list. The company has since seen its clients’ spending on pharmacy-made drugs fall sharply. It also has been targeted by two antitrust lawsuits filed by compounding pharmacies in federal court. Nationally since 2012, pharmacies have been required to report all ingredients they use to make a compounded drug. The idea was to provide insurers with more information about what they were being billed for and ensure there were no hidden elements. The effect on drug prices is up for debate. Stettin and others said a few unscrupulous pharmacies began adding more ingredients so they could charge more. “They are [creating] combinations of things that have never been tested together,” he said. “We saw a diaper cream that was billed at $1,000, where a patient could get one over the counter for $2.50.” In California, federal investigators say a marketer for one pharmacy paid doctors to write prescriptions for compounded pain creams formulated to include a “five-pack” of the most expensive ingredients. Then the pharmacy could bill the state worker’s compensation program $3,000 per tube for creams that cost about $20 to make, according to a federal indictment filed in June. Also last month, federal prosecutors in Florida unsealed an indictment against a doctor who allegedly was given kickbacks — including a $72,000 BMW — for sending prescriptions to a particular pharmacy, which then billed Medicare, the military program Tricare and other government health programs for compounded creams. Prices ranged from about $900 to $21,000 for a one-month supply, according to court documents. Medicare has not detailed the actions it might take. The HHS inspector general’s report does not make any recommendations, although investigators expect to issue a follow-up report that will.

‘Death doctor’ who profited from unnecessary chemotherapy for fake cancers could resume practice in 5 years

Speaking with a lisp, Robert Sobieray told Michigan state legislators on Tuesday he lost all but two teeth after a 24-month chemotherapy treatment for a cancer he didn’t have.      The Michigan state house health policy committee approved the proposal to tighten the rules. Next it will go before the full house for a vote.    This is how the scam worked: Fata filed claims for services that weren’t medically necessary, then referred those patients to home health care and hospice providers in exchange for kickbacks.   In the complaint, an employee also describes one case where a patient came to see Fata after falling and hitting his head. Fata directed an employee to give him chemotherapy before taking him to the emergency room. The patient later died from his head injury. In a similar instance, Fata directed chemotherapy be administered to two patients who had other serious medical conditions before he would send them to the hospital to treat their real illness. He also prescribed chemo for cancer patients in remission and diagnosed people with anemia and fatigue to justify unnecessary blood treatments. When patients questioned their treatment or seemed uneasy about it, Fata prescribed Xanax. How did he get away with it for so long? Instead of raising suspicion by sending patients to outside pharmacists and practitioners, Fata did as much as possible in-house. He owned his own medical diagnostics company and PET scan machine. Fata usually diagnosed people with blood cancers, one employee said, because it was easier to falsify than a tumor diagnosis, the complaint said.

Justice Dept. recovers record $5 billion under False Claims Act

The Justice Department’s civil division recovered a record $5 billion in the past fiscal year from companies that defrauded taxpayers, with much of the abuse occurring in the health-care and mortgage industries. The department pursued settlements and judgments under the False Claims Act, which Acting Associate Attorney General Tony West described Tuesday as “quite simply, the most powerful tool we have to deter and redress fraud.” “Vigorous enforcement of the act allows us to protect not only taxpayer dollars but also the integrity of important government programs on which so many Americans rely,” West said. The amount of money recovered in 2012 is up from $3.2 billion last year, and two-thirds of it was secured through the act’s whistleblower provisions. “Many of these cases would not be possible without the whistleblowers . . . who have come forward to report fraud, often at great personal risk,” said Stuart Delery, the principal deputy assistant attorney general for the civil division. Among the major settlements was a payment of $1.5 billion by the pharmaceutical giant GlaxoSmithKline to resolve allegations that it promoted drugs for uses not approved by the Food and Drug Administration and paid kickbacks to physicians to prescribe the drugs, department officials said. The settlement, the largest health-care fraud case pursued by the department, also included nearly another $1.5 billion in criminal and Medicaid recoveries. A $25 billion settlement with the country’s five largest mortgage lenders included $900 million under the False Claims Act. Delery said the department continued to pursue investigations in the mortgage industry.

His job was detecting counterfeit bills. He pleaded guilty to stealing real money.

Shaun Qureshi’s federal job was to examine suspicious currency and determine whether it was counterfeit. The bills came in from banks, shops and other institutions that thought there might be something awry, and contacted law enforcement. The government would take the fakes out of circulation. And Qureshi was supposed to return the real bucks to whomever had flagged them for inspection. But for more than a year, Qureshi kept some of the authentic money for himself, court files show. The Maryland resident who began working for the Secret Service’s Washington field office in 2009 as a “counterfeit technician” started small. Prosecutors said that nearly every day over 22 months, he pilfered between $20 and $200 from the bills he was reviewing on his job, accumulating at least $8,000 from January 2013 through October 2014. He tripped himself up when he inadvertently included some counterfeit $100s during one of his cash deposits to his personal bank account, according to court records. Qureshi, 34, pleaded guilty Friday in U.S. District Court in the District of Columbia to one felony charge of illegal conversion of property. He faces sentencing in October. Glenn F. Ivey, his attorney and former state’s attorney for Prince George’s County, declined to comment on the case when reached Monday. Qureshi did not return calls to his home. He no longer works with the Secret Service, but the agency declined to say when he left. Authorities said in court files that Qureshi wasn’t caught early because businesses that turned over suspicious bills never expected to get them back if the money turned out to be real. And at the time, the Secret Service did not record the bills coming in, prosecutors said, leaving Qureshi with “access to genuine [currency] that were not tracked or documented.” Qureshi’s sloppiness exposed him, according to court files. He was caught in October 2014, after making seven cash deposits over several days to County First Bank in LaPlata, Md., that consisted of 13 $100 bills and one $50 bill. County First Bank determined that five of the $100 bills Qureshi had deposited were counterfeit, court documents show. Apparently, the court papers say, Qureshi “failed to inspect the [currency] closer to determine their authenticity.” His plea agreement requests the judge impose a sentence of six months probation, including three months of home detention when he appears in court Oct. 29. He also agreed to pay restitution of $8,000. The maximum penalty is 10 years in prison and a $250,000 fine. **Read more:** D.C. police shred illegal dirts bikes and ATVs seized from streets How much is being stuck 7 stories high atop a roller coaster for 5 hours worth? MS-13 gang member narrated video of teen’s killing, FBI agent testifies

Former D.C. Department of Human Services worker pleads guilty to scheme

A former D.C. social services worker pleaded guilty Friday to participating in a more than two-year scheme to bilk the city government out of about $800,000 in public benefits. Aretha Holland-Jackson, 45, admitted in federal court that she used her access to the Department of Human Services’ computer system to set up public assistance for nearly two dozen phony beneficiaries. Using fake names and Social Security numbers, Holland-Jackson obtained government ID cards that she and others used to withdraw food stamps, cash and other public benefits from ATMs, according to prosecutors. Allison Holland, Holland-Jackson’s 47-year-old sister, also admitted involvement in the scheme. Prosecutors said Holland, of Cheltenham, used three of the fake cards, then saved cash for her sister in a shoebox. The scheme, which lasted from February 2011 to September 2013, cost the D.C. government at least $783,876 in public benefits mostly intended for low-income families, according to the U.S. attorney’s office. “This prosecution shows how committed we are to aggressively pursuing government employees who think they can get away with robbing taxpayers of their hard-earned money,” U.S. Attorney Ronald C. Machen Jr. said in a statement. U.S. District Judge Amy Berman Jackson set a sentencing date of May 7 for the sisters, who each pleaded guilty to conspiracy to commit wire fraud. Holland- Jackson likely faces a sentence of 33 to 41 months in prison, while Holland is expect to receive a sentence of 15 to 31 months in prison, authorities said. After the hearing, Michael Lasley, Holland-Jackson’s attorney, said his client was “hooked into the situation” by an unnamed co-conspirator who died last March. Lasley described the co-conspirator as a family friend who provided Holland-Jackson with prescription pills and devised the false identities that she later processed in her capacity at the department. “What happened, more than anything else, is he developed a scheme, and she went along with it,” Lasley said. Holland-Jackson was arrested in September after using one of the debit cards to withdraw about $700 from an ATM on H Street NE, authorities said. She was in possession of eight cards at the time. Holland-Jackson was fired the next day, said DHS spokeswoman Dora Taylor. Court papers say Holland-Jackson had worked as a social services representative in the department’s Office of Medical Assistance since February 2005. Authorities began to investigate after the department received a tip last year that mail had been sent to a fake beneficiary, said Christa Phillips, DHS’s chief accountability officer. A DHS employee could not find any record of the beneficiary, setting off a fraud investigation that eventually involved federal prosecutors and D.C. police. Phillips said the discovery was made possible by “new systems that detect fraud a lot sooner” within the department. “That’s why the staff was doing their due diligence,” she said. The case against Holland-Jackson originated in D.C. Superior Court. Machen’s office chose to pursue the case as a federal conspiracy involving Holland-Jackson and her sister. As part of her plea agreement, the charges against Holland-Jackson in D.C. Superior Court were dismissed. Get updates on your area delivered via e-mail

Texas doctor charged in $375 million Medicare scam

A Texas doctor and five owners of home health-care agencies were arrested Tuesday on charges that they fraudulently billed Medicare and Medicaid nearly $375 million in what authorities described as the largest case of its kind. The doctor, Jacques Roy, 54, of Rockwall, was charged with masterminding a Medicare fraud conspiracy over the past six years. The alleged fraud involved classifying as homebound 11,000 patients recruited by a network of more than 500 agencies, then billing Medicare for services and home visits that were either not medically necessary or were not provided, according to the indictment, filed in the Northern District of Texas. Roy’s alleged scheme resulted in more than $350 million being fraudulently billed to Medicare and more than $24 million to Medicaid. The indictment called it the largest home health-care fraud ever committed and the biggest health-care fraud case brought against a single doctor. “Dr. Roy and his co-conspirators for years ran a well-oiled fraudulent enterprise . . . making millions by recruiting thousands of patients for unnecessary services and billing Medicare for those services,” said Lanny Breuer, assistant attorney general for the Justice Department’s criminal division. Tuesday’s indictment marks the latest in a series of federal Medicare fraud cases, which have become a centerpiece of the Obama administration’s push to bring down health-care costs. In 2011, health-care-fraud prevention and enforcement efforts recovered nearly $4.1 billion that had been stolen or improperly taken from federal programs, the highest annual amount ever recovered, according to a recent report by the Departments of Justice and Health and Human Services. “We are demonstrating to those who would commit health-care fraud that it won’t be worth it,” said Deputy Attorney General James Cole. “If you do this, we will track you down and prosecute you.” Investigators from the Department of Health and Human Services targeted Roy after analyzing Medicare billing data and finding a disproportionate number of home health claims for which he was the certifying physician. Between January 2006 and November 2011, authorities say, Roy and his company, Medistat Group Associates, created a fraudulent “cottage industry” in the Dallas-Fort Worth area that brought in millions of dollars, according to court records. Roy certified more Medicare beneficiaries for home health services and had more purported patients than any other medical practice in the country. “Using sophisticated data analysis, we can now target suspicious billing spikes,” said Health and Human Services Inspector General Daniel R. Levinson. The analysis found that in 2010, Roy “certified” more than 5,000 patients for home health care; 99 percent of physicians certified no more than 104 people for such care, Levinson said. As part of his business, Roy allegedly maintained a “485 Department,” named after the number on the Medicare form on which the care plans were documented. He instructed his employees to complete the 485s by signing his name by hand or using his electronic signature. In what prosecutors called a “boiler room,” employees worked all day placing his signature on approvals for home health services, according to the indictment. When investigators searched Roy’s home, they found evidence of overseas bank accounts and fake identification cards. Also in his house were the books “Hide Your Assets and Disappear: A Step-by-Step Guide to Vanishing Without a Trace,” and “The Offshore Money Manual,” suggesting 23 worldwide locations favorable to offshore banking, according to court records. The documents also show that Roy owns a sailboat named “One Trick Pony.” Roy, a native of Canada, is charged with one count of conspiracy to commit health-care fraud and nine counts of substantive health-care fraud. If convicted, he could be sentenced to a maximum of life in prison. Along with the indictment, the Centers for Medicare and Medicaid Services announced the suspension of payments to an additional 78 home health agencies associated with Roy, based on credible allegations of fraud against them. Roy’s office manager was also charged. Owners of the agencies working with Roy would recruit people so Medistat could bill unnecessary home visits and medical services, the indictment said. They would go door to door in neighborhoods to recruit patients. The home health agencies not only allegedly took advantage of the elderly, they preyed on the disadvantaged, authorities say. One of the agency owners who was charged, Charity Eleda, 51, of Rowlett, Tex., allegedly sent recruiters to the Bridge homeless shelter in Dallas, paying them $50 for each person they signed up. “This case and our new detection tools are examples of our growing ability to stop Medicare fraud,” said Deputy Health and Human Services Secretary Bill Corr. Staff researcher Julie Tate contributed to this report.

FBI still looking for fugitive attorney who orchestrated $600 million government fraud

LOUISVILLE — Eric Conn, the fugitive attorney who pleaded guilty to orchestrating a scheme to defraud the federal government of $600 million, remains at large since he cut off his court-ordered GPS monitoring bracelet on June 2 and ditched it by a highway, and the FBI on Friday said he is likely still in the United States.   “We consider cases like this to be an act of desperation,” FBI Special Agent in Charge Amy Hess said during a news conference here Friday. “So we urge the public to use all caution.” Authorities noted that Conn does not have a history of violence. State and federal agencies this week executed a search warrant on Conn’s mother’s house, her vehicle, and Conn’s former law practice, which is a compound of five connected mobile homes fronted by reproductions of the Statue of Liberty and the Lincoln Memorial in Stanville. From 2006 to 2016, Conn processed 1,700 client applications for Social Security benefits with a potential of $550 million in lifetime benefits. Since the revelation of the allegations, the Social Security Administration has contacted many of Conn’s former clients with claims they owe as much as $100,000 for disability payments going back 10 years unless they can prove they have been disabled the entire time, according to Shannon Fauver, an attorney who now represents 18 of Conn’s former clients. “To go back and prove that you are disabled 10 years later, after Conn destroyed all the medical records, is almost impossible,” Fauver said, citing media reports of a three-day bonfire at Conn’s office when documents were allegedly destroyed. Some of Fauver’s clients have kept their disability, some have lost it, and others are still having their cases adjudicated in eastern Kentucky and West Virginia. Seven of Conn’s former clients have killed themselves, Fauver said. “There have been no allegations that his clients did anything wrong, and they are the ones that are suffering for what he did,” Fauver said, noting that Conn was “taking advantage of all these people.” Conn’s fraud scheme was fueled by television advertisements that included a 3-D television ad from 2010 and one from 2009 in which Conn hired YouTube star “Obama Girl” and Bluegrass music legend Ralph Stanley to sing a version of “Man of Constant Sorrows” with new lyrics that refer to Conn as a “superhero without a cape” and to brag that Conn had “learned Spanish off of a tape.” In a rap video, Conn billed himself as Hispanic-friendly: “Even if you’re Latino, no need to worry cuz this gringo speaks the lingo.” A person representing himself as Conn has emailed at least one reporter following his story, laying out the terms of his potential surrender to the FBI: “That the terms of his surrender be made available for public review and discussion; that the FBI publicly state Conn fled because he found it unfair that others in the case will receive a combined sentence less than his; that the FBI publicly acknowledge Conn has no history of violence and that a caution they issued to members of the public about approaching him was not based on a specific concern; and finally, that the FBI not charge him with additional crimes related to him fleeing.” When asked whether the FBI is negotiating the terms of Conn’s surrender through the media, Hess replied: “I’d be more than happy to discuss that with Mr. Conn upon his surrender.” The FBI also said that Conn “or someone purporting to be Mr. Conn with insider knowledge of his case” has an active social media presence, but wouldn’t say on which social media platform. On Monday, Pikeville psychologist Alfred Adkins was convicted by a jury in federal court in Lexington for his part of Conn’s fraud scheme, and he now faces up to 20 years in prison. Conn had previously agreed to testify against Adkins as part of his plea deal, according to Hess, “until something triggered him to escape.” Next week, the FBI plans to take further action in this case, including possible charges of co-conspirators involved in Conn’s disappearance. “We have been receiving tips,” Hess said. Conn’s attorney, Scott White, told The Washington Post that he is urging his client to turn himself in. “The FBI has certainly increased the need for Eric to surrender immediately to avoid certain consequences of his fleeing,” White said Friday. “For example, if he surrenders immediately then there’s still a chance to avoid a separate fleeing charge and deal with all of this as a bond violation. Also the bigger problem is that he’s scheduled to be sentenced next month. If he’s still at large then, he’ll receive another charge for not appearing in court. And now the FBI is worried about the public safety if they have to apprehend him in a SWAT-type situation. So, everything about this screams out, ‘Eric, turn yourself in.’”

D.C. worker expected to plead guilty to stealing more than $800,000 in public benefits

A former District social services worker intends to plead guilty to stealing more than $800,000 in food stamps, cash and other public assistance, her attorney said Tuesday. Aretha Holland-Jackson, who was responsible for processing public benefits for needy D.C. families, was accused in federal court Tuesday of carrying out the theft by setting up benefits for nearly two dozen fictitious beneficiaries. Holland-Jackson, 45, was initially charged in D.C. Superior Court in the fall. But the office of U.S. Attorney Ronald C. Machen Jr. subsequently decided to bring the case as a federal conspiracy, charging Holland-Jackson and her sister, Allison Holland. At the District’s Department of Human Services, prosecutors said, Holland-Jackson used fake names and Social Security numbers to obtain government identification cards for phony beneficiaries. She had access to the department’s computer system, which allowed her to open new cases and activate benefits. According to court papers, the sisters then used the government debit cards to withdraw cash from multiple accounts and to buy groceries with food stamp benefits. Prosecutors said Holland-Jackson received about $300 in kickbacks per card from another unnamed co-conspirator. Holland-Jackson, of Bowie, is cooperating with prosecutors and has accepted responsibility, according to her attorney, Michael Lasley. He said she got caught up in the scheme after developing an addiction to prescription pills. “It is an aberration on her part. She is trying to address it and move on with her life,” Lasley said. From July 2011 through August 2013, prosecutors allege, Holland-Jackson’s sister withdrew about $8,100 in benefits known as Temporary Assistance for Needy Families, or TANF, to which she was not entitled and used food stamp benefits totaling about $10,400. Holland, 47, of Cheltenham, Md., saved the cash in a shoe box for her sister, court papers say. Holland’s attorney, Nikki Lotze, said that her client also intends to plead guilty and that her participation in the scheme was “very minimal.” “When she got involved in her sister’s scheme, Ms. Holland was undergoing chemotherapy treatment for cancer,” Lotze said in an e-mail. “She very much regrets her involvement and plans to make restitution.” The scheme was uncovered by a fraud investigator at the Department of Human Services who then began working with federal prosecutors and D.C. police. Holland-Jackson, who received a $54,039 salary last year, was arrested in September after using one of the debit cards to withdraw about $700 from an ATM on H Street NE. She was found with eight debit cards. Get updates on your area delivered via e-mail

Former GSA official Neely indicted on five counts of fraud

A former government official at the center of the General Services Administration’s Las Vegas conference scandal faces criminal charges after a federal grand jury indicted him on five counts of fraud Thursday. Prosecutors from the U.S. Attorney’s Office for the Northern District of California said former GSA western regions commissioner Jeffrey E. Neely fraudulently sought reimbursement for personal travel and expenses by submitting false claims. Only two counts relate to the 2010 Las Vegas conference. The others are linked to travel to Long Beach, Calif., Guam and Saipan. The indictment alleges that Neely, 59, of Gardnerville, Nev., also lied when GSA employees questioned him about the spending, saying it was for government business. Details of the lavish Las Vegas conference surfaced in a 2012 inspector general’s report that found Neely had organized a training event costing $800,000 for 300 employees. The Washington Post first reported the watchdog’s findings. Neely had planned for the 2010 employee conference to be “over the top,” the report said. Conference events included a magician and a $75,000 bicycle-building exercise. There were also questionable contracting practices. The GSA placed Neely on administrative leave in April 2012. He left the agency the next month. GSA Administrator Martha Johnson resigned from the government after the scandal emerged in April 2012, and two of her top deputies were fired that month as well. Neely invoked the Fifth Amendment when called to testify before a House oversight committee in April 2012. He also failed to appear at a hearing the next day before the House Transportation and Infrastructure Committee. Neely is scheduled to make his first court appearance on Oct. 20. If convicted, he faces up to five years in prison and a fine of $250,000 for each violation. Former GSA inspector general Brian Miller, whose report uncovered the Las Vegas scandal, said in response to Thursday’s indictment that high-level officials should not abuse the trust and discretion they are given. “Senior executives set an example for everyone in an agency,” Miller said. “If they are cutting corners, fudging facts or cheating even in small things, it sends a message that it’s okay for everyone to do these things.” Joe Davidson and Lisa Rein contributed to this report.

As an Indian tribe fought over casino money, leaders bled its bank accounts, feds say

For 15 years, the Rolling Hills casino has been a money faucet for the Paskenta Band of Nomlaki Indians.   But the sudden bounty also led to a decade of infighting — at one point, literally, with military-grade weapons — among tribal members. And as tribe members fought, a federal indictment filed last week says, the people hired to safeguard the tribe’s wealth bled the tribe’s bank accounts. A family that worked for the tribe was accused last week of embezzling nearly $6 million, according to a federal indictment, using stolen funds to live what a band leader called “a life of obscene luxury.” John Crosby, a former FBI agent who served as the tribe’s economic development director, used tribal money to buy an $838,000 home and fill it with swimming pools, “infinity” spas and a putting green, the indictment says. He chartered a $105,000 flight to Hawaii and a $65,000 trip to Honduras, then spent more than $100,000 on gold coins, all on the tribe’s dime. His 73-year-old mother, Ines, who had worked for the tribe since 1996, spent $55,000 on a trip to New Zealand, $11,000 on jewelry and more than $17,000 on a koi pond. Her sister, Leslie Lohse, paid down her personal credit cards, according to the indictment, and claimed she used the money for travel. “They and their co-conspirators used vicious and callous methods of intimidation and coercion to maintain access to the Tribe’s money, millions of which they stole in order to live a life of obscene luxury, while services to Tribal members went unfunded and Tribe members lived in fear of economic retaliation,” tribal Chairman Andrew Alejandre said in a statement. As the scheme unraveled, the indictment accuses the trio of lying to federal agents, fabricating documents and lying on tax returns to conceal years of theft.  All three suspects started working for the tribe before the casino opened. Because they were so deeply embedded in the tribe’s inner-workings, they were able to punish people who accused them of stealing by taking away their tribe stipends, tribal officials say. “These persons . . . abused and corrupted the Tribe’s institutions of government and terrorized its members,” Alejandre said. The victims included “elders who lived in fear of losing the income that they depended upon to meet basic needs and who, in some cases, had such income taken from them for speaking out, leaving them destitute.”  For the Paskenta tribe, that happened in April 2014.  Around that time, the Paskenta Gaming Commission suspended the license of Jon Pata, a commission member accused of misappropriating more than $2 million. Pata is the brother of Ines Crosby, who was also accused in the scandal. On one occasion, The Post reported, she went to the casino, cashed a check for nearly $200,000 and “walked out with grocery bags full of cash.” That was around the time accusations of John Crosby’s thefts made headlines. Tribe members demanded to know where the $3 million plane was and what happened to the 10 pounds of gold. Freeman hired a group of AR-15-carrying security guards to protect the casino, who squared off with “tribal police” loyal to the other side. Crosby deflected blame about the missing plane and precious metals in a statement to the Bee. He said both were being kept in a safe place and that the accusations would soon be sorted out. A month before making that statement, according to the indictment, Crosby had initiated a cyberattack on the casino in an attempt to destroy evidence.

A roundup of news from the financial world

The U.S. government on Friday announced its second civil fraud lawsuit against Novartis in four days, accusing a unit of the Swiss drugmaker of paying multimillion-dollar kickbacks to doctors in exchange for prescribing its drugs. U.S. Attorney Preet Bharara in Manhattan said the government joined a whistleblower lawsuit filed against Novartis Pharmaceuticals in January 2011 that seeks triple damages under the federal False Claims Act. The government accused Novartis of causing the Medicare and Medicaid programs to pay millions of dollars in reimbursements based on kickback-tainted claims for medication such as hypertension drugs Lotrel and Valturna and diabetes drug Starlix. Twenty-seven states, the District of Columbia and the cities of New York and Chicago also joined as plaintiffs. On Tuesday, the government accused Novartis of inducing pharmacies to switch thousands of kidney transplant patients to its drug Myfortic in exchange for kickbacks disguised as rebates and discounts. Novartis spokeswoman Julie Masow said the company disputes the claims in both lawsuits and will defend itself. **— Reuters** Boeing’s 787 Dreamliner is poised to resume flights in Japan, ending a more than three- month hiatus that grounded 24 planes owned by ANA Holdings and Japan Airlines. ANA said it will conduct the jet’s first test flight on Sunday, after Japan on Friday approved the restart of 787 flights with upgraded batteries. The government’s permission is for all flights, including test and commercial services, said Shigeru Takano, a director at the ministry’s Civil Aviation Bureau. The move will kick-start resumption of flights with 787s, which were ordered parked on Jan. 16 after lithium-ion batteries on two Dreamliners overheated and smoldered. ANA Chief Executive Shinichiro Ito and Ray Conner, president of Boeing Commercial Airplanes, will be aboard Sunday’s flight, the airline said. Boeing dispatched about 300 personnel on 10 teams to airlines to install the fix over five days while preparing to hand over the new 787s. Ethiopian Airlines Enterprise plans its first Dreamliner flight with the upgraded batteries Saturday, a trip from Addis Ababa to Nairobi. United Continental Holdings, the only U.S. carrier that has received Dreamliners, sent the first of its 787s to a Boeing facility in San Antonio this week to get the new system installed. **— Bloomberg News** l  **New York City** is suing BP over the drop in its stock price after the 2010 Gulf of Mexico oil spill, saying its pension funds lost $39 million. The lawsuit in federal court in New York claims BP failed to tell shareholders about the risks of its offshore drilling, and that after the spill it tried to minimize the cost to shareholders. BP is facing a number of shareholder lawsuits over the spill, including a class-action federal suit in which the New York State Common Retirement Fund is a lead plaintiff, along with the Ohio attorney general representing four public pension funds. l  **Chevron,** the world’s third-biggest energy company by market value, reported first-quarter profit that exceeded analysts’ estimates after boosting natural gas output amid rising prices for the fuel. Net income declined 4.5 percent to $6.18 billion from $6.47 billion a year earlier, the San Ramon, Calif.-based company said Friday. Chevron’s earnings from oil and gas wells outside the United States rose 3.1 percent to $4.78 billion as increased gas output more than offset lower crude production. In the United States, the company raised gas output from new wells in Appalachia’s Marcellus Shale formation, where most of the drilling costs are being borne by India’s Reliance Industries under the terms of a joint venture. l  **Burger King’s** first-quarter earnings more than doubled even though revenue fell, as the fast-food chain trimmed several restaurant-related expenses. Sales at established restaurants declined 1.4 percent, including a 3 percent drop in the United States and Canada. Overall, Burger King Worldwide said Friday its net income rose to $35.8 million, up from $14.3 million a year earlier. Revenue fell about 42 percent to $327.7 million. Total restaurant expenses, which include food costs and payroll expenses, fell nearly 70 percent in the quarter to $108.1 million. l  **Oil** rose more than 5 percent this week, even with a decline on Friday, as traders concluded that last week’s dive to a low for the year was overdone. The price of oil slipped Friday after a report showing that growth picked up in the U.S. economy last quarter, but not as much as expected. Benchmark oil for June delivery fell 64 cents to $93 a barrel. Still, oil rose $4.99 a barrel this week. The 5.6 percent increase was the largest weekly gain of the year. Oil hit a low of $86.68 last week. l  **Tesla Motors,** the luxury battery-car company run by billionaire Elon Musk, is North America’s rechargeable auto sales leader so far this year as its Model S sedan passed General Motors’ Chevrolet Volt. Tesla expects to report at least 4,750 deliveries of the electric Model S in the United States and Canada when it releases first-quarter results May 8, said Shanna Hendriks, a company spokeswoman. That compares with 4,421 Volt sales in North America and 3,695 deliveries of Nissan Motor’s Leaf, based on data provided by the carmakers. **— From news services** l  **In Sunday Business:** You too could be Mr. Money Mustache and retire at 30. l  **Monday:** Personal income data for March released at 8:30 a.m. Pending home sales for March released at 10 a.m.

Republicans embrace their phoniness

The Republican Party has finally admitted what has been fairly obvious for much of the past six years: It produces fake news. This is not an earth-shattering revelation to anybody who has been paying attention, but, still, it’s an important step for the party to embrace the phoniness. “NRCC Launches Fake News Sites to Attack Democratic Candidates” was a headline in the National Journal on Tuesday. As Shane Goldmacher reported, “The National Republican Congressional Committee, which came under fire earlier this year for a deceptive series of fake Democratic candidate websites that it later changed after public outcry, has launched a new set of deceptive websites, this time designed to look like local news sources.” These two dozen sites, with names such as “North County Update” and “Central Valley Update” look like political fact-checking sites; the NRCC’s spokeswoman, Andrea Bozek, called it “a new and effective way to disseminate information.” An NRCC official told me the sites are legal because, if you scroll all the way to the bottom, you’ll find, “Paid for by the National Republican Congressional Committee” in small print. “They’re not fake Web sites,” the official said. “These are real attack Web sites.” Real attacks, but fake news: This is a fairly accurate summary of what the GOP’s scandalmongers have been purveying during the Obama years. There was the assertion that the White House was covering up high-level involvement in Operation “Fast and Furious,” a gun program under the Bureau of Alcohol, Tobacco Firearms and Explosives that went awry. No evidence was found. There was the accusation that the Obama White House pushed through money for Solyndra to pay the president’s political cronies even though officials knew the solar-energy firm was going bankrupt. Didn’t happen that way. Accusation: Obamacare would bring about the collapse of the American health-care system and replace it with socialized medicine and death panels. No such thing has occurred. The IRS scandal, it was alleged, could be traced back to the White House, which targeted Obama’s enemies for political reasons. Nope. The actual truth of the allegations doesn’t matter. Each one sullied President Obama’s name, and investigators’ failure to deliver the goods did little to remove the taint. That’s why fake news works: Falsehoods can drive a president’s approval rating into the cellar while the truth is still getting out of bed. And now we have the Benghazi exoneration. For nearly two years, Republicans have been alleging all manner of scandal involving the 2012 attacks on U.S. facilities in the Libyan city. That somebody — Hillary Clinton? — issued a stand-down order to prevent help from getting to American officials under fire; that Clinton rejected pleas for more diplomatic security in Libya; and that the Obama White House pushed false talking points to play down the terrorist attacks before the election. The accusations have been roundly debunked, most recently in military officers’ testimony released by the GOP-controlled House Armed Services Committee. Now there’s a bipartisan report, adopted unanimously by the GOP-controlled House Intelligence Committee on July 31, awaiting declassification by the administration. It throws yet another bucket of cold water on the conspiracy theories. In a statement, the top Democrat on the panel, Dutch Ruppersberger (Md.), said the report finds that: “[T]here was no intelligence failure surrounding the Benghazi attacks.” “[T]here was no ‘stand down order’ given to American personnel attempting to offer assistance that evening, and no American was left behind.” “[T]he talking points reflected the conflicting intelligence assessments in the days immediately following the crisis.” “[T]here was no illegal activity or illegal arms sales occurring at the U.S. facilities in Benghazi.” “And there was absolutely no evidence, in documents or testimony, that the intelligence community’s assessments were politically motivated in any way.” The report is not yet public, and Republican sources indicate that there is more disagreement in the report than Ruppersberger’s statement indicates and that the report is not as exculpatory as he implies. But there has been no challenge from the Republican side to the accuracy of the findings Ruppersberger detailed in his statement. Now that the truth is catching up to them, House Republicans will need to stay one step ahead. Rep. Trey Gowdy (R-S.C.), chairman of the select committee on Benghazi, told CNN’s Deirdre Walsh last week that, despite what the Intelligence Committee found, “there is more work to be done and more to be investigated.” Excellent. Maybe he can post his phony accusations on some fake news Web sites. **_Twitter: @Milbank_ ** _Read more fromDana Milbank’s archive, follow him on Twitter or subscribe to his updates on Facebook._ **Read more:** Richard Cohen: Nixon’s lasting damage to the GOP E.J. Dionne: Can voters change the Republican Party? Paul Waldman: Republican fear-mongering on Iraq won’t work Dana Milbank: North Carolina Republicans put ideology above lives

Colbert King: D.C.’s epidemic of guilt

In some circles, it’s called “getting over on.” It means using a situation to your advantage, even if doing so is unethical. In our city, getting over on the D.C. government — and, by extension, taxpayers — is a flourishing industry. The scope is sickening. In the past few months, about 30 people have been arrested or indicted or have pleaded guilty and gone to prison for getting over on the D.C. Department of Employment Services, the Department of Human Services, the Children and Youth Investment Trust Corp., a city-owned hospital, the Office of Campaign Finance, D.C. Medicaid, the Corrections Department, a charter school and Medicare. The amount of money embezzled, accepted in bribes, defrauded or spent on illegal political campaign contributions? Nearly $19 million. Mind you, those figures are based on records of arrests and convictions since June. They don’t include efforts to get over on federal campaign finance laws. This week, a man pleaded guilty to federal charges of failing to report more than $600,000 that his New York company received to be spent on behalf of a 2008 presidential campaign. The source of the unreported funds is widely believed to be D.C. businessman Jeffrey Thompson, who is thought to figure prominently in the corruption of the District’s 2010 mayoral campaign. All of this comes even after former D.C. Council member Harry Thomas Jr. (D-Ward 5)pleaded guilty to lining his pockets with more than $350,000 in taxpayer money meant to benefit children; former council chairman Kwame Brown (D) pleaded guilty to a felony bank fraud charge; and former council member Michael A. Brown (D-At Large) admitted embarking on an illegal bribery scheme. Last week, 14 people from the Washington area were arrested and charged with obtaining more than $250,000 in unemployment benefitsfrom the Department of Employment Services while they were employed. The Post reported that on the same day, Sept. 5, a city social services worker was charged with creating false identities that allowed her to steal more than $700,000 in cash, food stamps and health benefits. On Aug. 20, a former employee of United Medical Center, the city-owned successor to Greater Southeast Community Hospital,pleaded guilty to a federal charge of embezzling more than $335,000 in overtime pay by manipulating the center’s time-keeping system. On Aug. 13, a former aide to Vincent Gray’s 2010 mayoral campaign pleaded guilty to making a false statement about his efforts to thwart a federal investigation involving the campaign; he admitted to giving about $8,000 to a potential witness to leave town. August was a slow month. Not so July. On July 31, a provider of home health-care services to Medicare and D.C. Medicaid beneficiaries was sentenced to eight months in prison for falsifying records in connection with a federal audit. The day before, a federal judge entered a judgment of more than $17 million against a D.C. health-care provider for submitting false nuclear cardiology claims to federal and state health-care programs.The cardiologist was double- billing for tests and services. On July 29, a former D.C. corrections officer was sentenced to three months in jail and six months of home detention for accepting $2,500 in bribes to bring contraband into the city jail. On July 26, a former assistant treasurer to Gray’s mayoral campaign was sentenced to six months in prison for obstruction of justice and other charges stemming from his actions in the 2010 contest. On July 19, the former chief of staff to Harry Thomas pleaded guilty to a criminal tax charge for her role in channeling $110,000 in youth grant funds to pay for an inaugural ball. In June, corruption was bustin’ out all over. A former temporary employee of a D.C. charter school pleaded guilty June 10 to a federal charge of stealing more than $75,000 from the school by issuing and cashing checks to fictitious vendors. The same day, Michael Brown pleaded guilty to accepting $55,000 in bribes. On June 14, another former corrections officer pleaded guilty to a federal charge of conspiracy to commit bribery: taking $400 to smuggle drugs into the D.C. jail. On June 24, a Philadelphia business owner pleaded guilty to a federal charge of concealing the source of more than $125,000 in campaign contributions. He also admitted to causing at least $49,000 in D.C. political contributions to be made in his name, the names of his relatives and his company to, among others, candidates for mayor and the D.C. Council. Within the same week, another D.C. business executive pleaded guilty to a misdemeanor charge involving more than $150,000 in campaign contributions. On June 25, a father and son were indicted on federal charges in a bribery scheme to obtain taxicab business licenses. On June 26, the executive director of a nonprofit pleaded guilty to wire fraud and admitted using more than $200,000 in city grants to youth programs for gambling and other personal expenses. All since June 10. And those are just the ones we know about. Getting over on the city is a virtually nonstop undertaking, arrests and convictions notwithstanding. What makes this so disgusting is that too many elected officials responsible for overseeing government lack the moral authority to influence anybody or anything because of their own conduct. To the contrary: Examples of getting over can be found at the top. The rest are just emulating their leaders. Voters, it’s time to wake up. _Read more fromColbert King’s archive._ **Read more on this from Opinions:** David Grosso: Why D.C. needs public campaign financing Colbert King: D.C. Council, it’s time to get right with the feds The Post’s View: Another D.C. mayor campaign aide pleads guilty Jonetta Rose Barras: Failed leadership and fallen sons

To the players in Abscam, the real-life ‘American Hustle,’ the bribes now seem quaint

The massive FBI anti-corruption operation known as Abscam captured the public imagination in 1980 with a cinematic cast of characters: phony Arab sheiks, real mobsters, corrupt local politicians, U.S. congressmen on the take — all of it orchestrated by a cigar-chomping con artist paid by the feds to set up stings. And the best thing was, they videotaped everything. Now, anybody who thought it could be a movie can stand proud: Abscam forges the spine of “American Hustle,” in theaters now, which opens with the on-screen words: “Some of this actually happened.” Former FBI supervisor John Good could tell you exactly which parts happened; he oversaw Abscam in its entirety, from 1978 to 1980. The undercover operation put six congressional representatives and one senator in prison for bribery and conspiracy, and secured nearly a dozen other significant convictions. Yet Good says he and his main partner, FBI undercover agent Tony Amoroso, both now in their 70s, were “totally surprised” that anyone wanted to revisit Abscam, a largely forgotten scandal. Back then, it was dubbed the largest political corruption probe in the bureau’s history, involving more than 100 agents. Among them: supposed sheiks in fancy suits and improvised headdresses, seeking political favors and proffering stacks of $100 bills in return. (The role was mainly played by an agent of Lebanese descent, after an earlier effort by a non-Arabic speaker came hilariously close to disaster.) Many agree it could never happen again, mainly because stricter guidelines were imposed on sting operations. But today offering bribes in exchange for legislation seems almost quaint. “The lobbyists do the same things we did, only to a much greater degree,” Good says. Thirty-five years ago, Rep. Michael “Ozzie” Myers, a Philadelphia Democrat, famously said on an Abscam tape: “Money talks in this business and bulls--- walks.” “It’s probably more true today than it was then,” Myers says now. Expelled from Congress, he served 21 months in prison for taking a $50,000 bribe. He considers the operation a waste of money that destroyed “legitimate, honest people.” “American Hustle” doesn’t dwell on such points. Director David O. Russell sexed up the story with unharnessed cleavage and chest hair galore. He added such scenes as the undercover FBI agent pummeling a supervisor with a desk phone, and a plot line putting the same coke-snorting agent into a volcanic lovers’ triangle. “None of that ever happened,” says Good, a consultant on the film with retired agent Amoroso. But the erstwhile G-men know exactly why filmmakers make stuff up. “If they just did it the way Abscam was done, it would be a very boring movie,” Good says. The real Abscam bore the bland stamp of watchful bureaucrats, from then-FBI Director William Webster, a former federal judge, to careful Justice Department attorneys, on down to the gimlet-eyed auditors who balked at burgeoning expenses. The FBI paid its informant, convicted con man Melvin Weinberg, $3,000 a month, plus bonuses; he constantly complained that the feds were too stingy. “I’m a swindler,” Weinberg once told the author Robert W. Greene. “There’s only one difference between me and the congressmen I met on this case. The public pays them a salary for stealing.” The operation was bound to be political dynamite — and sure enough, after Abscam exploded into public view, both the House and Senate convened hearings, raised issues of entrapment and FBI overreach and questioned the agents’ dependence on a swindler. In the movie, the irrepressible, womanizing Weinberg, now 89, is played by Christian Bale. The main undercover FBI man — a composite of Good, Amoroso and agent Jack McCarthy — is played by Bradley Cooper. Their mutual love interest is Amy Adams, in the role of the swindler’s mistress. The bureau began its fishing expedition by dipping lines in New York and watching white-collar criminals rise to the bait; then cast its nets in New Jersey and Philadelphia, picking up some municipal and state small fry; and eventually reeled in the Washington whales. The sting took its name from Abdul Enterprises Ltd., a Long Island company the FBI created as a cover for the sheiks, who said they wanted to invest their oil wealth in the United States — for example, in the newly opened Atlantic City casino market — and also obtain permanent residency. Amoroso and Weinberg posed as the Arabs’ representatives and approached congressmen mainly to grease the immigration skids; most payoffs totaled $50,000, at a time when House members made about $60,000 a year. The moments in “American Hustle” that hold the most verisimilitude are those re-creating the low-resolution black-and-white videos recorded by hidden cameras. Most of the stings involving congressmen were staged in a stately red-brick colonial home in the 4400 block of W Street in Georgetown, rented by the FBI from an unwitting Washington Post reporter. “It was wired completely,” recalls Good. “I watched all of the payoffs go down, every single one of them.” All but one of the convicted lawmakers were Democrats. Today four are dead: Sen. Harrison “Pete” Williams (N.J.); Reps. Raymond Lederer (Pa.), Frank Thompson (N.J.) and the lone Republican, Richard Kelly (Fla.). Besides Ozzie Myers, the others still alive are John Jenrette of South Carolina and John Murphy of New York. Neither could be reached for comment. Myers, 70, a retired building contractor, said he hadn’t seen the movie but understood from family and friends that it was “more of a comedy than it is about the facts of Abscam.” The sting in his case went down in a hotel at New York’s JFK Airport; in terms of the sheik’s getting a green card, things would go “100 percent” better with Myers in his corner, he said on tape. Myers took a briefcase holding $50,000, but, he says today, “It is just outrageous, to go after people who had never done anything wrong. Where do you come up with that I was some kind of a hoodlum?” In 1981, though, he justified the payoff by claiming he was poor. “I took money because I like money,” he told a Philadelphia journalist then. “I feel I didn’t do anything wrong and if anybody offers me $25,000 this afternoon, I will take it.” “Ozzie was one of my favorite guys,” Good says today. Sen. Larry Pressler, a Republican from South Dakota, emerged with clean hands, his reputation not only intact but also enhanced. In the fall of 1979, Pressler needed to retire his campaign debt after a quixotic bid for the GOP presidential nomination. He recalls that a “perfectly well-intentioned” socialite, one of his volunteer fundraisers, had somehow made connections with supposedly flush donors, leading to a meeting at the Georgetown house. “We chased him, actually,” says Good, explaining how Pressler ended up on camera. The undercover agents tempted the first-term senator with a $50,000 contribution to introduce a bill to secure residency for the two Arabs. Pressler said he would have his staff look into immigration possibilities, according to transcripts quoted in Greene’s book, “The Sting Man: Inside Abscam.” But he promised nothing. “In any event, it would not be proper for me to promise to do anything in exchange for a campaign contribution,” Pressler said on tape. “I thought they were flaky and dishonest,” Pressler recalled last week. “I said, ‘What you’re proposing is illegal.’ . . . I’ve still got the tape somewhere.” After Abscam hit the headlines, a front-page article in The Post began this way: “Thanks to the FBI’s undercover ‘sting’ operation, there now exists incontrovertible evidence that one senator would not be bought.” The other evening in Sioux Falls, S.D., Pressler and his wife took in a showing of “American Hustle.” He sensed in advance that his Abscam experience wouldn’t make it into the movie, and he was right. Nobody cares about the story of a guy who did the right thing, he said. “Had I taken the bribe and gone into rehab, it probably would have been seen as an American success story.” But for Pressler, 71, Abscam has helped prompt a sequel of sorts. After serving 18 years in the Senate before losing reelection in 1996, he’s attempting a comeback by running as an independent in 2014. His aim is to fight gridlock and the “sordid” influence of money on elected officials, he said. He also vows to serve only one term so he doesn’t have to bow and scrape for contributions. “I will have the glorious, glorious experience of not having to raise a dime,” he said. As for Mel Weinberg, the rogue at the center of it all, the Sunday Telegraph of London caught up with him recently in a Florida retirement community. To make “American Hustle,” the producers wanted Weinberg’s life-story rights. He sold them — for $250,000, he told the paper. Abscam had provided one more big score.

Planned Parenthood files lawsuit over antiabortion ‘sting’ video-maker

Planned Parenthood filed a federal lawsuit Thursday against the maker of a series of undercover videos released last year that sought to prove that the women’s health organization illegally profits by selling tissue from aborted fetuses. In a complaint filed with the U.S. District Court in San Francisco, officials with the Planned Parenthood Federation of America and its California affiliates alleged that the Center for Medical Progress broke multiple federal laws as part of its campaign, including violations of the Racketeer Influenced and Corrupt Organizations Act, commonly called RICO, as well as engaging in mail fraud, invasion of privacy, illegal secret recording and trespassing. “This case is about a network of antiabortion extremists and the laws they broke in order to spread lies and harm Planned Parenthood,” Dawn Laguens, executive vice president of the Planned Parenthood Federation of America, said during a teleconference with reporters Thursday. “This entire smear campaign is a fraud built on illegal acts and a web of lies.” Laguens also repeated what Planned Parenthood has long maintained — that the organization did nothing wrong regarding its fetal tissue donation program and that the videos were edited in a way to mislead the public. Attorneys with Planned Parenthood suggested that the lawsuit could drag on for as many as 18 months, and Laguens said she expects it to be injected into the political conversation this year as lawmakers in some states attempt to pass more abortion restrictions and the issue of reproductive rights arises as part of presidential election campaigns. David Daleiden, project leader for the Center for Medical Progress and the primary activist behind the videos, issued a defiant statement. “Game on,” he said. “I look forward to deposing all the CEOs, medical directors and their co-conspirators who participated in Planned Parenthood’s illegal baby body parts racket.” The lawsuit is an attempt to go on the offense against Daleiden, whose project energized the antiabortion movement and its efforts to cut off state and federal funding to Planned Parenthood, which provides health-care services, including abortions. Daleiden, previously little known in antiabortion circles, spent nearly three years on the project. Posing as a sales representative for a fetal tissue procurement company called BioMax, he attempted to draw Planned Parenthood affiliates into contracts to sell fetal tissue from abortions for scientific research. Federal law prohibits abortion clinics from selling fetal tissue for profit but allows them to recoup the costs of storing and delivering the tissue. While the videos did not prove any illegal activity on the part of Planned Parenthood, they shed an unflattering light on some of the group’s officials, who were caught on hidden cameras speaking casually and, at times, lightly about abortion procedures and fetal body parts. Planned Parenthood has long condemned the videos as heavily edited in an attempt to mislead viewers. Still, Cecile Richards, president of Planned Parenthood, publicly apologized for the tone of the comments of one official captured on tape, and the organization stopped accepting reimbursements for the fetal tissue it donates. The lawsuit centers on the ways Daleiden and his collaborators tried to mislead Planned Parenthood and others. It alleges that Daleiden used fake IDs to register for private conferences and signed nondisclosure and other agreements to gain access to top-level Planned Parenthood officials — agreements that he would later disregard. The suit also details the harms that it says befell Planned Parenthood as a result of the video campaign. Several doctors featured in the videos have been threatened with bodily harm, the lawsuit alleges, and Planned Parenthood has had to contend with a number of costly investigations by state officials seeking evidence of wrongdoing. So far, none of the states that have investigated Planned Parenthood has found evidence of the illegal sale of fetal tissue. Planned Parenthood is seeking an injunction barring Daleiden and others involved with the project from ever trying to enter a Planned Parenthood clinic or conference in the future and from surreptitiously filming. It is also seeking unspecified penalties and damages.

Judge sentences Potomac, Md., doctor to nine years in prison

A Maryland judge sentenced a Potomac doctor to nine years in prison for his role in a $3.1 million health-care fraud. Paramjit Singh Ajrawat, 60, was charged with counts including health-care fraud, wire fraud and obstruction of justice. He was sentenced earlier this week in U.S. District Court in Greenbelt by Judge Deborah K. Chasanow. He was also ordered to pay $3.1 million in restitution. According to prosecutors, Ajrawat specialized in “interventional pain management” and with his wife, who is also a doctor, owned and operated a clinic, called Washington Pain Management Center, in Greenbelt. In September 2015, a federal jury convicted Ajrawat and his wife, Sukhveen Kaur Ajrawat, 57. His wife died on Feb. 1, and the charges against her were dismissed. In trial, evidence was presented that showed how the couple defrauded federal health benefit programs, including Medicare and Medicaid. The defrauding efforts happened from January 2011 to May 2014. The couple filed claims, officials said, for procedures that were not performed. They had several schemes, including filing claims for procedures that gave higher reimbursement amounts than what they had actually done to a patient. And in some cases, they filed claims for procedures they had never done. In one instance, the couple turned in claims that Ajrawat had given nerve block injections to a patient using imaging guidance machines, prosecutors said. But he did not own or use such a machine. In a statement, U.S. Attorney for Maryland Rod J. Rosenstein said, “This lengthy sentence sends a powerful message that doctors who defraud health insurance programs will be held accountable.”

GSA inspector general is investigating possible bribes, kickbacks

The inspector general for the General Services Administration said Monday that he is investigating possible bribery and kickbacks in the agency, as lawmakers accused the former GSA administrator of allowing a Las Vegas spending scandal to erode taxpayers’ trust in government. Inspector General Brian Miller told a congressional committee scrutinizing an $823,000 Las Vegas conference that his office has asked the Justice Department to investigate “all sorts of improprieties” surrounding the 2010 event, “including bribes, including possible kickbacks.” He did not provide details. Miller’s revelations of possible further misconduct by organizers of the four-day event, coming on the heels of a highly critical report, enraged Democrats and Republicans on the House Oversight and Government Reform Committee. The lawmakers put GSA officials on the defensive during a tense four-hour hearing, with some Republicans loudly rebuking former administrator Martha N. Johnson and her colleagues. GOP lawmakers argued that the excessive spending proves their case for smaller government. Taxpayers picked up the tab for a mind reader, bicycles for a team-building exercise and a slew of private parties at the conference. “There are those who believe government’s reach should be expanded,” committee Chairman Darrell Issa (R-Calif.) said in his opening statement. “What has come to light surrounding GSA’s activities should give pause to anyone who has opposed cutting government size and spending.” But Democrats joined him in condemning the outsized tab for the conference, with Rep. Elijah E. Cummings (Md.), the committee’s ranking Democrat, calling it “indefensible” and “intolerable.” “It’s not your money, it’s the taxpayers’ money,” Cummings scolded agency officials. Johnson, speaking publicly for the first time since her abrupt resignation last week, called the biennial Western Regions Conference a “raucous, extravagant, arrogant, self-congratulatory event that ultimately belittled federal workers.” Closing her testimony, she said, “I will mourn for the rest of my life the loss of my appointment.” Seated next to her was Jeffrey Neely, the senior executive in the GSA’s Pacific Rim region who organized the event. Neely, 57, who had received a subpoena from the committee, asserted his Fifth Amendment right to not incriminate himself and left the witness table. Neely, who earns a salary of $172,000, is one of five senior managers who have been placed on paid administrative leave pending further discipline. Several lawmakers said it galled them that the managers are still receiving their full salaries. As civil servants, they have more protections than political appointees. Johnson’s replacement, Acting Administrator Dan Tangherlini, told lawmakers that he has canceled almost every conference scheduled for GSA employees for the rest of the fiscal year. He also sent letters last Friday to Neely, former Public Buildings Service commissioner Robert Peck and Robert Shepard, Neely’s chief of staff, demanding repayment for private parties they threw in their rooms at the M Resort Spa Casino. Peck has been summoned to appear Tuesday at the second of four congressional hearings on the scandal. Tangherlini also wants repayment from an audiovisual company that was given hotel rooms as part of its $59,000 contract for the conference but that Tangherlini said double-billed the government. Asked if the GSA has a “culture” problem that led to the freewheeling spending, which included poolside entertainment by a clown and a “Red Carpet” talent show, Tangherlini replied, “We definitely have a culture problem in Region 9,” referring to the four-state Pacific Rim office. “I can’t say I know enough to say we have a culture problem” in the rest of the agency, he said. The officials’ apologies did little to satisfy lawmakers, who were outraged that top agency officials allowed the spending to take place, then waited to take action even after the inspector general briefed them midway through his year-long investigation. Issa and others questioned how Johnson could have signed off on a $9,000 bonus for Neely last year over the objections of a committee that reviews bonuses for members of the Senior Executive Service. In an e-mail released by the committee, Johnson wrote “yes on a bonus,” in part because Neely had to serve as regional administrator in an acting capacity “forever and a day.” She told lawmakers Monday that the reward was for his job performance. Pressed on whether she would deny the bonus knowing what she knows today, she said she could not say. Johnson said she received a briefing on the preliminary findings in May 2011. She decided not to launch her own investigation, “as such action would have entailed a terrific duplication of government resources.” Johnson said she believed that Miller would quickly conclude the investigation, but “the deadline slipped repeatedly from October to November to December.” She said her office received a final report last month — 15 months after it was requested. “I personally apologize to the American people for this entire situation,” Johnson said. Also at Monday’s hearing, David E. Foley, a former deputy commissioner at the Public Buildings Service, repeatedly apologized for poking fun at the lavish spending during the conference’s talent show, comments that were captured on video. But Foley stressed that he was not involved with planning the event. Most of the contracts for the conference, including for an event planner, the audiovisual company and the bike-building exercise, were not competitively bid, as federal rules require.

Planned Parenthood has been absolved. The GOP should give up its crusade.

‘WE MUST go where the evidence leads us.” So explained a Texas district attorney about why an investigation into alleged misconduct by Planned Parenthood ended instead with charges against Planned Parenthood’s accusers. By adhering to the facts, prosecutors and grand jurors set a model of behavior that puts them at odds with the politicians — in Congress, in statehouses and on the Republican presidential campaign trail — who have tried to advance their agendas by falsely demonizing an organization that provides critical health care to women. In their evidence-free crusade, they have put vital health services at risk and wasted millions of taxpayer dollars. A Houston grand jury on Monday returned indictments against two antiabortion activists involved in producing the explosive “sting” videos that purported to show Planned Parenthood personnel selling aborted fetal organs for profit. That the damaging but long-discredited videos showed nothing of the kind was underscored by Harris County District Attorney Devon Anderson’s statement that the grand jury had cleared Planned Parenthood of any wrongdoing. Instead, the head of the Center for Medical Progress and another employee were charged with felony counts of tampering with a government record, presenting fake driver’s licenses with intent to harm or defraud. Center head David R. Daleiden was also charged with a misdemeanor count related to offering to buy human tissue. The judicial process will determine the validity of the charges against these two people. What we already know is that the investigation was, in Ms. Anderson’s words, “lengthy and thorough”; that it was conducted by a respected Republican prosecutor; and that it was launched at the behest of Lt. Gov. Dan Patrick (R), a fierce opponent of abortion and of Planned Parenthood. In clearing Planned Parenthood of any wrongdoing, Harris County officials joined officials in 12 states (including Kansas, Florida, Ohio and Georgia) who concluded investigations into claims Planned Parenthood illegally profited from fetal tissue donation by absolving it of misconduct. An additional eight states declined even to investigate, citing a lack of any evidence of wrongdoing. The fact is Planned Parenthood does not sell fetal tissue for profit and never has. Unfortunately, none of that has kept congressional Republicans from seeking to defund Planned Parenthood, nor hostile state governments from trying to block access to care at Planned Parenthood clinics. And don’t hold your breath waiting for an apology from Carly Fiorina or other Republican presidential candidates who have demagogued the issue. Even in the face of this finding of no wrongdoing by a group of citizens relying on evidence, logic and common sense, Texas Gov. Greg Abbott (R) insisted the state would continue its own investigation of Planned Parenthood. After all, how important are the facts when there is self-interest to be served and a political point to be made? **Read more about this topic:** Dana Milbank: The GOP still has nothing to show for its anti-Planned Parenthood campaign Cecile Richards: These extremist videos are nothing short of an attack on women Katrina vanden Heuvel: The war on Planned Parenthood

The mysterious case of $54 million VA spent on prosthetics in $24,999 payments

The payments couldn’t help but catch the attention of the top procurement official at the Department of Veterans Affairs. Employees in the purchasing department of a VA hospital in the Bronx had used government purchase cards like credit cards at least 2,000 times to buy prosthetic legs and arms for veterans. Each time they swiped the cards, it was for $24,999. That was precisely one dollar below VA’s charging limit for purchase cards. When word reached Congress about the $54,435,743 worth of prosthetics bought under such odd circumstances over two years — the subject of an inspector general investigation announced Monday — lawmakers demanded details. But they were told there was no documentation. VA officials had prepared to tell Congress that the records had been destroyed by Hurricane Sandy, according to previously undisclosed records, until a senior adviser in the Secretary’s office pointed out that the timing was wrong and the excuse wouldn’t hold up. The Bronx case was one of several acquisition practices Jan R. Frye described in an internal memo to Secretary Robert McDonald that accused the VA of mismanaging  how its buys medical care and supplies for veterans. _[Veterans Affairs improperly spent $6 billion annually, senior official says ]_    *[WSU]: Wayne State University   *[Tue]: Tuesday   *[Wed]: Wednesday   *[UNM]: University of New Mexico Frye, deputy assistant secretary for acquisition and logistics, described a culture of “lawlessness and chaos” at the Veterans Health Administration, the massive health-care system for 8.7 million veterans. He said the agency has been spending at least $6 billion a year in violation of federal contracting rules to pay for medical care and supplies, wasting taxpayer money and putting veterans at risk. Purchase cards are an appropriate way to acquire supplies or medical care that costs up to $3,000, Frye testified at a House hearing in May. But above that limit, the cards can be used for payment only if there is a certified invoice linked to a properly awarded contract. He said he suspected that the thousands of prosthetics put on cards in $24,999 increments was a sign that contracting staff was trying to get around writing contracts. _[House members berate VA over billions in alleged improper spending]_    *[WSU]: Wayne State University   *[Tue]: Tuesday   *[Wed]: Wednesday   *[UNM]: University of New Mexico The Bronx case tipped Frye off to a wider use of purchase cards he said run afoul of federal rules. During an 18-month period that ended last year, he documented that up to $1.2 billion in prosthetics were bought with cards and without contracts, he testified. Acting Inspector General Richard Griffin, responding to a request from New York Rep. Kathleen Rice, a Democrat on the House Veterans Affairs Committee, is now looking into the prosthetics purchases as part of a wide-ranging review of Frye’s allegations. McDonald, after reading the 35-page memo, referred the contents to the agency’s watchdog. VA officials had received an inquiry from Congress in September 2012 about the Bronx payments, but a letter signed by former secretary Eric Shinseki did not go out until July 2013. The agency had prepared to say that the records had been transferred to VA’s medical center in Manhattan, where they were destroyed in Hurricane Sandy, documents obtained by The Post show. _[VA admits it has no contracts in place for billions spent on veterans’ medical care]_    *[WSU]: Wayne State University   *[Tue]: Tuesday   *[Wed]: Wednesday   *[UNM]: University of New Mexico But in reviewing the claim that the records had been destroyed, a senior adviser in Shinseki’s office was skeptical. “Gemma — this isn’t going to work,” the adviser wrote in an e-mail obtained by The Post. “The [congressman’s] letter was dated 26 Sept and the storm was 28 October. Yet we talk about visits in December 2012 and again in January. Not clear why we didn’t figure out in December that we lost the records and had to go back in January,” he wrote in April 2013. “This is not cleared.” Rice said in a statement Monday, “The damage caused by Superstorm Sandy was devastating and far-reaching, but the claim that all of these documents were destroyed strikes me as all too convenient and must be substantiated. We need to know exactly what happened to the documents, how and why this money was spent without written contracts, and who is accountable.” The letter that finally went to Congress, signed by Shinseki, said simply: “No contract files exist” and “there is no evidence of full and open competition” for the prosthetics bought in the Bronx. **You might also like:**    *[WSU]: Wayne State University   *[Tue]: Tuesday   *[Wed]: Wednesday   *[UNM]: University of New Mexico Nine big takeaways from Jan Frye’s memo to the VA secretary    *[WSU]: Wayne State University   *[Tue]: Tuesday   *[Wed]: Wednesday   *[UNM]: University of New Mexico

U.S. Navy moles helped Malaysian businessman bilk service, prosecutors say

For the past four years, Navy officials strongly suspected they were being ripped off by a major defense contractor that resupplied ships and submarines across Asia. The service launched several reviews and criminal investigations, but none produced hard evidence of wrongdoing. The chief executive of the contractor, Glenn Defense Marine Asia, seemed to have a uncanny knack for swatting away auditors’ concerns. He even managed to persuade the Navy to give him more lucrative contracts, worth up to $200 million. Now, federal prosecutors say they finally figured out how Leonard Glenn Francis — known in Navy circles as “Fat Leonard” for his imposing girth — was able to dodge scrutiny for so long. They have accused the Malaysian businessman of recruiting several high-placed moles in the Navy. The informants allegedly leaked sensitive information about contracts as well as closely guarded details about law-enforcement probes targeting Glenn Defense Marine, enabling the company to bilk the U.S. government out of more and more money as it fended off the investigations. The case is shaping up as the biggest corruption scandal to hit the Navy in years. Two Navy commanders have been arrested — the most recent on Wednesday — and charged with feeding inside information to Francis, as has a senior agent with the Naval Criminal Investigative Service. In addition, a Navy captain who has not been charged but is under investigation was relieved of his ship’s command last month. Court papers suggest that still more officers could be implicated. The case has exposed how the Navy remains vulnerable to kickbacks and bribes from its extensive network of contractors, despite past pledges by the Pentagon to strengthen oversight. In particular, affidavits filed by investigators demonstrate how easy it was for a foreign contractor to allegedly pry loose secrets from the Navy with age-old temptations: sex and money. All three of the Navy officials charged in the case are accused of selling information to Singapore-based Glenn Defense Marine in exchange for regular visits with prostitutes, travel expenses and other perks. In October 2009, Francis received an alert from one of his alleged moles, Navy Cmdr. Jose Luis Sanchez, a deputy logistics officer for the Navy’s Seventh Fleet. According to charging documents, Sanchez reported that Navy officials were raising concerns about $111,000 in expenses billed by Glenn Defense Marine for a Navy ship’s visit to Malaysia. “Will call tonight to discuss,” Sanchez said in an e-mail. In exchange, Francis provided Sanchez and other Navy personnel with female escorts and upscale hotel rooms during visits to Singapore and Malaysia, according to the charging documents. “Yummy . . . daddy like,” Sanchez enthused in a Facebook message after the contractor sent him e-mails describing the arrangements. Sanchez was arrested Wednesday and charged with conspiracy to commit bribery. Prosecutors said he regularly provided Glenn Defense Marine with classified reports of ship movements and scheduled port visits, as well as other inside information that gave the firm an edge in bidding for contracts. Sanchez was granted release on $100,000 bond Thursday and is scheduled to appear in court in San Diego this month, according to his attorney, Vince Ward. Ward declined to comment on the allegations against Sanchez, saying he only recently took up the case. In 2010, Glenn Defense Marine continued to attract the suspicion of Navy officials. In July 2010, court records show, the Naval Criminal Investigative Service opened a probe into allegations that the contractor had submitted false claims for $110,000 in dockage and wharfage fees from a Navy ship exercise in Thailand. Investigators say, however, that Francis was able to closely track the progress of that probe thanks to another mole. According to court papers, Francis had recruited a senior agent with the NCIS, John B. Beliveau II, to provide him with details of the case as it unfolded by sharing material from internal NCIS files. In addition, Beliveau “specifically counseled” Francis on how to respond to inquiries from other NCIS agents, court papers show. Francis bragged about his ability to evade scrutiny a year later, even after NCIS opened a second criminal probe into his firm, the records show. In a 2011 e-mail to a colleague, Francis said the fraud cases were “hard to prove and charge. I have inside Intel from NCIS and read all the reports. I will show you a copy of a Classified Command File on me from NCIS ha ha.” Beliveau was arrested on bribery charges in September and is free on bond. Prosecutors said he surreptitiously downloaded law-enforcement files about the Glenn Defense Marine investigations from NCIS databases and shared the information with Francis over a period of two years, most recently in August. In exchange, court records allege, Francis plied him with prostitutes, money and travel expenses. One of Beliveau’s attorneys, Gretchen von Helms, said he had pleaded not guilty. “He’s an extremely honorable man. As the case proceeds through the court that will become clear,” she said.” Navy officials were especially sensitive about the potential for contract fraud after an unrelated kickback scandal erupted in 2011 in Rhode Island. Federal authorities there charged a Navy systems engineer and a defense contractor with bilking the Navy out of $10 million. In April 2011, Navy Secretary Ray Mabus announced the appointment of a special oversight panel to prevent future fraud cases. “We will not accept any impropriety, kickbacks, bribery or fraud,” he promised. Three months later, despite the ongoing investigations targeting Glenn Defense Marine, the Navy awarded Francis’s company three new contracts worth a potential $200 million over five years. The contracts were to resupply, refuel and provide a variety of other services — tugboat guides, food, trash removal and wharf security — to Navy ships during port visits across Asia. Prosecutors say Francis quickly exploited the deals by billing the Navy for inflated or invented expenses, often with the help of corrupt Navy officers. In October 2011, for example, Francis e-mailed Sanchez asking him to help “swing” a deal for Glenn Defense Marine to sell fuel to the USS Mustin during a visit to a port in Thailand, according to charging documents. “Ask and you shall receive,” Sanchez replied in an e-mail. “We worked this out this morning.” The Navy bought the fuel from Glenn Defense Marine for $1 million, the documents show, even though it would have cost less than half that figure on the open market. Navy officials said they did not have enough evidence to charge Francis or prevent him from procuring contracts until recently. The investigations “simply weren’t mature enough until very recently because he was being tipped off,” said a senior Navy official, speaking on the condition of anonymity because the case is ongoing. Francis was arrested in September in San Diego after investigators lured him to the United States in a sting operation. He remains in custody. His attorney, Edward P. Swan Jr., did not return a phone call Thursday seeking comment. Officials with Glenn Defense Marine have declined comment. Prosecutors from the U.S. Attorney’s Office in San Diego, which is leading the investigation, said in court papers that they are still assessing the scope of the alleged fraud but said it exceeded $10 million in just a handful of episodes.

Former Senate committee staffer charged in fraud case

A former Senate committee staffer was charged Thursday with cheating three women out of thousands of dollars — at least in part by using the prestige of his job to get loans that he did not fully pay back. Robert Lee Foster, 65, who formerly worked for the U.S. Senate Committee on Commerce, Science and Transportation, was indicted on nine charges of wire fraud in connection with various schemes, which prosecutors alleged in an indictment ran from 2008 through this month. According to the indictment, Foster, who worked for the Commerce Committee from 1969 to 2010, asked at least three women to borrow money for various reasons and never paid them back. The indictment lists nine payments that Foster received totaling $19,250, although prosecutors alleged in a news release that he took about $500,000. According to the indictment, Foster used his Senate position to win the women’s trust and targeted people who might be viewed as vulnerable. The indictment mentions, although it does not name, three victims: a 54-year-old Oxnard, Calif., woman whose husband of 25 years had recently died, a 70-year-old Denton, Tex., woman who had suffered a stroke and had a speech impediment and a 75-year-old District woman caring for a partner who suffered from dementia. Prosecutors alleged that Foster claimed at some point that he needed to borrow money to pay a debt so he could retire and at another point said that he needed funds because his credit card had been “hacked,” according to the indictment. Neither was true. Foster also falsely claimed that he needed money for litigation costs, business expenses and foreign travel, according to the indictment. Foster claimed that he would have access to large sums of money in the future, prosecutors said, but when he did pay off debts, he sometimes shuffled money from one victim to another. Jonathan A. Simms, Foster’s attorney, said that he had not had time to review the indictment, but he asserted that Foster was “a kindhearted businessman” who disputed the charges. He said Foster, who used to live in Falls Church, no longer resides in the Washington area. “As far as he’s concerned, these allegations are false and not true, and we look forward to exonerating him in the future,” Simms said. Simms said that Foster had received a letter about a month ago saying that he was the target of a probe and that he had been trying to negotiate with prosecutors to hold off on an indictment. “I don’t know what prompted them to bring these charges now and honestly I don’t believe that they feel confident in their position, based on conversations I’ve had with them,” the lawyer said. A Commerce Committee official did not return a phone message seeking comment. Court records show that Foster was summoned for an appearance in federal court in Alexandria on June 5.

Prosecutors say Maryland woman embezzled $5.1 million from D.C. nonprofit group

For the past five years, Ephonia Green has publicized her donations of wedding gowns to military brides, describing in interviews how she was moved to repay their service with her own goodwill by giving away 275 ensembles from her Upper Marlboro shop. Federal court records suggest how she may have been able to afford that: Since 2005, while working as a $56,000-a-year administrative assistant, Green allegedly stole $5.1 million from the Association of American Medical Colleges. The District-based nonprofit organization represents accredited medical schools and major teaching hospitals and administers the admissions test known as the MCAT. In a case thought to be one of the largest embezzlements from an area nonprofit group, Green is scheduled to appear Monday at a plea hearing in U.S. District Court in Washington. The charges against Green, 44, are contained in an eight-page “criminal information,” which can be filed in a felony case only with a defendant’s cooperation and signals that a plea agreement is near. Of the alleged loss, nearly $1.4 million was paid via 74 checks made out to Green’s bridal business, known as Couture Miss Bridal & Formal, court files show. Green’s attorney, William Brennan, declined to comment. The court document contends that Green enriched herself by registering company trade names and opening bank accounts in business names that closely resembled those of legitimate vendors to the association. At the association, Green had enough access to key financial systems that she was able to create fake invoices in the names of legitimate groups that she then approved for payment, the court files contend. And when the checks were ready, she had them returned to her, not sent to the vendors, prosecutors charge. Under that system, a spelling change of just four letters allegedly netted $3.7 million for Green when she purportedly created nearly 200 false invoices in the name of the well-known Brookings Institution policy center but deposited the checks into accounts she opened for her own “Brookings Institute.” Last month, a Washington Post investigation revealed more than 1,000 “significant diversions” of assets at nonprofit organizations discovered during a Post analysis of federal disclosure records filed by groups across the country. Many of the diversions identified by The Post were described as acts of theft and fraud carried out by insiders, contractors and investment advisers. Federal prosecutors filed charges swiftly in the alleged association theft, a break from some past embezzlements from nonprofit groups. Youth Service America, a national charity also based in the District, alerted authorities in 2009 that a former employee had stolen $2 million. But charges were not filed in that case until almost four years later, after The Post questioned prosecutors about the incident as part of its broad examination of theft from charities. The former employee pleaded guilty. The alleged years-long plot by Green unraveled in July when a bank withheld payment on a $113,000 check that Green was depositing — into an account she had set up two days earlier — and notified the medical colleges association, court records indicate. The amount matched a quarterly payment due to one of the association’s legitimate vendors — but the invoice number did not align with numbers the outside group used on its bills, said Frank Trinity, the association’s chief legal officer. Darrell G. Kirch, president of the association, said the group is experiencing “betrayal and profound disappointment” and that “the people who are closest to it have felt devastated.” Green started at the association in 1998 and worked in support positions where she chiefly handled the details of arranging large meetings for the group, Trinity said. After the tip-off from the bank, the association grew suspicious of more payments, Trinity said, before firing Green in July, calling federal authorities, alerting its board and hiring an outside attorney and forensic accountants. The internal investigation, Trinity said, suggested that Green began her alleged scheme modestly by submitting small, bogus bills to cover the registration fees of staff members supposedly headed to conferences. The alleged embezzlement ballooned starting in 2005, the criminal court files charge, until Green netted an amount that would be close to 90 times her salary. The criminal filing does not explain where all of the money went. The filing contends that some was used to cover an auto loan, some went to church donations and some paid for personal items. Other money helped pay expenses of the bridal shop that Green owned, court files state. Couture Miss brought Green attention as a “fairy godmother” to military brides, as some news accounts described her. On Saturday, the shop was open and busy. There were dresses in the display window and customers flipped through selections on tightly packed clothing carousels. Trinity said the association was unaware of Green’s television appearances touting her giveaways and learned of her business only after “doing some Googling” following the bank call about a questionable check. “I think they put a high priority on this case,” Trinity said of federal prosecutors. In a separate civil case, the association is asking a federal court to prevent Green and her husband from disposing of property including what the association said is their $1.1 million home in Upper Marlboro. The association has a $3 million insurance claim pending to try to recover some of its money, Trinity said. The group has tightened its accounting, auditing and vendor registrations, said Kirch, while acknowledging that “nonprofits have lacked some of the rigor that is enforced in for-profit organizations on monitoring finances.” Ann E. Marimow and Jennifer Jenkins contributed to this report.

Paul Ryan’s false claim that ‘because of Obamacare, Medicare is going broke’

Our eyebrows went up when we saw this quote from Ryan. It has been a bipartisan fallacy to claim that the old-age health program Medicare is going “broke,” which is incorrect for the reasons outlined below. But what was notable was he specifically blamed the Affordable Care Act for making Medicare go broke. That’s doubly wrong. Let’s explain. “Broke” is an informal way of saying “bankrupt.” Or, as the dictionary says, “penniless.” President Obama and Vice President Biden in the past have also used this word to the describe Medicare’s finances, so Ryan is certainly not alone in using this misleading phrasing.  But when politicians say “broke,” they are not talking about all of Medicare — just Part A, which covers hospital visits, hospice care, nursing facilities and the like. Part B, which involves seeing a doctor, is paid out of general funds and premiums, as is Part D. Thus, if costs rise, premiums can be adjusted. But Part A is financed mainly through payroll taxes of 1.45 percent on earnings paid both by workers and employers; self-employed people pay 2.9 percent. The money raised is then credited to a pay-as-you-go trust fund, which uses the revenue raised to pay the benefits of Medicare beneficiaries.    So it’s bad enough to claim that Medicare is going broke. Now let’s turn to Ryan’s claim that Medicare is going broke because of Obamacare. It’s just a very strange comment. The Affordable Care Act actually strengthened the near-term outlook of the Part A trust fund. The law includes a 0.9 percent payroll tax that hits the wages and self-employment income of wealthier Americans — above $250,000 per couple or $200,000 for a single taxpayer. That was estimated to raise an additional $63 billion for the Part A trust fund between 2010 and 2019. The law also was estimated to cut expenses, including $162 billion in productivity adjustments to provider payments and $86 billion in reduced payments to Medicare Advantage plans.    In fact, Republicans have vowed to repeal Obamacare, which would in turn make the trust fund’s situation instantly worse unless lawmakers found a way to make up the payroll tax revenue and program savings embedded in the Affordable Care Act. We asked Ryan’s office for specific examples of how Obamacare was making Medicare go broke. AshLee Strong, Ryan’s spokeswoman, responded with a general statement: “By creating a new entitlement, raiding Medicare, and expanding Medicaid, Obamacare is putting even more fiscal pressure on our current health care programs and threatening seniors’ access to care. It is obvious to anyone, either the program goes broke or the government starts rationing care. Neither is acceptable.” Medicare certainly faces financial stress as the baby-boom generation begins to retire in full force, but it’s important to get the facts straight. It’s bad enough that Ryan, like many politicians, uses imprecise rhetoric such as “broke”; that’s a Two-Pinocchio violation. But the House speaker really went off the rails when he said on national television that Obamacare is making the program go broke. That’s the exact opposite of what happened.

‘Sophisticated con artist’ faked cancer for taxpayer-funded abortion

In April, Chalice Renee Zeitner was convicted of fraud after faking cancer to secure a taxpayer-funded abortion.   Jurors didn’t bite. Nearly four months later, Zeitner, who was already incarcerated, has again been convicted of fraud in a separate case involving a veterans organization, the Republic reported. This week, Maricopa County jurors found the 31-year-old guilty of “two counts of fraud schemes, two counts of theft, and one count each of money laundering, identity theft and receiving an item obtained by fraudulent use of a credit card,” the paper reported, citing court records.  Prosecutors also accused Zeitner — under the guise of working with Veterans Hope and Armed Forces Racing — of contacting the Veteran Tickets Foundation and claiming she was planning a fundraising gala in Washington. According to the statement, she persuaded the nonprofit, which provides veterans discounted tickets to sporting events, arts activities and family events, to sponsor a placeholder on a race car that would be revealed at the gala. The sponsorship cost: $10,000. Zeitner gave the organization wire instructions that resulted in the money being deposited into a personal account, the statement said. In addition to the sponsorship fee, the Veteran Tickets Foundation spent several thousand dollars buying gala tickets through Zeitner’s personal PayPal account. Prosecutors accused Zeitner of using the funds to buy personal items. “The gala was not held and none of the funds were returned to the Veteran Tickets Foundation,” the statement noted. Zeitner assumed multiple identities as she carried out her scheme, including a Marine Corps veteran, a race-car driver and a South African lawyer, the Republic reported. The investigation was carried out by the Arizona attorney general and the FBI. Her sentencing is scheduled for Sept. 8 in Maricopa County Superior Court. “Individuals who prey upon the kindness of others for their own personal gain will be aggressively prosecuted by this office,” Attorney General Mark Brnovich said. “This case is a great example of law enforcement agencies working together to uncover the facts and make sure Zeitner is held accountable for her actions.”  The treatment, she told doctors, would remove tumors in her abdomen and lower spine, the statement said. Prosecutors would later claim that Zeitner falsified medical records and listed the name of a physician in those records who told investigators that he never treated Zeitner for cancer or even met her. Her sentencing in that case is scheduled for Aug. 12, the Republic reported, citing court records. “The evidence is clear that Ms. Zeitner made misrepresentations about her treatment,” prosecutor Scott Blake said, according to KSAZ. “Not that she believed that she had cancer, but clear misrepresentations.” “This is a sophisticated con artist, she knows when to turn it on and when to turn it off,” he added. “She clicked that switch. When it was time to grieve, she grieved.”

Medicaid health-care providers still paid by U.S. despite tax debts

Thousands of Medicaid health-care service providers were still paid by the government even though they owed hundreds of millions of dollars in federal taxes, congressional investigators say. A legal technicality is making it harder for the IRS to collect. In a report released Thursday, the Government Accountability Office said Medicaid payments to doctors, hospitals and other providers aren’t technically considered federal funds because they’re funneled through state health-care programs. Because of that glitch, the IRS can’t just shut off the payment spigot to collect tax debts. Investigators only looked at three states, so the full extent of the losses is even greater. One dentist, who received more than $100,000 from Medicaid while owing back income taxes, was spending money on fine dining, trips, spas, shopping and wine, the report said. In another case, a medical transport company received more than $1 million from Medicaid while owing millions in unpaid payroll taxes for its employees. Not paying the payroll taxes is a violation of federal law. Medicaid, a federal-state program that mainly serves low-income people, is the companion to Medicare, which primarily serves seniors. Although the IRS can block Medicare payments to scofflaw providers using a “continuous levy,” it is precluded by law from using the same strategy to go after Medicaid payments — even though the federal government pays about 60 percent of the costs of Medicaid. GAO investigators recommended that the IRS immediately reassess its policies to find more efficient ways of collecting back taxes from Medicaid service providers. Part of the problem seems to be coordination with states. In a formal response to the report, the IRS said it agrees that action is needed. Congress has an opportunity to close the loophole during budget deliberations after the elections. Sen. Tom Coburn (R-Okla.) said piles of unpaid taxes ought to raise a red flag about anybody doing business with the government. “People who cheat on their taxes show a clear disregard for the law, so they might be more likely to defraud Medicaid, or even harm patients,” Coburn said in a statement. “GAO’s findings raise serious questions about steps that need to be taken to improve the integrity of the Medicaid program.” Unpaid taxes are a persistent problem for the government, a tax gap of about $350 billion a year. Much of the money is considered uncollectable. GAO investigators scrutinized Medicaid providers, including doctors, hospitals and medical transport companies, in three large states: Texas, New York and Florida. In 2009, about 7,000 Medicaid providers who were paid a total of $6.6 billion by the program owed $791 million in unpaid taxes. They represented nearly 6 percent of all the Medicaid providers reimbursed by the three states, a fairly large proportion to be found delinquent considering that they were receiving income from a major government program. Advocates for the poor may complain that a tax crackdown will drive legitimate providers away from Medicaid. The program pays much less than Medicare or private insurance. But the GAO said that concern doesn’t justify continuing to tolerate the problem. “Even though Medicaid providers are relied on to deliver significant medical services to those most in need, payment of billions of federal dollars to those who do not pay their fair share of federal taxes raises questions about the integrity and fairness of the tax system,” the report said. “Given that we found over $6 billion of payments made to tax delinquent Medicaid providers in just three states, a more rigorous review . . . is warranted,” investigators concluded.

Yes, House Republicans, the heartless health-care vote will define you

We should never forget May 4, 2017. It should forever be marked as the day when the House of Representatives descended to a new level of cruelty, irresponsibility and social meanness. The lower chamber has always claimed to be “the people’s house.” No more. It should now come to be known by other names: the house of selfishness, the house of suffering, the house of the wealthy, the house of expediency, the house of untreated illness. Perhaps also: the house of Trump. The Anti-Health-Care Bill passed on Thursday bids to be the most remarkable redistribution of income in congressional history, from the poor and middle class to the very wealthy. An earlier version of the legislation, according to the Congressional Budget Office (CBO), would have thrown 24 million Americans off health insurance. This spiteful abomination is worse. Republicans from Speaker Paul D. Ryan (Wis.) on down, who complained that insufficient study was given to Obamacare (despite more than a year of debate), rushed this bill through without scrutiny or a CBO score. They thought that having no numbers would make it easier for them to conceal the damage it would do to the American people — and get away with it. But their lies will be exposed. They promised to improve Obamacare. Instead, they are bringing back the very problems that Obamacare actually fixed. One of the most popular provisions of the Affordable Care Act — supported by 87 percent of Americans in a March CNN/ORC poll — barred insurance companies from discriminating against those with preexisting conditions. This bill guts those protections. Were you born with a heart defect? You’re out of luck. Did you have an illness in your teens that might come back? Tough. Other victims hidden in the fine print include kids in special ed programs, which could face severe cuts in Medicaid funding. It gets worse. This bill would cut $880 billion over a decade from Medicaid, which provides health care to about 74 million Americans — the poor, the disabled, the elderly — and another $300 billion that now goes to helping those who cannot afford it buy health insurance. See why it’s the Anti-Health- Care Bill? Then the Republicans turn right around and plow roughly $595 billion of this money into tax cuts, mostly for the very wealthy. And that’s the real point. The initiators of this bill don’t care a whit about what they do to the health-care system or how their bill will endanger the lives of many Americans, including those of a lot of their own supporters. “Conservatism is something more than mere solicitude for tidy incomes,” Russell Kirk, one of the founding philosophers of modern conservatism, wrote in 1954. We can now say, 63 years later, that Ryan-style conservatism is _only_ about solicitude for tidy incomes. “This is who we are,” Ryan told his colleagues this week. “This will define us.” Yes, it will. So please, Mr. Ryan, have the decency to stop giving those speeches in which you tell us about the depth of your concern about the poor and how you became interested in poverty “at a young age.” No one who would risk throwing so many poor people off health insurance with those enormous Medicaid reductions to score a political victory can claim any real interest in the welfare of the neediest Americans. Stick to tax cuts. At least you have convictions about those. And then there is President Trump, who has absolutely no idea what’s in this bill and couldn’t care less. He hailed a measure that dumps people off the insurance rolls by saying that “we will have great, great health care for everyone in our nation.” And then he praised the Australian health-care system, which covers everyone and is the antithesis of the bill he had just praised. For the benefit of this empty man, House Republicans, you just sold your social consciences. It is said that the Senate will save House Republicans from the consequences of their craven heartlessness. No one should count on this in light of the hatred in the GOP for a law named after Barack Obama; the misguided fantasy that “the market” can cure whatever ails our health care system; the insatiable desire to keep shoveling money to the wealthiest Americans in tax relief; and the eagerness to slash and slash where programs for low-income Americans are concerned. On all these matters, pay heed to Paul Ryan: This is who they are. This defines them. And the rest of us should never forget it. _Read more fromE.J. Dionne’s archive, follow him on Twitter or subscribe to his updates on Facebook._ **Read more about this topic:** Alexandra Petri: The High-Risk Pool Dana Milbank: How did Congress go from compromise one day to toxicity the next? Trump. Jonathan Capehart: House GOP cheers health-care vote, ignores iceberg dead ahead

Selling votes is common type of election fraud

The price of one bona fide, registered American vote varies from place to place. But it is rarely more than a tank of gas. Indeed, as a rising furor over voter fraud has prodded some states to mount extensive efforts against illegal voters, election-fraud cases more often involve citizens who sell their votes, usually remarkably cheaply. In West Virginia over the past decade, the cost was as low as $10. Last year in West Memphis, Ark., a statehouse candidate used $2 half-pints of vodka. At the high end, corrupt candidates in Clay County, Ky., once paid $100. But that was probably too much: It attracted one woman who already had sold her vote. The man who bought it first was outraged, and he beat up the man who bought it second. It may still be possible to steal an American election, if you know the right way to go about it. Recent court cases, from Appalachia to the Miami suburbs, have revealed the tricks of an underground trade: Conspirators allegedly bought off absentee voters, faked absentee ballots, and bribed people heading to the polls to vote one way or another. What they didn’t do, for the most part, was send people into voting booths pretending to be somebody else. That little-used tactic has been targeted by new voter-ID laws, including the one in Pennsylvania, which will face a crucial legal test Tuesday. In real life, recent fraudsters tended not to bother with impersonating voters at the polls. Instead, they often found real voters to do their bidding. “I was in town one day at a local convenience store, and someone asked me if I wanted to make a little money on that day,” Charles Russell of Jackson, Ky., testified about how he agreed to sell his vote in a local primary election in 2010. “And I said, ‘Yeah.’ ” Russell was eventually promised $45 and given a slip of paper with names. Voter fraud, by any method, is still rare. A study by News21 — a consortium of journalism schools — found 867 cases since 2000 in which someone had admitted guilt or been convicted of a voter-fraud offense. That was out of about 146 million registered voters. But some kinds of fraud seem rarer than others. Just seven of these cases involved “voter impersonation” at the polls. Still, nine states have passed strict laws that require photo identification to vote. Four of the measures are held up by legal challenges, including the one in Pennsylvania. A state judge is expected to rule Tuesday on its fate. Supporters say these laws are a good idea, even if they might not have stopped much recent large-scale fraud. “If we can bring an additional layer of reasonable security measures that most people want, then why wouldn’t we do it?” said Catherine Engelbrecht, president of a Houston-based group called True the Vote. Her group has tried to find people using absentee ballots to vote in two states. “It is hard to quantify the scope of the problem [of voter impersonation], because our system is not designed to detect it.” In the past three years, six legal cases have laid out, step by step, ways that elections can be stolen. All involved local races, for positions such as magistrate, county clerk, mayor and state representative. Four took place in a traditional heartland of American vote-buying: Appalachia. “The first votes I ever bought, I paid a half a pint or a pint of liquor, whatever it was, for it. And then as time went on, $5 a vote, $10 a vote. I have paid as high as $800 a vote,” said Kenneth Day, a methamphetamine user and convicted criminal who was involved in a long-running vote-buying operation in eastern Kentucky. Wearing prison orange, he was testifying in a 2010 trial that sent eight others to prison. “Election after election, day in and day out,” Day told the court. “Every election I ever worked, it went on.” The $800 payment came, he said, when two factions engaged in an impromptu auction for one man’s vote. In the majority of these six recent cases, the fraud relied on absentee ballots, which can be filled out away from the prying eyes of election officials. The News21 database found 250 cases in which someone was convicted or admitted guilt in a case involving absentee ballots. In West Memphis last year, prosecutors said Hudson Hallum, a Democrat running for the state legislature, paid absentee voters with cash, whiskey and vodka and at least one with a chicken dinner. Hallum won his primary by eight votes, after taking 85 percent of the absentee ballots, and went on to win the general election. But it looked fishy, and it didn’t last. Hallum pleaded guilty and resigned his new seat in the state legislature last month. “While I ran for office for all the right reasons,” Hallum, 29, said in a statement, “in order to win the election, I made awful decisions.” In other cases, it wasn’t even necessary to pay. In 2010, for instance, Jerry Bowman, the sheriff of Lincoln County, W.Va., simply showed up at people’s homes and told them whom to vote for in local Democratic primary races. In some cases, he just filled out the ballot, according to a “stipulation of facts” that Bowman signed. Bowman didn’t pay a cent, prosecutors say. Apparently, having the sheriff in one’s home was motivation enough for many voters. “You can’t go into the voting booth with them, to see how they voted,” said Booth Goodwin, the U.S. attorney for southern West Virginia. “But in this one, you could sit right at their kitchen table” and be sure, he said. Bowman was trailing after the polls closed on Election Day but won after absentee ballots poured in. The plan began to unravel when investigators noticed that 100 absentee voters seemed to have the same handwriting. Bowman pleaded guilty in January. His attorney did not return phone messages. One recent case of alleged absentee-ballot fraud happened this past summer in Hialeah, Fla., outside Miami. Police say they were trailing a woman suspected of ballot fraud and saw her enter a nursing-home room. The patient inside was too ill to write, speak or comprehend what was said to her. But somehow, police said, the worker left her room with a completed absentee ballot. In the worker’s purse, they said, was a business card that hinted at a sideline filling out strangers’ absentee ballots. “When the ballot arrives,” it said in Spanish, “call me.” The worker pleaded not guilty to felony vote fraud. Prosecutors have not said which candidate she was working for. Absentee voting is allowed in all states, and 27 of them do not require a reason, such as illness or a trip out of state. Now, just four states — Kansas, Ohio, Pennsylvania and Wisconsin — have passed an ID requirement that applies to absentee voters. Often, these laws require absentee voters to submit something like a driver’s license number or a photocopy of a license. Absentee ballots are not the only way to fraudulently win an election. In Clay County, Ky., the vast fraud operation used poll workers, who told voters to leave their booths after one pass through the ballot. What the voters didn’t know is that there was a “review screen” that would allow them to change their choices. The poll workers scurried in and did that. Other fraudsters have used one of the oldest tricks in the book: bribing voters on their way to the polls. These conspiracies are still probably easier to pull off than voter-impersonation fraud, the kind feared by supporters of voter-ID laws. That’s because the bought voters, in these cases, are still real voters. There are no worries about election workers sniffing out fakes. But even with that advantage, it’s still not easy to steal an election. Take Charles Russell, the Kentucky voter who said he sold his vote for $45 in 2010. When Russell got into the voting booth, he realized he couldn’t vote for the man he was supposed to — a candidate for magistrate. Russell didn’t live in the right district. But he pretended. So afterward, he said, he still received an envelope containing cash. “You didn’t vote for him?” a prosecutor said, as Russell explained all this in court. “No,” Russell said. “But he wouldn’t have known that?” “No.” The candidate, Michael Salyers, testified that he spent close to $500 buying votes. He lost.

Federal Diary: U.S. attorney Machen takes aim at government corruption

U.S. Attorney Ronald Machen calls Kerry Khan “the ringleader of the largest bribery and bid-steering scheme in the history of federal contracting.” On Thursday, Khan, a former Army Corps of Engineers program manager, will be sentenced for his role in a bribery and money-laundering scam that involved more than $30 billion in bribes and kickbacks. From the spring of 2007 until he was arrested in October 2011, Khan was paid more than $12 million. But he can’t spend it now. He’s been incarcerated since his arrest. He pleaded guilty in May 2012 and could serve more than 15 years in prison for his crimes. Another former Army Corps program manager, Michael A. Alexander, got six years after pleading guilty to the kickback scheme last year. A third unnamed public official also was involved, as were others not in government. Khan is one of the biggest crooks in federal government corruption cases, but he’s certainly not alone. Since Machen took office in 2010, more than 125 people have been convicted on federal corruption charges. “Corruption generally is a priority of this office,” Machen said in an interview. While he’s probably better known locally for going after members of the D.C. Council, corruption among federal officials also keeps him busy. “It sounds like a cliche,” he said, “but it really does tear at the fabric of our democratic process.” It is a cliche. But when Machen talks about corruption, you have to believe it really eats at him. He leans forward in his chair and makes it clear that corruption will not be tolerated. “We attack it aggressively,” he said. A current case involves Michael Todd Sestak, a Foreign Service officer who was arrested in May for allegedly selling U.S. visas. Sestak worked in the U.S. Consulate in Ho Chi Minh City, Vietnam, where he was central to a scheme that charged applicants $20,000 to $70,000 for a visa, according to Machen’s office. Apparently, the target market was Vietnamese people who could not get visas honestly but were rich enough to pay big bucks to get here dishonestly. “Sestak received several million dollars in bribes in exchange for approving the visas,” a statement from Machen’s office said. “He ultimately moved the money out of Vietnam by using money launderers through off-shore banks.” Two other people, not federal employees, also were charged. Sestak’s attorney, J. Michael Hannon, had no comment on the case. In the past two years, Machen has racked up several guilty pleas and convictions of officials and contractors in federal corruption cases, including: ●Former U.S. represenative Jesse L. Jackson Jr. (D-Ill.). He will be sentenced in August for using campaign funds to pay for items such as fur capes, jewelry, appliances, furniture and cool stuff like Michael Jackson’s fedora. ●Mark Adams of Fort Washington, a former U.S. Agency for International Development contractor. In March, he was sentenced to 51 months in prison for embezzling more than $1 million from a global health program. His wife, Latasha Bell, also was in on the scheme involving bogus invoices for no work. ●Ramon S. Davila, a former contract background investigator for the Office of Personnel Management from Fredericksted, St. Croix, in the U.S. Virgin Islands. He pleaded guilty last month and was among 17 others who have been convicted during the past four years in cases involving falsified background checks of individuals seeking security clearances. ●James M. Woosley of Tucson, former acting director of intelligence for Immigration and Customs Enforcement in the Department of Homeland Security. A year ago, he was sentenced to 20 months in prison for a scheme involving fraudulent travel vouchers. Other federal employees and a contractor pleaded guilty to related charges — Ahmed Adil Abdallat, a former ICE supervisory intelligence research specialist; William J. Korn, a former ICE intelligence research specialist; Stephen E. Henderson, a former ICE contractor; and Lateisha M. Rollerson, a former assistant to Woosley. “We’ve done a lot in a lot of different areas, because we want to make sure that people understand that when they have an oath and obligation to the United States, they have to fulfill it,” Machen said. “And if they don’t, there’s going to be consequences.” He wants this message to get out: “If you engage in this sort of activity in D.C., it’s just not worth it, because they [his prosecutors] are very aggressive, they are very dedicated and they are very good at what they do in prosecuting these cases.” You know if that applies to you.● **Twitter:@JoeDavidsonWP ** Previous columns by Joe Davidson are available at wapo.st/JoeDavidson.

Murtha-favored contractors to plead guilty to defrauding Defense Department

Two brothers whose defense business flourished with the help of Rep. John P. Murtha (D-Pa.) plan to plead guilty next week to overbilling the Defense Department for their work and paying kickbacks to win business, according to their attorneys and court records. William and RonKuchera, who together owned Kuchera Defense Systems and Kuchera Industries in Windber, Pa., are accused by federal prosecutors of billing the military $650,000 for supplies they never provided and conspiring to inflate their bills for other military work. Murtha, a powerful Democrat who died in 2010 from an infection he contracted during a gallbladder surgery, had previously helped steer $50 million in earmarked funds and contracts to Kuchera-owned companies. The Kucheras and their employees donated a total of $106,000 to Murtha’s reelection campaigns. The Kucheras had been paid to provide supplies for the Ground Mobile Gateway System, a communication system the Air Force used to coordinate airstrikes requested by ground troops. A Florida businessman who won the prime contract for the project, which was awarded under a congressional earmark, pleaded guilty in 2009 to accepting a $200,000 kickback from the Kucheras in exchange for giving them part of the Ground Mobile Gateway supply business. The businessman, Richard Ianeri, said in his guilty plea that he won the Gateway contract as a result of hiring Murtha’s brother and told prosecutors he had been under political pressure to give some of the work to the Kucheras. The Kucheras also plan to plead guilty to claiming some of their costs as business expenses when they weren’t, including personal expenses such as a private airplane, hunting trips and keeping up the family’s private game preserve, the LBK Ranch, according to a court document. Prosecutors laid out the detailed claims against the Kucheras in a March 21 court filing called a criminal information. The document, which can be filed only with the parties’ agreement, signals that the defendants intend to waive indictment and plead guilty. Stan Levenson, Ron Kuchera’s attorney, said the brothers plan to plead guilty at a hearing scheduled for Tuesday in federal court in Johnstown, Pa. Levenson said Wednesday that the Kucheras had made mistakes but also had aided the national defense and had been good patrons in their community. He said he hoped the judge overseeing their sentencing would see that side as well. “I intend to make the court aware of the high quality and usefulness of the military products the Kuchera companies consistently provided to the government, as well as the many contributions and good works they’ve made to their community,” Levenson said. Before his death, Murtha had been one of the most powerful members of Congress and controlled no-bid defense contracts worth hundreds of millions of dollars each year as chairman of the House military appropriations subcommittee. He long showered earmarks on companies that donated to his campaign and opened headquarters or satellite offices in his financially struggling congressional district in central Pennsylvania. At the time of his death, Murtha was under an FBI investigation for steering work to companies that gave his campaign donations and agreed to hire his brother as a lobbyist. _Discuss this topic and other political issues in thepolitics discussion forums._

Here are the people investigating Russian meddling in the 2016 election

Special Counsel Robert Mueller has hired 16 attorneys to join his team looking at Russian meddling in the 2016 election and whether there was any collusion between the Kremlin and the Trump campaign. President Trump and his allies have criticized the team for some members' political donations, which have gone almost exclusively to Democrats. A spokesman for the special counsel would confirm the names of only 14 team members. Below is a look at who they are, and how much they have given to political campaigns over the years.  Quarles worked as an assistant special prosecutor on the Watergate Special Prosecution Force. He came with Mueller from the law firm WilmerHale. He donated more than $30,000 to various Democratic campaigns in 2016, including $2,700 to Hillary Clinton, though his giving dates back two decades. Quarles also gave $2,500 in 2015 to Jason Chaffetz (R-Utah), the chairman of the House Oversight Committee, and $250 to then-Sen. George Allen (R-Va.) in 2005.  Rhee is a former deputy assistant attorney general in the Office of Legal Counsel and assistant U.S. attorney in D.C. She also came from WilmerHale. Rhee donated a total of $5,400 to Clinton’s campaign in 2015 and 2016, and a total of $4,800 to the Obama Victory Fund in 2008 and 2011. She also made smaller donations totaling $1,750 to the DNC and to various Democrats running for the Senate.  Weissmann served as the chief of the Justice Department’s fraud section, where he oversaw corruption investigations, including the probe into cheating by Volkswagen on diesel emissions tests. Weissmann donated $2,300 to the Obama Victory Fund in 2008, $2,000 to the DNC in 2006 and at least $2,300 to the Clinton campaign in 2007. Records seem to indicate a duplicate donation on the same day, though Carr said Weissmann could confirm only one and would have to review records to assess whether the other might have been a recording error.  Goldstein headed the public corruption unit in the U.S. Attorney's Office in the Southern District of New York. He had worked there under Preet Bharara, whom President Trump fired as U.S. attorney after he refused to resign. Goldstein donated $3,300 to Obama's campaigns in 2008 and 2012.  Prelogar is a lawyer in the solicitor general’s office. She donated $250 each to Clinton’s campaign and the Obama Victory Fund 2016 and 2012.  Van Grack is a Justice Department national security division prosecutor. He donated $286.77 to Obama’s campaign in 2008.  Atkinson is a trial attorney in the Justice Department's fraud section. He donated $200 to Clinton’s campaign in 2016.   Federal records show he has made no political donations, though one by a man with the same name has been confused as having come from him.  Zebley is a former assistant U.S. attorney in the Eastern District of Virginia and served as Mueller’s chief of staff when Mueller was FBI director. He came with Mueller from WilmerHale. Federal records show he has made no political donations.  Page worked in the FBI General Counsel’s Office and had previously been a trial attorney in the Justice Department’s organized crime and gang section. Federal records show she has made no political donations.  Jed is an appellate lawyer from the Justice Department’s civil division. Federal records show he has made no political donations.  Zelinsky is an assistant U.S. attorney in Maryland. Federal records show he has made no political donations.   Federal records show she has made no political donations.  Andres is a white-collar criminal defense attorney at the Davis Polk firm. He had worked previously in the Justice Department's criminal division as a deputy assistant attorney general. He donated $2,700 to the campaign for Sen. Kirsten Gillibrand (D-N.Y.) this year and $1,000 to the campaign for David Hoffman (D) in 2009 when Hoffman ran unsuccessfully in Illinois for a Senate seat.

Colbert King: D.C. taxpayers on the hook for unpaid health bills

Former D.C. Council member Harry Thomas Jr.? Guilty. Former council chairman Kwame Brown? Guilty. Now a forthcoming guilty plea from former council member Michael Brown. The D.C. Hall of Shame keeps growing. Who’s next? Jeffrey E. Thompson, the alleged financier of a “shadow campaign” that benefited Mayor Vincent C. Gray in the 2010 Democratic primary, warrants attention from more than a federal grand jury and U.S. Attorney Ronald C. Machen. Taxpayers in the District should keep tabs. Thompson was also the sole owner of D.C. Chartered Health Plan, a business that had been the city’s dominant Medicaid provider, serving more than 100,000 low-income residents. It’s fair to say that the city’s health-care system has been compromised by the collapse of D.C. Chartered, which was forced into receivership last fall after auditors found financial irregularities and low funding reserves. A small army of local health-care providers have been saddled with unpaid claims. To keep the system afloat, the city government — and that means D.C. taxpayers — will have to make good on D.C. Chartered’s obligations. The list of District health-care providers and the amounts they are owed, as of May 31, is jaw-dropping. The top 10 providers and their claims: ●Children’s National Medical Center, $8,355,320 ●George Washington University Hospital, $6,175,576 ●Washington Hospital Center, $2,936,966 ●George Washington-Medical Faculty Associates (MFA), $2,559,645 ●United Medical Center, $2,169,570 ●Howard University Hospital, $2,139,818 ●Providence Hospital, $1,780,232 ●Children’s National Medical Center-MFA, $1,199,432 ●Georgetown University Hospital, $1,069,724 ●D.C. Fire Department, $973,223 That’s more than $29 million. And these entities aren’t the only providers that have been left holding the bag. In all, D.C. Chartered’s outstanding Medicaid claims amount to $42.9 million, according to Wayne Turnage, director of the D.C. Department of Health Care Finance. Records show that other debts include more than $3.7 million for medical group practices; $1 million for ambulance services; $646,979 for individual practitioners; and more than $5.3 million for contracted services such as pharmacies, labs, dentists, behavioral health and intensive case-management services. And, as if jeopardizing the local health-care system weren’t bad enough, the city-appointed receiver handling D.C. Chartered filed a lawsuit last week charging Thompson and the holding company he wholly owns — D.C. Healthcare Systems Inc. — with siphoning nearly $17 million from D.C. Chartered, as The Post’s Mike DeBonis reported. Make no mistake, Thompson’s operations hurt real people trying to do good things. (It should be noted that Thompson has not been charged with any crime.) A health-care provider in the District wrote to me after last week’s column comparing charitable groups and Thompson’s activities: “There is another group not mentioned in your column — the for-profit medical and dental providers who have provided sorely needed healthcare for needy residents in DC, especially east of the Anacostia River. Many of us do not have the deep pockets of Medstar and cannot afford the non-payment of health claims due to the demise of Chartered Health Plan and the machinations of the Gray administration which has not come forward with a solution. . . . The next time you hear about the dearth of healthcare providers east of the river from politicians, I am asking you to pointedly ask them, WHY IS THIS?” To say this provider’s complaint has fallen on deaf ears in city hall would be inaccurate. Gray announced in April that the city was devising a plan to bring relief to the providers stuck with unpaid bills. That intention was emphatically echoed in a telephone interview this week with a Gray administration official who is familiar with the city’s negotiations with D.C. Chartered’s appointed receiver and the federal government. The official, who spoke on the condition of anonymity, told me Wednesday: “We are working fast and furiously to reach an appropriate settlement with the receiver that would allow us to access federal dollars to pay 70 percent of the provider claims. We will have to use 30 percent of District taxpayer dollars to secure the federal match.” Gray, the official said, was “also very supportive of the receiver’s suit against Thompson to recoup some of the funds which appear to have been drained from Chartered inappropriately.” The D.C. attorney general’s office, the official said, “is also looking at its own suit against Thompson. “As distasteful as it is to have to spend any District dollars to pay for bills we think Chartered should have paid, leaving these providers — especially the smaller community-based providers who serve some of our most vulnerable residents — unpaid and at risk of shutting their doors is simply not an option,” the official said. So, Ron Machen, make room. Jeffrey Thompson is the District’s problem, too. _Read more fromColbert King’s archive._ **Read more on this from Opinions:** Colbert King: Will D.C.’s crooked politicians be called to account soon? Harold Meyerson: The District earns a page in campaign-finance secrecy The Post’s View: Mayor Gray’s tainted administration

Charles Lane: Medicare reform’s slow progress

As I reported in January, the publisher of the Wall Street Journal and others are suing to gain detailed access to Medicare billing records through the Freedom of Information Act. Off-limits to the public since 1979, such data could hold the key to billions of dollars in savings, once journalists armed with modern technology sift through it for evidence of waste, fraud and abuse. Doctors are fighting the lawsuit, claiming that their taxpayer-funded earnings are none of the public’s business. There’s still no ruling in the case, but readers I heard from unanimously backed the Journal. I didn’t receive one e-mail supporting the doctors. What I did get was a flood of first-person testimony about outrageous Medicare bills. One reader in Northern Virginia told me a supplier to his doctor had billed Medicare almost $230 for a hand brace that retails for $30.99. Another — Michael April, a specialist in physical medicine and rehabilitation in Montgomery County — wrote that Medicare reimburses power-wheelchair suppliers between $4,000 and $5,000 for a basic chair that costs the supplier $700 and sells for a retail price of $2,500. I decided to check these stories with the Centers for Medicare & Medicaid Servicesand other sources. What I found was a classic Washington good news/bad news story. The federal government is addressing some problems that readers noted, with significant results to show for its efforts so far. But the time and political effort it’s taken to get to this point does not bode well for future Medicare reforms. Most reader complaints revolved around inflated reimbursements for wheelchairs, oxygen tanks, beds and diabetes test strips, known in Medicare-speak as “durable medical equipment, prosthetics, orthotics and supplies” — DMEPOS. In fact, as a slew of inspector general and Government Accountability Office reports attest, excessive DMEPOS costs have plagued Medicare for years. Part of the problem was Medicare’s lax screening of suppliers, which attracted hundreds of swindlers to the business. But the real scandal was how much you could charge Medicare _legally_. Congress drew up the DMEPOS reimbursement schedule in 1989 based on mid-1980s economics and left it unchanged thereafter, except for sporadic inflation adjustments. In short, the law _required_ Medicare to overpay. The obvious solution was competitive bidding. But Washington doesn’t do obvious solutions, at least not immediately. Congress authorized two small five-year pilot projects in 1997. After those ended, it approved wider trials, to begin in 2007, in nine notoriously expensive metropolitan areas. Medicare didn’t start taking bids for this program until 2009, however, because industry complaints about inevitable operational hiccups caused Congress to vote for a delay. Meanwhile, between 2000 and 2010, Medicare spent $69.4 billion on DMEPOS, almost all of it based on the old, inflated reimbursement rates. One man’s absurd waste of taxpayer funds, however, is another man’s rice bowl. Organized into an effective lobby, medical equipment manufacturers and distributors resisted change. Some of the lobby’s arguments made sense and have been incorporated into policy: for example, that Medicare needed such simple anti-fraud measures as surety bonds for suppliers. Other industry arguments — that price competition would inflict cut-rate, low-quality products on the infirm — were more self-serving. In fact, Medicare saved $202.1 million in the year after its nine-market test finally took effect on Jan. 1, 2011. Monitors recorded a mere 151 complaints among 2.3 million patients and “no negative health care consequences.” A second, expanded phase of competitive bidding begins in July, encompassing 91 markets and most of the U.S. population. Obamacare expanded this from a planned 70 markets and mandates nationwide competitive bidding by 2016. Medicare’s easy money for distributing diabetes test strips, power chairs and the like spawned mom-and-pop operations across the country. Now some of them are going bust. That’s what happens when you stop subsidizing inefficient, low-volume dealers. That’s not good enough for the DMEPOS lobby or its allies on the Hill, including some ostensible foes of federal waste. A group of House members, led by such tea party stalwarts as Tom Price (R-Ga.) and Joe Wilson (R-S.C.), have filed an industry-backed bill to revamp the whole process until it’s more to the liking of these “small businesses” that live off government. Enough already. Congress should accelerate the planned introduction of nationwide competitive bidding on DMEPOS to 2014, and extend it to medical devices, lab tests and advanced imaging services by 2015, as recommended in a recent Center for American Progress report. The savings could total $38 billion over the next decade. Medicare is supposed to be a health-care program for seniors, not a cash cow. **_lanec@washpost.com_ ** **Read more from PostOpinions:** Charles Lane: Shining a light of Medicare payments Robert J. Samuelson: Taming the health-care monster? The Post’s View: Repairing Medicare Ruth Marcus: Taking health-care reform a step farther

Veterans Affairs improperly spent $6 billion annually, senior official says

The Department of Veterans Affairs has been spending at least $6 billion a year in violation of federal contracting rules to pay for medical care and supplies, wasting taxpayer money and putting veterans at risk, according to an internal memo written by the agency’s senior official for procurement. In a 35-page document addressed to VA Secretary Robert McDonald, the official accuses other agency leaders of “gross mismanagement” and making a “mockery” of federal acquisition laws that require competitive bidding and proper contracts. Jan R. Frye, deputy assistant secretary for acquisition and logistics, describes a culture of “lawlessness and chaos” at the Veterans Health Administration, the massive health-care system for 8.7 million veterans. “Doors are swung wide open for fraud, waste and abuse,” he writes in the March memo, which was obtained by The Washington Post. He adds, “I can state without reservation that VA has and continues to waste millions of dollars by paying excessive prices for goods and services due to breaches of Federal laws.” Frye describes in detail a series of practices that he says run afoul of federal rules, including the widespread use of purchase cards, which are usually meant as a convenience for minor purchases of up to $3,000, to buy billions of dollars worth of medical supplies without contracts. In one example, he says that up to $1.2 billion in prosthetics were bought using purchase cards without contracts during an 18-month period that ended last year. He also explains how VA has failed to engage in competitive bidding or sign contracts with outside hospital and health-care providers that offer medical care for veterans that the agency cannot provide, such as specialized tests and surgeries and other procedures. Frye says VA has paid at least $5 billion in such fees, in violation of federal rules that the agency’s own general counsel has said since 2009 must be followed. Frye alleges further violations in the agency’s purchase of billions of dollars worth of prosthetics and in the acquisition of a wide range of daily medical and surgical supplies. He says many products are bought without the competitive bidding and contracts essential to ensure quality care, effective use of tight dollars and proper government oversight. “These unlawful acts may potentially result in serious harm or death to America’s veterans,” Frye wrote. “Collectively, I believe they serve to decay the entire VA health-care system.” VA spokeswoman Victoria Dillon said in a statement that some of the care the agency pays for is not covered by federal acquisition law. She also said that the agency is trying to manage rapid growth in medical care administered by outside providers, with authorizations for outside medical care jumping 46 percent in the first four months of 2015 over the same period last year. Dillon said VA officials are urging Congress to pass legislation that would allow an “expedited form of purchasing care” for veterans who need to go outside the VA system. She said the bill “would also resolve legal uncertainties that have arisen” regarding the use of purchasing agreements other than those required by federal acquisition regulations. VA has been under intense pressure to provide adequate care to the surge of veterans returning from the wars in Iraq and Afghanistan, but Frye makes clear in his memo that the agency’s violations of purchasing law have been going on for years and that senior leaders have had many opportunities to revamp their practices. He discloses his repeated efforts to raise his concerns with other senior officials at the agency but says he was consistently ignored. He also accuses top agency officials of deceiving Congress when they were asked about questionable practices. VA operates one of the largest health-care systems in the country, spanning 150 hospitals and more than 800 outpatient clinics. The agency has been struggling to serve not only the veterans returning from Iraq and Afghanistan, but also a surge in veterans who served in the 1960s and 1970s. VA has been rocked since last year by revelations about long wait times for veterans seeking treatment for health issues including cancer and post-traumatic stress disorder. McDonald’s predecessor, Eric K. Shinseki, resigned as VA secretary last year after a coverup of months-long hospital wait times became public, and Congress has given the system $10 billion in new funding to ramp up private medical care. On Thursday, Frye will have a chance to explain his concerns directly to lawmakers. He is scheduled to testify before the House Veterans’ Affairs Committee about waste and fraud in the purchase card program. Frye, 64, is a retired Army colonel who has overseen VA’s acquisitions and logistics programs — one of the federal government’s largest — since 2005. In his role as the agency’s senior procurement executive, he is responsible for developing and supervising VA’s practices for acquiring services and supplies, but he is not in charge of making the purchases. A former Army inspector general, he has held senior acquisition positions over 30 years in government. Some of his concerns were previously flagged by VA’s inspector general, who has reported for years that weak contracting systems put the agency at risk of waste and abuse. Thousands of pharmaceutical purchases were made without competition or contracts in fiscal years 2012 and 2013, often by unqualified employees, investigators found. And according to documents that have not been made public, the inspector general’s office has warned VA repeatedly that its use of purchase cards needs better oversight. For the most part, Frye does not explain why the rules are so widely flouted. But he suggests, in this discussion of purchase cards, that the reason may be laziness. He calls these payments an “easy button” way of buying things. Frye told McDonald he became aware in 2012 that government purchase cards were being used improperly by VA. About 2,000 cards had been issued to employees who were ordering products and services without contracts, Frye recounts. He said his concerns grew after learning that a supervisor in New York had recorded more than $50 million in prosthetics purchases in increments of $24,999 — $1 under the charging limit on each card. In a response to a member of Congress who inquired about the purchases, Shinseki had few answers. “No contract files exist” and “there is no evidence of full and open competition,” Shinseki wrote in the letter, a copy of which was obtained by The Post. Purchase cards, Frye says in his memo, can be a sufficient means of acquiring goods and services for “micro-purchases” up to $3,000. Above that limit, the cards can be used for payment only if there is a certified invoice linked to a properly awarded contract. Frye’s concerns about payments for outside medical services are rooted in the reality that VA hospitals do not have the resources or specialists to provide all the treatment veterans require, such as obstetrics and joint replacements. For these services, VA normally refers veterans to a list of doctors or labs in their area. The agency, Frye says, is required to identify providers through a competitive process and contract with them to ensure that the government pays reasonable prices and gets the best value and quality. And contracts help ensure veterans are legally protected if they get poor care or if a medical procedure goes wrong. But according to Frye’s account, VA spent about $5 billion on outside medical care in both 2013 and 2014 in the absence of contracts, and such practices “extend back many years.” “Based on my inquiry in January 2013, [the Office of the General Counsel] confirmed in writing the fact VHA was violating the law,” Frye says. Large medical systems similar to VA order many supplies in bulk through a list of approved vendors, identified through a competitive process, to ensure quick delivery for the best price. But VA’s system for these “just-in-time” purchases is deeply flawed, and this is yet another way that the agency wastes money, Frye says. He writes that there are many types of supplies that are not covered by these arrangements. Instead, they are ordered off the shelf, without competition and for higher prices, from a “shopping list” containing 400,000 items, “indiscriminately and not in accordance” with acquisition laws.

House Democrats: Congress should investigate anti-Planned Parenthood activists, too

Two high-ranking House Democrats are calling on their Republican counterparts to end their congressional investigations of Planned Parenthood -- or at least expand them to encompass alleged misdeed by antiabortion activists who put the group's fetal tissue practices in the spotlight. Rep. John Conyers (Mich.), top Democrat on the House Judiciary Committee, and Rep. Elijah Cummings (Md.), top Democrat on the House Oversight and Government Reform Committee, said in a letter to the Republican chairmen of those committees that the undercover videos that sparked the investigations are unreliable and may have been obtained by illegal means, calling on them to "halt these one-sided investigations immediately." Judiciary Committee Chairman Bob Goodlatte (R-Va.)  announced Wednesday that the committee's first hearing would take place next week, titled, "Planned Parenthood Exposed: Examining the Horrific Abortion Practices at the Nation's Largest Abortion Provider." Two other committees -- Oversight, and Energy and Commerce -- are also expected to conduct hearings in the coming weeks, as congressional Republicans press an effort to strip Planned Parenthood of federal funding once the fiscal year lapses  Sept. 30. [ _Parade of Planned Parenthood hearings begins next week_]    *[WSU]: Wayne State University   *[Tue]: Tuesday   *[Wed]: Wednesday   *[UNM]: University of New Mexico Conyers and Cummings take aim at the practices of the Center for Medical Progress, the antiabortion activist group that gathered undercover video over the course of months capturing Planned Parenthood executives speaking coarsely at times about the group's practices of harvesting fetal organs and tissue for medical research. The activists allege that Planned Parenthood has broken federal laws against selling fetal tissue and against conducting "partial birth" abortions. Planned Parenthood has strongly denied any wrongdoing, and last week, it alleged that the videos released by the Center for Medical Progress were incomplete and deceptively edited. The group has also gone to court in California to prevent the release of footage it says was illegally recorded at a conference of abortion providers there. Conyers and Cummings contend in the letter that they have seen "no credible evidence that [Planned Parenthood] has done anything unlawful" and that the congressional investigations cannot proceed "based on the potentially illegal actions of a radical anti-abortion group that has admitted to falsifying documents, lying to their own contributors, and deceptively editing secretly-recorded videos in a three-year crusade against Planned Parenthood." "Millions of women across the country rely on Planned Parenthood for critical health services, and they should not be denied their rights under the law and the Constitution based on the Center for Medical Progress's warped -- and ultimately unsuccessful -- effort to entrap Planned Parenthood," they write. They continue: "However, if you choose to move forward, we request that our committees also investigation the actions of David Daleiden and his organization, the Center for Medical Progress, which -- in contrast to Planned Parenthood -- may have violated numerous state and federal laws in their clandestine effort to roll back the rights of millions of women across the country who rely on the legal and critical health care services provided by Planned Parenthood every day." A Republican Judiciary Committee aide said in response that "it is Congress’ responsibility to investigate Planned Parenthood because this organization receives significant funding each year from the federal government." "While Planned Parenthood and its allies would like to shift the focus onto the group that performed the undercover investigation, it does not change the barbaric findings of the Center of for Medical Progress, an organization that, to my knowledge, receives no federal funding," the aide said. The Center for Medical Progress has dismissed Planned Parenthood's allegations that the tapes were unfairly manipulated, calling them a "desperate, 11th-hour attempt to pay their hand-picked 'experts' to distract from the crimes documented on video."

Prosecutors say two drug executives hoped to ‘ride into the sunset.’ Instead, they are charged with fraud.

Former executives of Valeant Pharmaceuticals International and the specialty pharmacy Philidor Rx Services have been charged with fraud in what prosecutors allege was a multimillion-dollar scheme to create business ties between the two companies.  "We allege these two men participated in a fraudulent scheme to illegally use Philidor as, essentially, a vehicle for personal profit and self-dealing," U.S. Attorney Preet Bharara told reporters. "As alleged, these two men purported to be arms-length business counterparts… but they were in fact, we allege, partners in crime.” Gary Tanner, a former Valeant executive, was charged along with Andrew Davenport, former chief executive of Philidor, with working together to defraud Valeant by fostering a deal that cost its shareholders nearly $300 million. Jonathan Rosen, an attorney for Davenport, said that his client was committed to patient service. "Mr. Davenport earned his success with integrity and hard work and will vigorously defend himself and his good name," Rosen said in an e-mail. An attorney for Tanner did not immediately respond to a request for comment. According to the complaint, Tanner promoted Philidor's business within Valeant and received payments from Philidor in return. He is alleged to have set up a fake email account under the name "Brian Wilson" to exchange with Davenport information on shell companies that were to be used to transfer millions of dollars for personal gain, as well as to provide advice to Davenport. Prosecutors allege Tanner used the money to invest $2 million in his retirement account, buy a home, pay off a credit card and student loans and fund his brokerage account. In total, $9.7 million was transferred by Davenport to a shell account controlled by Tanner, according to the complaint.  "Can picture our butch and sundance ride into the sunset," Davenport wrote to Tanner's alias email account. Tanner replied that the email "gave me a good chuckle when I just saw it. Will have to keep playing the game :)." In the complaint, Redel said he believes the exchange meant Tanner would "keep pretending to act solely in Valeant's interest, while in fact advancing" their personal interests.   Valeant and its relationship with Philidor, a mail-order pharmacy that has since closed, has been under intense scrutiny. The complaint provides rare insight into how the relationship between the companies became so close -- and show that unnamed senior executives were concerned about Tanner's relationship with Philidor. According to the complaint, Valeant executives had asked Tanner, who was senior director of the access solutions team, whether he had a financial interest, which he allegedly denied. They also asked him to expand the company's relationship to other specialty pharmacies. But Tanner failed to follow through on those requests, according to the complaint. He is alleged to have promoted Philidor to his bosses while also helping Davenport behind the scenes. When Philidor was due to reach a $25 million milestone payment, for example, Davenport forwarded an email to Tanner's alias account that said, "Let's get the wires loaded up and ready to launch!!!" And when that payment was delayed, Davenport followed up with an email with the subject line "$$$," apparently asking for advice on how to get final approval for the milestone payment, according to the complaint. Bharara said that the investigation is continuing and declined to expand on how the relationship between the two companies may have helped support high drug prices. Peter Maybarduk, director of consumer advocacy group Public Citizen’s Access to Medicines Program, said in an e-mail that the charges were a win for consumers. "The alleged Valeant-Philidor relationship is, like so much pharma fraud, a purposeful criminal strategy to keep our medication prices high," Maybarduk said. "We applaud the Department of Justice for bringing charges against pharma executives who rip off consumers."

The pill mill doctor who prescribed thousands of opioids and billed dead patients

A former Michigan doctor who ran a pill mill for 16 months, distributing tens of thousands of narcotics and controlled substances to people who didn't need them for medical purposes, has agreed to pay $200,000 to settle a federal lawsuit that accused him of, among other things, falsifying records to charge dead patients, subjecting patients to unnecessary tests and billing for office visits that never happened. The settlement was announced Wednesday, amid National Heroin and Opioid Awareness Week, and came nearly four years after Hussein Awada, 46, was accused of defrauding Medicare, Medicaid and Blue Cross Blue Shield of about $2.3 million. He was charged in December 2012 of unlawful distribution of a controlled substance and conspiring to commit health care fraud. Awada pleaded guilty and was sentenced last November to seven years in federal prison. In 2013, a separate civil lawsuit accused him of defrauding government programs — a violation of the False Claims Act. The lawsuit was filed in federal court in Michigan. Investigation into Awada began in 2011, after his former receptionist alerted the Drug Enforcement Administration about his medical practice. From 2010 to early 2012, federal prosecutors said, Awada wrote prescriptions, without any medical justification, for 80,000 doses of Oxycodone, Roxicodone and other painkillers to groups of patients who were recruited by a marketer. The marketer, James Lyons, then bought the pills from the patients he recruited and resold them to street drug dealers. Court records said Awada also required new patients to undergo unnecessary tests and procedures, such as ultrasounds, blood work and X-rays, even before they'd been examined by a doctor. Awada then billed Medicaid for those procedures. In some cases, Awada falsified records to bill Medicare for services that either never happened or were provided to patients who had died. A witness told investigators that Awada once said "I know X-rays are a pain, but they are our money maker, what pays your check," according to a criminal complaint. During Awada's sentencing hearing last November, Assistant U.S. Attorney Lynn Helland said he contributed to Michigan's opiate epidemic. "He contributed in a very large way for a period of at least two years," Helland said, according to a transcript of the hearing. "He did that as a doctor with a license, who, of all people, should have known the impact his prescribing was having on a broader community." Aside from the prison sentence, Awada also was ordered to forfeit his assets to help pay $2.3 million to the government, according to the Justice Department. That's separate from the $200,000 he agreed to pay to settle the civil lawsuit. "This settlement demonstrates that doctors pay a substantial price when they seek to profit by prescribing medically unnecessary prescription drugs and services that may harm their patients," Barbara McQuade, U.S. attorney for the Eastern District of Michigan, said in a news release. Awada's attorney, Steve Fishman, said his client has paid nearly all of the $2.3 million in restitution. Had a settlement not been reached in the civil case, Awada would have been required to pay more than $4 million in damages, Fishman said. "Dr. Awada wanted to settle the False Claims Act lawsuit so that when he comes home and goes back to work, he will not have this hanging over his head," Fishman said. Awada, whose license was revoked, had been a medical doctor since 2002. Fishman said Awada, who owned a clinic in Warren, Mich., can try to get his license reinstated after he has served his sentence. Lyons, the marketer with whom Awada conspired, was sentenced to four years in prison. During his sentencing hearing, Awada said he was ashamed of his actions. "I assume full and complete responsibility for my actions. I deeply regret the shame I have brought to my family. I just put them through so much pain," Awada said, according to a transcript of the hearing. "I apologize for the patients who I may have caused harm and who I have hurt by these actions."  The settlement was announced one day after Attorney General Loretta E. Lynch spoke in Kentucky about the urgency of the opioid epidemic. "What we face is not just a law enforcement crisis or a public health crisis," she said. "We face a moral crisis — a test of whether we in the United States can protect our children, our friends, our neighbors, and our fellow citizens from the scourge of addiction." The opioid epidemic, she said, "erodes opportunity and diminishes public safety. It undermines our communities and tears at the fabric of our common life as Americans." "Addressing this crisis is about helping our neighbors," she added. "It’s about looking after our friends. It’s about saving our children. It’s about taking care of our own. And that’s who we are as Americans – that’s what we do in times of turmoil.

Man used dating Web sites to swindle elderly victims, federal prosecutors allege

A Maryland man was arrested Thursday on charges that he and other conspirators used dating Web sites to identify elderly men and women, then defraud them out of tens or hundreds of thousands of dollars. Federal prosecutors say that Krist Koranteng, 32, worked with four other people to lure at least three victims into romantic relationships, using Match.com and Chemistry.com. The conspirators then convinced the victims to send money to accounts controlled by Koranteng. The alleged conspirators gave the victims many reasons to send money: They would invest it in gold. They needed to pay hospital bills for sick relatives. They would spend the money on plane tickets to come visit the victims, with whom they had formed romantic relationships via e-mail, phone conversations and text messages. The stories worked, prosecutors say. The indictment states that a victim who lived in West Virginia and Ohio deposited $22,000 in October 2012 into an account controlled by Koranteng. The same woman then transferred $90,000 to the account in February 2013, $80,000 in March and $250,000 to another account in April. The indictment says that Koranteng sent her roses for her birthday in November, as well as e-mails around the same time to reassure her that the gold she had invested in was real. In December, she sent a check for $65,000. The indictment says that another victim in Cleburne, Tex., deposited $30,500 in an account controlled by Koranteng, and a victim in British Columbia sent more than $30,000 by wire transfer. Koranteng was arrested by Montgomery County police in January and charged with theft of more than $100,000. At that time, police seized $7,694 from him. The Circuit Court charges were dropped so that federal prosecutors could pursue their case, said Ramon Korionoff, a spokesman for the county state’s attorney’s office. Since January, police have seized a total of more than $290,000 from 17 accounts, the indictment says. The four co-conspirators named in the indictment have not been charged. Koranteng’s attorney declined to comment. Koranteng is scheduled to appear in court again Monday. Get updates on your area delivered via e-mail

U.S.: Indictments are just the start of FIFA scrutiny

NEW YORK — Attorney General Loretta E. Lynch and other U.S. law enforcement officials launched a sweeping effort to clean up corruption in world soccer that she termed “rampant, systemic and deep-rooted” Wednesday, indicting 14 influential figures in the globe’s most popular sport on racketeering and bribery charges. In a series of remarkable scenes, FBI agents raided international offices in Miami Beach, while Swiss authorities working with the United States escorted some of the game’s highest dignitaries from a five-star hotel in Zurich, where they were meeting, and detained them for extradition. Officials from the Justice Department, FBI and IRS jointly announced the indictments of nine officials from soccer’s world governing body, known as FIFA, and five sports executives at a news conference at the U.S. attorney’s office for the Eastern District of New York. The 47-count indictment spelled out how $150 million in bribes were allegedly solicited by FIFA officials for vote-rigging to send events to certain countries or steer business to various companies. Officials emphasized this is just the start of their investigation. Among the subjects of ongoing scrutiny, the law enforcement officials said, are banking institutions through which bribes flowed and sponsors who may have participated in alleged kickback schemes. The indictments contain 75 references to “co-conspirators.” “The beautiful game was hijacked,” FBI director James Comey said. “The defendants fostered a culture of corruption and greed that created an uneven playing field for the biggest sport in the world. Undisclosed and illegal payments, kickbacks and bribes became a way of doing business at FIFA.” In colorful detail, the indictments described officials at the very top of the game engaging in more than two decades of relentless corruption, including an alleged $10 million bribe to award the 2010 World Cup to South Africa with that government’s cooperation and a FIFA official passing out envelopes stuffed with $40,000 in cash to buy votes in the 2011 FIFA presidential election. It also outlined bribes for lucrative media and marketing rights for World Cup qualifiers and other events. According to Lynch, one FIFA official alone received $10 million in bribes. U.S. officials said they are working in close cooperation with the office of the Swiss attorney general, which announced its own related though separate criminal investigation into suspicion of money laundering, criminal mismanagement and “unjust enrichment” around FIFA’s controversial awarding of the 2018 World Cup to Russia and the 2022 World Cup to Qatar. Swiss authorities seized electronic data and documents from FIFA headquarters in Zurich. Rumors of corruption have swirled around the awarding of the World Cup to both countries; last year the Times of London reported to a parliamentary committee that it had information that Russia won the bid partly by giving away artwork from its state collection. A FIFA internal report on the bid process written by former U.S. prosecutor Michael Garcia was suppressed, and Garcia has disavowed FIFA’s summary of his work. Russian foreign ministry spokesman Alexander Lukashevich expressed unhappiness with the investigation, calling it “another case of illegal extraterritorial application of U.S. laws” in a statement on the ministry Web site. “We hope this will in no way be used to tarnish the international football organization in general and its decisions.” Officials from FIFA, the French abbreviation for Federation Internationale de Football Association, were rousted from their rooms by Swiss agents at the luxurious Baur Au Lac hotel on the banks of the Zurich canal, where they had congregated for their annual meeting. They were taken away in police cars while at least one hotel staffer tried to shield the proceedings by holding up a white bed-linen. According to U.S. law enforcement, among those in custody were FIFA vice president and executive committee member Jeffrey Webb of the Cayman Islands, FIFA vice president and executive committee member Eugenio Figueredo of Uruguay, FIFA executive committee member-elect Eduardo Li of Costa Rica, and officials of the Nicaraguan, Venezuelan and Brazilian football organizations. They face up to 20 years in prison if convicted of racketeering. IRS criminal investigation chief Richard Weber said at the news conference, in which officials seem to vie for the best sound bite, “This is really the World Cup of fraud.” The FIFA annual congress is expected to reelect its 79-year-old president, Joseph “Sepp” Blatter, to a fifth term Friday with little opposition, though Blatter appeared Wednesday to lose the backing of traditional football power Brazil, which called for the vote to be postponed. The Swiss-born Blatter has been the head of FIFA since 1998 and wields enormous international influence, given his control over the immensely popular World Cup and its related revenues, which in 2014 amounted to $4 billion. Blatter is not named in the indictments, and U.S. officials declined to comment on whether he is a subject of their ongoing investigation. Blatter said in a statement that he and FIFA are cooperating with authorities. “As unfortunate as these events are, it should be clear that we welcome the actions and investigations by the U.S. and Swiss authorities and believe that it will help to reinforce measures that FIFA has already taken to root out any wrongdoing in football,” it read. The U.S. indictments allege a pattern of chronic corruption in FIFA that dates back 24 years. Among the charges are that an unnamed FIFA official arranged to pay members $40,000 apiece simply to hear his pitch to become FIFA president in 2011 at a meeting in a Hyatt Regency in Trinidad and Tobago. The payments were allegedly coordinated by former FIFA vice president Jack Warner, a member from Trinidad and Tobago who resigned in 2011 and is among those indicted. Warner is quoted telling the bribed FIFA members, “There are some people here who think they are more pious than thou. If you’re pious, open a church, friends. Our business is our business.” They also allege that Warner collected a bribe for arranging a soccer event by sending a member of his family to Paris to collect a briefcase packed with cash in $10,000 bundles. Warner issued a statement Wednesday denying the charges. However, at the same time it unsealed the indictments, U.S. law enforcement announced that four individuals and two corporate defendants already have pleaded guilty to charges as part of the investigation. They included Warner’s sons Daryll and Daryan Warner, as well as Brazilian sports marketer Jose Hawilla and former FIFA official Chuck Blazer of the United States. Blazer’s guilty plea and apparent cooperation with U.S. law enforcement seem to have been the most important building block in the investigation — and will have the largest ramifications for other FIFA officials who have something to fear from the U.S. and Swiss investigations. Blazer was for many years the most powerful American in soccer, a member of the FIFA executive committee from 1996 to 2013 and the former general secretary of CONCACAF, the regional federation of FIFA that oversees soccer in North America, Central America and the Caribbean. Blazer admitted to 10 counts of tax evasion, racketeering, wire fraud and money laundering. Contained in the information documents against him are descriptions of how bribes were solicited and distributed at the highest committee-member levels of FIFA, including “bulk cash smuggling.” The Blazer documents describe a $1 million bribe paid by a Moroccan official to a FIFA executive committee member in hopes of securing the 1998 World Cup and a series of bribes to steer media and marketing rights to the CONCACAF Gold Cup. Blazer was also involved in negotiations to accept bribes from Morocco and South Africa over the 2010 World Cup site. Steven Goff in New York, Karoun Demirjian in Moscow and Michael E. Miller, Fred Barbash, Brian Murphy, William Branigin, Cindy Boren and Marissa Payne in Washington contributed to this report. **Read more:** A powerful organization and a popular sport are shaken On Soccer: FIFA’s powerful world shaken by indictments, arrests In shadow of scandal, U.S. women stay focused on World Cup FIFA says there are no plans to revist World Cup votes The arrests spark glee on Twitter Editorial: FIFA’s ugly stains on the beautiful game Graphic: Breaking down the charges How the U.S. can arrest FIFA officials in Switzerland Nike is implicated in corruption scandal Can FIFA’s Sepp Blatter survive this scandal?

GSA probe focuses on conference contractor

The inspector general investigating lavish spending by the General Services Administration has told federal prosecutors an outside event planner violated ethics laws while helping to organize a conference at a swank Las Vegas hotel, according to government sources. Investigators also want to know whether Michael W. Jahn, managing partner of Location Solvers, violated bribery laws by giving gifts to several GSA employees in excess of the government’s $20 limit, according to government sources, e-mails and transcripts of interviews conducted by the inspector general’s office. The gifts, which would have been illegal for the employees to accept, included regular deliveries of flowers, concert tickets and free hotel rooms, sources said. Location Solvers, based in Washington, describes itself on its Web site as a “premier hotel search firm” that finds sites for meetings, conventions, retreats and guest rooms. Among the clients it lists are the Department of Homeland Security. The GSA is not included. In 2010 the GSA hired the company to select 14 hotels as venues for conferences and other agency functions, according to a briefing that Inspector General Brian Miller gave agency leaders. One of the hotels was the M Resort and Casino in Las Vegas, where the Public Buildings Service hosted a four-day meeting in 2010 that was investigated by Miller’s office. Jahn, 42, did not return numerous phone calls and e-mails seeking comment. Billed as team-building for 300 employees, the 2010 Western Regions conference featured private parties, a mind-reader, a talent show, extravagant food spreads and other entertainment. The cost to taxpayers was $823,000. Location Solvers is one of numerous vendors — including a company that provided audio-   visual services for $59,000 and one that offered a bike-building exercise for $75,000 — whose services for the Las Vegas event were not competitively bid, as federal rules require. Asked at a congressional hearing last week if he is looking into possibly illegal relationships between vendors and conference organizers, Miller said, “We’re looking at all of those things.” He also said he is investigating possible bribery and kickbacks in the agency. Federal employees cannot solicit or accept gifts over $20 from any entity doing business with their agency, or use their position to induce someone to provide a benefit to them, their friends or relatives. The GSA, like most federal agencies, has several full-time planners who find hotels and arrange conferences and other events. But when Lisa Daniels, a national event planner for GSA, set out in 2009 to find a Las Vegas hotel for the conference, she sought the services of Location Solvers, according to transcripts. The transcripts are of interviews with Jeffrey Neely. Neely, the senior GSA executive hosting the conference, wanted an “over the top” event that would best past conferences, the inspector general noted in a report this month. Minutes after posting a solicitation for the conference event online, Daniels contacted Jahn, a friend with whom she had done business, to let him know, according to the transcript. Jahn immediately telephoned the sales staff at the M Resort and said he had a lead on a government conference scheduled for October 2010, according to an investigator in the Neely transcript. Daniels eventually signed a contract with the hotel that included catering, audio-visual services and other incidentals. Jahn was entitled to a commission of 10 percent on what the government spent, paid by the hotel. Over several months of planning that included eight scouting and pre-planning trips to Las Vegas at a $130,000 cost to taxpayers, Jahn acted as a matchmaker between GSA and the hotel, according to government sources and e-mails. Jahn was paid a commission of $12,601.50, which was added to the conference catering bill of $146,527. The inspector general criticized the arrangement: “The M Resort’s willingness to pay over $12,000 as a finder’s fee strongly indicates that further discounts might have been available to GSA if [the agency] had contacted the hotel directly, rather than working through Location Solvers,” Miller concluded, calling the use of an outside event planner “redundant and wasteful.” Location Solvers’ commission was not written into the hotel contract, according to the transcripts. Daniels, reached at her home in Fort Worth, referred calls to her attorney, Michael Ware, who had not responded to a request for comment as of yesterday evening. Daniels is one of 10 civil servants, including Neely, who have been placed on administrative leave pending further discipline. On one pre-planning trip to Las Vegas, Neely augmented his event staff with 50 managers for a meeting of his “leadership team.” Neely told the investigator he wanted to “try on the resort for size.” The cost was $54,000. Jahn was key to getting the 50 managers to the M Resort. “Hi Patty” he wrote to an event planner in May 2009, according to an e-mail obtained by The Washington Post. “Do you have anymore updates on the leadership meeting?” “I’d like to strike while things are hot with M Resort,” Jahn wrote to an event planner in May 2009, according to an e-mail obtained by The Washington Post. “Lisa returned the contract last week plus I have a couple other monster meetings with M pending. It’s a give and take — and right now I’m giving so it’s time to take . . . and when I said take I mean, ‘take your group for November with upgrades, concessions, etc . . . etc.’ ” A month earlier, an event planner gushed to Jahn about the room he got her on a scouting trip. “Michael, I meant to email you last week to tell you about the room at the M,” she wrote. “Honestly, it was unbelievable. The living room area had this wonderful view of the strip which was especially beautiful at night. . . . It was so spacious, I hosted a get together for my staff one evening. Thank you so much for the arrangement, amazing!” A hotel spokeswoman declined comment. Before the first scouting trip in March 2009, Jahn e-mailed the hotel to say a GSA employee would be staying a night before the travel days for the trip and did not want to pay the $435 room price. The employee “needs a friend of a friend of the owner rate, (wink)” Jahn wrote. According to government sources, among his other gifts to GSA staff were tickets to a Cher concert at Caesars Palace, which started at $95 and went to $250. Jahn also arranged room discounts for a GSA event planner at another Las Vegas hotel and organized a discounted birthday party there for the woman’s daughter. “An inappropriate relationship with a hotel would be to go to the hotel and ask for favors that benefit the individuals personally,” Miller told lawmakers last week. “It’s inappropriate to negotiate with vendors for personal benefits. That would be — you’re not allowed to use your office for personal gain.” Location Solvers was accredited with the Better Business Bureau on March 27. Since then the company has received no consumer complaints.

New York Assembly Speaker Sheldon Silver arrested on federal corruption charges

Federal agents on Thursday arrested powerful New York Assembly Speaker Sheldon Silver (D) on federal corruption charges, stemming from payments he received from two New York City law firms. Jennifer Queliz, a spokeswoman for the U.S. Attorney’s office in the Southern District of New York, confirmed Silver was in custody Thursday morning. U.S. Attorney Preet Bharara held a press conference announcing the charges Thursday afternoon. Silver is charged with five counts of fraud and conspiracy, according to court documents filed Wednesday. Prosecutors allege he used his position to take more than $6 million in bribes and kickbacks, which he masked as legitimate income earned as a lawyer over 15 years. “Silver took advantage of the political pulpit to benefit from unlawful profits,” FBI Special Agent Richard Frankel said in a statement. “We hold our elected representatives to the highest standards and expect them to act in the best interest of their constituents. In good faith, we trust they will do so while defending the fundamental tenets of the legal system. But as we are reminded today, those who make the laws don’t have the right to break the laws.” The documents allege Silver received $1.4 million in salary from the law firm of Weitz & Luxenberg based on his official position as assembly speaker, rather than for work he performed, and $3.9 million in attorney referral fees. Prosecutors say Silver steered $500,000 in state funds to an unnamed doctor for research; the doctor in turn steered asbestos cases to the firm. The New York Times, which first reported the impending arrest on Wednesday evening, said Silver turned himself in to FBI agents in Lower Manhattan.    *[WSU]: Wayne State University   *[Tue]: Tuesday   *[Wed]: Wednesday   *[UNM]: University of New Mexico “I hope I’ll be vindicated,” Silver said Thursday as he arrived at FBI offices, according to the Times. Silver, a Manhattan Democrat who has served as speaker of the state assembly since 1994, has been under federal investigation over payments he received from a small law firm, Goldberg & Iryami, that specializes in New York City real estate taxes. Investigators said Silver failed to disclose the payments on annual financial disclosure filings. Silver also faces charges in connection with that case, although the firm isn’t named in charging documents. It is referred to as a “Real Estate Law Firm.” Marcia Horowitz, a spokeswoman for Weitz & Luxenberg, said the complaint shows the firm was not involved in wrongdoing. “The Firm, which has fully cooperated with the Government in this matter, was not aware of any improprieties whatsoever,” Horowitz said in an e-mail. Bharara said Silver’s alleged actions were indicative of a larger culture of corruption in Albany, where Silver has served since winning election in 1974. “The show-me-the-money culture of Albany has been perpetuated and promoted at the very top of the political food chain. And as the charges also show, the greedy art of secret self-reward was practiced with particular cleverness and cynicism by the Speaker himself,” Bharara said. “Politicians are supposed to be on the people’s payroll, not on secret retainer to wealthy special interests they do favors for. These charges go to the very core of what ails Albany – a lack of transparency, lack of accountability, and lack of principle joined with an overabundance of greed, cronyism, and self-dealing.” The Times reported the investigation grew out of Gov. Andrew Cuomo’s (D) decision to shut down an anti-corruption commission, known as the Moreland Commission, last March. As assembly speaker, Silver is one of the three most powerful people in Albany. He was easily re-elected speaker by his colleagues earlier this month even after news of the FBI investigation broke. New York state law requires anyone convicted of a felony to resign from office.

Business digest: GM’s Barra draws pointed questions from Senate panel

Federal authorities on Thursday charged FedEx with assisting illegal pharmacies by knowingly delivering painkillers and dangerous drugs to customers without prescriptions. The indictment, filed in federal court in San Francisco, alleges that FedEx conspired with two related online pharmacies for 10 years, ending in 2010. The Justice Department wants FedEx to forfeit $820 million the department says the company earned by assisting the illicit pharmacies. The Memphis-based delivery company is accused of shipping the powerful sleep aid Ambien, anti-anxiety medications Valium and Xanax, and other drugs to customers who had no legitimate medical need and lacked valid prescriptions. FedEx insists it did nothing wrong. The company says it handles 10 million packages a day and shouldn’t be in charge of “assuming criminal responsibility” for every delivery. “We will plead not guilty. We will defend against this attack on the integrity and good name of FedEx and its employees,” company spokesman Patrick Fitzgerald said in a statement. The Justice Department alleges that federal officials have been telling FedEx since 2004 it was shipping dangerous drugs without prescriptions. The indictment also alleges that FedEx couriers in Kentucky, Tennessee and Virginia warned executives about suspicious drug deliveries. **— Associated Press** Lawmakers grilled General Motors chief executive Mary Barra on Thursday about the role of her company’s legal department in GM’s failure to respond to a deadly ignition switch defect for more than a decade. An internal GM investigation made public last month found that some GM officials knew about the ignition switch problem for years before it was publicly divulged, but the probe found no wrongdoing by the company’s top executives. Barra, who took over as chief executive at the start of this year, has said she has fired 15 employees, including some company attorneys, in connection with the safety scandal. Testifying Thursday before a Senate subcommittee, Barra defended the company’s general counsel, Michael Millikin, against calls from several senators that he too should be dismissed. In his own testimony, Millikin told the Senate panel that his subordinates had not informed him about possible punitive damages the company could face as a result of the ignition switch problem. In a particularly tense exchange with Barra, Sen. Claire McCaskill (D-Mo.), the head of the subcommittee, demanded to know why Millikin had been allowed to keep his job, calling his lack of knowledge about the issue “either gross negligence or gross incompetence.” Barra rose to Millikin’s defense. “He is the person I need on this team. He had a system in place. Unfortunately, in this instance it wasn’t brought to his attention,” she said. **— Rebecca Robbins** Two influential members of Congress demanded Thursday to know why the Department of Homeland Security recently awarded a contract worth up to $190 million to USIS, a company facing a Justice Department lawsuit that accuses it of defrauding the government. In a letter to DHS, Rep. Elijah E. Cummings (D-Md.) and Sen. Tom Coburn (R-Okla.) said they wanted to know why the department awarded the company the contract despite the lawsuit and requested a briefing from Secretary Jeh Johnson. “The purpose of our inquiry is to determine whether the Department considered this billion-dollar fraud suit against USIS before awarding the company a new government contract worth hundreds of millions of dollars,” Cummings said in a statement. “If not, we want to know why not, and whether legislative reforms may be necessary.” USIS has long performed much of the work on background checks used by the federal government in granting security clearances. The suit, which was initially brought by a whistleblower and later joined by the Justice Department, alleges that USIS “dumped,” or submitted incomplete background checks, in 665,000 cases in order to hit revenue targets. In a statement, USIS said that it was awarded the DHS contract “after a rigorous two-year competition.” The company also said the division that won the contract “is not involved in the background investigation business and has not been linked in any way to the ongoing government investigation.” The contract, awarded July 1, involves field support services related to DHS’s immigration system. DHS did not immediately respond to a request for comment. **— Christian Davenport** **— From news services**

Fraudulent ambulance rides: Medicare paid more than $50 million, IG says

Medicare paid more than $50 million in potentially improper bills from ambulance companies for rides for older Americans, government investigators said Tuesday. The payments included $30 million worth of ambulance rides over a six-month period despite an absence of evidence, based on Medicare records, that the patients received any care where they were taken, according to a report by the inspector general for the Health and Human Services department. The report also identified another $24 million in payments for rides to and from doctors’ offices and other destinations for which Medicare does not cover ambulance services.    *[WSU]: Wayne State University   *[Tue]: Tuesday   *[Wed]: Wednesday   *[UNM]: University of New Mexico Together, one in five of the nearly 16,000 ambulance services nationwide that transported Medicare patients had at least one type of questionable bill, the investigators found. Questions of wasteful and fraudulent spending have long dogged the federal entitlement program, which insures about 50 million elderly and disabled Americans. Republicans often cite Medicare as part of their drumbeat of criticism of improper federal expenditures. And in recent years, spending on ambulance bills has appeared to be a problem spot. Previously, government investigators found that Medicare’s spending on ambulance services doubled to $5.8 billion between 2003 and 2012. The new findings are based on an analysis of Medicare’s billing records for 7.3 million ambulance rides in 2012. The findings suggest that “inappropriate and questionable billing for ambulance transports continues to pose vulnerabilities” to Medicare’s financial integrity, the report concludes. Under Medicare’s Part B rules, which cover outpatient care, ambulance rides are allowed when other kinds of transportation would endanger a patient’s health and when a patient is traveling to or from a hospital, nursing home or several other kinds of medical facilities. The inspector general’s inquiry found that bad billing by ambulance companies remains concentrated in certain parts of the country, with slightly more than half of the questionable bills coming from Philadelphia, Los Angeles, New York and Houston. And for companies with an especially large share of problematic bills, the average distance billed for ambulance transport in urban areas was 34 miles – more than three times the average trip for Medicare patients in urban areas. In the case of rides for which Medicare had no accompanying bills for medical services, the report concludes that “the transports may not have occurred” or that patients received services that the program does not cover – and that therefore did not justify an ambulance transport paid for by the program. The Centers for Medicare and Medicaid Services, an agency within HHS, “is pursuing a comprehensive strategy comprising of several initiatives to combat ambulance transport fraud and abuse,” said spokesman Aaron Albright. In the past two years in Houston and Philadelphia, he said, the agency has blocked new ambulance services from participating in Medicare. And under an experiment to try to control fraud, the agency now requires advance permission in Pennsylvania, New Jersey and South Carolina for repetitive ambulance rides in cases that are not emergencies.

Jeffrey Thompson’s guilty plea reveals a plot that subverted D.C. democracy

WHAT IS the District scandal really about? It is not, as it might seem, a simple tale of skirting campaign finance laws. It is more fundamental and more insidious. D.C. businessman Jeffrey E. Thompson, having amassed great wealth from government contracts, illegally used some of the proceeds to subvert the election process and install officials who would, in turn, be even more helpful to his business interests. That a lion’s share of the public dollars were aimed at providing health care to the city’s poor makes the double- dealing all the more despicable. As documents submitted to a federal court Monday show, Mr. Thompson spent hundreds of thousands of dollars in 2006 in an effort to elect a mayor to his liking. His candidate lost, so he tried again in 2010. This time, his favored candidate, Vincent C. Gray (D), won. Months into his mayoralty, Mr. Gray approved a multimillion-dollar settlement of a contract dispute that repaid Mr. Thompson with interest. Mr. Gray says the settlement was made on the merits. He maintains that he was unaware of the illegal “shadow campaign” that Mr. Thompson financed on his behalf. He says that Mr. Thompson — and presumably several witnesses who are expected to corroborate Mr. Thompson’s story — are lying. U.S. Attorney Ronald C. Machen Jr. has a different view. “Today’s guilty plea pulls back the curtain on years of widespread corruption,” he said after Mr. Thompson pleaded guilty Monday to two felonies as part of a plea arrangement with the federal government. Prosecutors detailed how Mr. Thompson secretly channeled more than $3.3 million in illegal contributions to more than 25 candidates running for local and federal offices. In 2006 he spent $350,000 to induce Michael A. Brown (D) to drop out of the mayor’s race and another $411,000 on behalf of Linda Cropp (D), then the D.C. Council chair. (Prosecutors do not allege that Ms. Cropp was aware of the illegal efforts.) Despite his best efforts, she lost and Adrian M. Fenty (D) was elected. Mr. Thompson’s worries about a Fenty administration were realized when the city sued his firm for excessive expenses, winning a settlement in 2008 that called for a $12 million payment to the city and an additional $5.25 million in charitable contributions. So when, as detailed by prosecutors, Mr. Gray and his associates came calling in 2010 to see if Mr. Thompson would support a Gray candidacy, he was happy to oblige. He spent more than $660,000 on a shadow campaign and reimbursed straw donors to the official campaign in an effort that helped turn Mr. Fenty out of office. Mr. Thompson supported Mr. Gray, federal prosecutors wrote in court filings, on the expectation that his election would improve the business climate for D.C. Chartered Health Plan, Mr. Thompson’s company, which had a $300 million annual contract with the city. In its first year in office, the Gray administration approved a $7.2 million payment to his company that had been nixed by the Fenty administration. Mr. Gray told The Post’s Aaron C. Davis he doesn’t recall Jeanne Clarke Harris, a former Thompson associate who also has pleaded guilty, asking him on Mr. Thompson’s behalf to expedite the settlement but, “putting that aside for a minute, what if she had? Is that illegal?” That’s one of the questions that has yet to be answered by Mr. Machen’s office. **Read more on this issue:** The Post’s View: Will Mayor Gray come clean after ‘Uncle Earl’s’ plea? The Post’s View: Mr. Gray owes voters an accounting Colbert King: Good Gray, bad Gray? D.C. corruption scandals: A primer Robert McCartney: Mayor Gray should explain or resign

Ex-Virginia doctor Nibedita Mohanty accused of running deadly ‘pill mill’

Under the guise of treating chronic pain, a doctor in Stafford, Va., ran a “pill mill” that led to a patient’s fatal overdose, according to an indictment in federal court in Alexandria. Hundreds of patients of Nibedita Mohanty, former chief of medicine at Stafford Hospital, were given excessive prescriptions for addictive medications despite warnings that the drugs were being abused, distributed and resold, a grand jury concluded. Mohanty, 56, served as hospital chief from June 2009 to February 2013, according to the indictment, and represented herself as a doctor working in chronic pain management. She prescribed narcotic pills to patients who had been jailed for selling controlled substances and even to someone who, she was explicitly told, would sell the drugs to pay another patient’s bond, the indictment alleges. It says that when urine tests showed that several patients were not taking the medications they were prescribed or were taking illegal drugs, she gave them new prescriptions anyway. Although a letter from another doctor warned that one patient had a history of painkiller addiction and was attempting to stay off of them, Mohanty gave her prescriptions for OxyContin, Percocet and Dilaudid, the indictment alleges. After the patient was hospitalized for an overdose, Mohanty discharged her and, less than two weeks later, prescribed more painkillers. The patient died of an oxycodone overdose the next day. Mohanty “rapidly and randomly increased the dosages” of patients’ drugs, according to the indictment, inducing them to regularly pay $250 cash for appointments. She installed a swimming pool in her home, paying in cash. She “rarely, if ever, counseled her patients regarding alternative treatments, such as physical therapy, psychological or addiction counseling, or surgery,” the indictment alleges. Mohanty was indicted on one count of participating in a drug trafficking conspiracy to distribute and dispense controlled substances; one count of distributing and dispensing a controlled substance resulting in the death of a patient; two counts of distributing and dispensing controlled substances resulting in serious bodily injury; 38 counts of distributing and dispensing controlled substances; two counts of aiding and abetting health-care fraud; and one count of aiding and abetting money laundering. She faces a mandatory minimum sentence of 20 years in prison and a maximum penalty of life imprisonment and a $10 million fine should she be convicted of the most serious charges. Mohanty was arrested in May of 2013 after an investigation launched by the Stafford County Sheriff’s Department and assisted by Virginia State Police and the FBI. Her home and office were raided in January and her medical license was suspended in April, officials said. Last September, she surrendered her license for three years. Get updates on your area delivered via e-mail

Stop the vendetta against Planned Parenthood

THE STING videos targeting Planned Parenthood are hard to watch. Doctors talk clinically, some say callously, about harvesting fetal tissue. Technicians identify and isolate tiny organs. References are made to “it’s a baby” or “it’s another boy.” The videos were taken surreptitiously and were artfully edited to produce maximum discomfort about complicated issues that, for many, are inherently uncomfortable. That truths were distorted to paint an inaccurate and unfair picture of a health organization that provides valuable services to women — as well as to demonize research that leads to important medical advances — doesn’t matter to antiabortion activists. Or, sadly, to the politicians who pander to them. Planned Parenthood is under virulent attack for the role a small portion of its affiliates play in helping women who want to donate fetal tissue for medical research. The antiabortion group Center for Medical Progress has orchestrated a propaganda campaign accusing the nation’s largest provider of abortions of profiting from the illegal sale of fetal tissue, a charge refuted by Planned Parenthood. None of the videos released shows anything illegal and, in fact, the full footage of Planned Parenthood executives meeting with people presumed to be buyers for a human biologics company include repeated assertions that clinics are not selling tissue but only seeking permitted reimbursement costs for expenses. Indeed, the Colorado clinic featured in the videos refused to enter into a contract with the phony company because of its failure to meet its legal and ethical standards. Such facts, though, haven’t stopped officials in several Republican-led states, including Texas, Louisiana and Ohio, from launching investigations of Planned Parenthood, even though affiliates in those states don’t facilitate fetal tissue donations. In Washington, Senate Republicans have fast-tracked a bid to defund Planned Parenthood, with a vote set for Monday. Fortunately, it’s unlikely there will be 60 votes to advance the bill, as cutting off funds to Planned Parenthood would be irresponsible. No federal money is used by Planned Parenthood to provide abortions except in some rare exceptions. So cutting off government funds, mostly through Medicaid and grants, would only hurt the thousands of people, most of them low-income women, who each day depend upon Planned Parenthood for birth control, cancer screenings, testing and treatment for sexually transmitted infections and other health services. Given that many of the clinics are in medically underserved areas, it’s a myth, as Republicans claim, that other providers can fill the gap. Shutting down clinics would make it harder for many women to obtain birth control — and the last thing either side of the abortion debate should want is an increase in unwanted pregnancies that result in more abortions. We are under no illusions that the vendetta against Planned Parenthood will end. Conservative Republicans are already threatening to shut down the federal government in the fall by blocking any spending that includes money for Planned Parenthood. It’s clear from how quickly Republican presidential hopefuls seized on the issue that it will be a staple of the campaign trail. Consequently, it’s important that congressional Democrats and others continue to stand up for Planned Parenthood and the women whose health depends upon its services. **Read more on this issue:** Dana Milbank: Senate Republicans accidentally promote abortion Cecile Richards: These extremist videos are nothing short of an attack on women Jo-Ann Armao: Don’t rush to judge Planned Parenthood Michael Gerson: Planned Parenthood video shows an appalling trivialization of life

Rep. Corrine Brown indicted on fraud charges, DOJ alleges charity used as a ‘slush fund’

Rep. Corrine Brown (D-Fla.) and her chief of staff have been indicted on federal corruption and fraud charges related to her role in an allegedly fraudulent charity scheme. In the 24-count indictment released Friday, Brown and her chief of staff, Elias “Ronnie” Simmons, of Laurel, Md., face charges of  conspiracy, mail and wire fraud, and filing false tax returns. The pair are accused of participating in a scheme to solicit more than $800,000 in donations for the One Door for Education scholarship fund that were instead used “for personal and professional benefit,” including the use of luxury boxes at a concert and a football game in the D.C. area, according to the Justice Department. The government alleges that despite this cash haul, One Door only distributed two scholarships totaling $1,200 to cover college expenses. Assistant Attorney General Leslie R. Caldwell said in a statement that Brown and Simmons used the donations as a “personal slush fund.” “Corruption erodes the public’s trust in our entire system of representative government,” Caldwell said in a statement. “One of the department’s most important responsibilities is to root out corruption at all levels of government and to bring wrongdoers to justice.” Brown and Simmons pleaded not guilty on Friday in a Jacksonville federal court, according to the Associated Press.  A spokesman for Brown did not reply to a request for comment from The Washington Post.  “The indictment alleges that Brown, Simmons and Carla Wiley, the president of One Door, among others, the vast majority of One Door donations for their personal and professional benefit, including tens of thousands of dollars in cash deposits that Simmons made to Brown’s personal bank accounts,” the department said in a release. “In one instance, Simmons is alleged to have deposited $2,100 in One Door funds into Brown’s personal bank account the same day that Brown wrote a check for a similar amount to pay taxes she owed.” The pair are set to appear before a federal judge in Jacksonville at 1 p.m. Friday. Earlier this year the House Ethics Committee began a separate official probe into Brown’s actions. That panel is still investigating.

Senior officer, NCIS agent are among those arrested in Navy bribery scandal

The U.S. Navy is being rocked by a bribery scandal that federal investigators say has reached high into the officer corps and exposed a massive overbilling scheme run by an Asian defense contractor that provided prostitutes and other kickbacks. Among those arrested on corruption charges are a senior agent for the Naval Criminal Investigative Service and a Navy commander who escaped Cambodia’s “killing fields” as a child only to make a triumphant return to the country decades later as the skipper of a U.S. destroyer. The investigation has also ensnared a Navy captain who was relieved of his ship’s command this month in Japan. The chief executive of the Singapore-based defense contractor, Glenn Defense Marine Asia, and another company official were arrested last month at a San Diego harborside hotel after federal investigators lured them to the United States by arranging a sham meeting with Navy officials, according to court records and people involved in the case. The unfolding investigation is shaping up as the biggest fraud case in years for the Navy. Federal prosecutors allege that Glenn Defense Marine, which has serviced and supplied Navy ships and submarines at ports around the Pacific for a quarter-century, routinely overbilled for everything from tugboats to fuel to sewage disposal. Investigators are still assessing the scope of the alleged fraud, but federal court records filed in San Diego cite a handful of episodes that alone exceeded $10 million. Since 2011, Glenn Defense Marine has been awarded Navy contracts worth more than $200 million. The company also services ships from several navies in Asia. The U.S. military has never been immune from contracting scandals, but it is extremely rare for senior uniformed commanders to face corruption charges. “Allegations of bribery and kickbacks involving naval officers, contracting personnel and NCIS agents are unheard of,” said retired Adm. Gary Roughead, a former chief of naval operations who is a distinguished visiting fellow at the Hoover Institution at Stanford University. Roughead recalled meeting the chief executive of Glenn Defense Marine, Leonard Glenn Francis, nearly a decade ago while serving as commander of the U.S. Pacific Fleet. He said he was unfamiliar with details of the investigation, but he called the allegations “extremely serious, disconcerting and surprising.” According to court papers filed by federal prosecutors in San Diego, Francis and others in his company targeted Navy personnel serving in Asia and plied them with prostitutes, cash, luxury hotel rooms, plane tickets and, on one occasion last year, tickets to a Lady Gaga concert in Thailand. In exchange, Francis sought inside information on ship deployments and pressed at least one high-ranking commander to steer aircraft carriers and other vessels to ports where his firm could easily overcharge the Navy for pierside services, the court documents allege. Francis’s defense attorney, Edward Patrick Swan Jr., declined to comment on the allegations but said he expects the government will file additional charges. “I think this is just the opening,” he said. Federal prosecutors in San Diego declined to answer specific questions. But Laura E. Duffy, the U.S. attorney for the Southern District of California, said the investigation was continuing. “The allegations described in this complaint describe a bribery case with all the sexy elements of a TV drama,” Duffy said in an e-mailed statement. “But the significance of the case is that it involves huge sums of money, a wide range of players, a long period of time and a number of countries.” In May 2010, according to court papers filed by federal investigators, Francis and an unnamed manager from his firm “began targeting” Cmdr. Michael Misiewicz, a graduate of the Naval Academy in Annapolis, “as someone who might be susceptible to providing favor . . . in return for things of value.” Misiewicz was born Vannak Khem in Cambodia, but he was adopted as a 6-year-old by a U.S. Embassy worker. He moved to Illinois in 1973, just before Cambodia plunged into a bloody communist revolution. In December 2010, as commander of the USS Mustin, Misiewicz returned to Cambodia for the first time in 37 years as the destroyer made a port visit in Sihanoukville. Although Misiewicz had lost his father and a sister in the killing fields — an estimated 1.7 million people died at the hands of the Khmer Rouge — other long-lost relatives boarded the ship for a tearful reunion. About the same time, Misiewicz was forging a close relationship with Glenn Defense Marine, court papers allege. Shortly after the Cambodia visit, the commander took an influential job as deputy operations manager for the Navy’s 7th Fleet, overseeing all naval activities in the western Pacific and Indian oceans. In March 2011, according to court documents, Francis hired four prostitutes to entertain Misiewicz and another unnamed Navy commander during a three-day visit to Singapore. The trip was postponed because of a tsunami. But Glenn Defense Marine officials soon became more familiar with Misiewicz and e-mailed one another about how the commander “liked Japanese women.” They later provided tickets and female escorts for Misiewicz and four co-workers to attend the Lady Gaga concert in Thailand and paid for shore leave in Singapore and other cities, according to court records. “Take care gents, thank you for the best leave (w/o kids that is) ever!” Misiewicz, a married father of four, wrote in an e-mail to Francis and another company official after a visit to Cambodia in June 2011, according to court documents. In his e-mails, Misiewicz fondly called Francis “Big Bro” — the executive is 6-3, weighs 350 pounds and is known in Navy circles as “Fat Leonard,” the court papers say. Francis in turn called Misiewicz “Little Bro,” reflecting how the commander stood nearly a foot shorter and almost 200 pounds lighter. In exchange for prostitutes, travel and other favors, federal authorities allege, Misiewicz provided Francis with classified information about ship movements and steered vessels to specific Asian ports. Misiewicz was arrested Sept. 16 by Defense Criminal Investigative Service agents at the Colorado Springs airport. The commander has been assigned to the U.S. Northern Command in Colorado since leaving the 7th Fleet last year. He was released on $100,000 bond and confined to home detention pending trial. His attorney, Wendy Gerboth of San Diego, did not return a phone call or e-mail seeking comment. Court papers make references to other, unnamed Navy officers who accepted favors from Francis, an indication that the investigation remains in its early stages. Navy officials have identified Capt. Daniel Dusek, former commander of the USS Bonhomme Richard, as another target of the investigation. He has not been charged, but the Navy relieved him of command Oct. 2, citing the investigation. Dusek, who remains under suspension, declined to comment through a Navy spokesman. The Naval Criminal Investigative Service has opened multiple investigations into Glenn Defense Marine since 2010. Until last month, none had resulted in charges. Court documents allege that Francis was receiving regular tip-offs from inside the agency about the state of investigations. The information, prosecutors say, was being supplied by John B. Beliveau II, a onetime NCIS agent of the year, who was arrested at Joint Base Anacostia-   Bolling in Southeast Washington on the same day that Misiewicz was taken into custody. Beliveau is the supervisory agent in charge of the NCIS office in Quantico. Prosecutors have charged him with conspiracy to commit bribery, saying he fed Francis confidential information about pending criminal investigations into Glenn Defense Marine from March 2011 until shortly before both were arrested. In return, according to charging documents, Francis supplied Beliveau with prostitutes and free travel, including a three-week trip to five Asian countries. Court records show that Beliveau met Francis when he was stationed in Asia with the NCIS and allege that the pair began exchanging regular e-mails in 2008. In e-mails included in the charging documents, Beliveau playfully pressed for returns from the Navy contractor. “You give whores more money than me ;)” he wrote to Francis in April 2012. “Don’t get too busy that you forget your friends. . . . Let me know . . . I can be your best friend or worst enemy.” “You are a sore Bitch and I have not forgotten you Bro,” Francis replied, according to court papers. “How do I send you a gift?” Beliveau was not assigned to the NCIS team scrutinizing Glenn Defense Marine, but court papers allege that he downloaded scores of reports from the case file by accessing the agency’s internal databases. Investigators say Beliveau took many of the copied files home and exchanged more than 1,000 text messages with Francis over 15 months. Beliveau’s attorney, Gretchen Von Holmes of San Diego, did not return phone calls or e-mails seeking comment. On Sept. 16, as federal agents arrested Beliveau in Washington and Misiewicz in Colorado Springs, they also laid a trap for Francis in California. Navy officials summoned him from Singapore to California, saying they wanted a face-to-face meeting to discuss business. Francis brought two business associates with him to San Diego, where he was arrested in his hotel room at the Marriott Marquis, according to court records, his attorney and another person familiar with the case. Arrested in San Diego at the same time was Glenn Defense Marine’s general manager for global government contracts, Alex J. Wisidagama. He was charged with fraud and remains in federal custody. His attorney, Knut Johnson, did not return a phone call seeking comment. Last month, the Navy terminated three major contracts with Glenn Defense Marine worth nearly $200 million total. At the company’s headquarters in Singapore, phone calls in recent days have gone unanswered. Reached via e-mail, Valeriane Toon, vice president for global communications, declined to comment.

Md. woman admits stealing millions from D.C. nonprofit

An administrative assistant admitted Monday to stealing more than $5 million from the Association of American Medical Colleges in one of the largest embezzlement schemes from a Washington area nonprofit organization. Ephonia Green, who earned $56,000 a year at the District-based AAMC, which administers the test known as the MCAT that is used in medical school admissions, pleaded guilty in U.S. District Court to carrying out the theft over an eight-year period. “Her lucrative and long-running scheme came crashing down when her employer discovered her deception and informed law enforcement,” U.S. Attorney Ronald C. Machen Jr. said in a statement released after the hearing. “She now faces years in prison as a result of the millions she stole for her own self-indulgence that were initially intended to benefit educational programs.” Green, speaking softly and clutching a handkerchief as she answered questions from Judge Beryl A. Howell, did not provide any insight into her motivations. Her attorney, William C. Brennan, told the judge that Green is seeing a counselor to help her come to terms with her misconduct. “We are truly stunned,” Darrell G. Kirch, the AAMC’s president and chief executive, said in a statement that referred to Green as a “long-time, trusted employee.” The organization also said it would “apply the lessons we have learned from this experience, as well as share them with others in the nonprofit community.” Green, 44, started at the association that represents accredited medical schools and major teaching hospitals in 1998 and initially worked in support positions. Court documents signed by Green describe how she opened bank accounts in the names of companies that closely resembled those of legitimate vendors to the AAMC. With access to the organization’s key financial systems, Green created phony invoices in the names of legitimate groups and then approved them for payment. The checks were returned to Green — not to the vendors — and deposited into the accounts she created. Green also issued invoices for payments to a bridal shop she owns in Upper Marlboro and later failed to list them in her unit’s budget records. Frank Trinity, the AAMC’s chief legal officer, said that Green had “exploited every gap in their system” and used “deception and coverup.” Outside auditors reviewed the group’s balance sheets, but those were not forensic audits aimed at detecting fraud, the association said. Trinity acknowledged weaknesses in oversight and said the association has corrected them. As an administrative assistant, Green had sole sign-off power on invoices up to about $20,000. Dual sign-offs, by people at higher levels, now are required for all invoices. Monthly budget reviews add additional monitoring. Trinity said some of the largest payments Green stole — accounting for more than $3.7 million — purportedly were for the Brookings Institution. He said they went unchallenged because Brookings is a trusted name. Green’s scheme started small but dramatically escalated, according to a log of checks filed as part of the plea agreement she signed. Between July 2005 and September 2006, the checks Green cashed were nearly all for less than $5,000. She became more brazen — for example, taking nearly $218,000 between January and April 2009 through just four checks, each for more than $50,000, according to court papers. Starting in 2011, nearly $1.4 million was paid through 74 checks made out to the bridal business that Green ran on the side, known as Couture Miss Bridal & Formal. She took $27,200 for the bridal shop in a single day in November 2012, according to court papers. The scheme fell apart in July, when a bank withheld payment on a $113,000 check that did not match the name on a bank account Green had set up two days earlier. The bank alerted the association, and it fired Green that month. The AAMC informed federal authorities and hired an outside attorney and forensic accountants. A Washington Post analysis last month of federal disclosure records filed by nonprofit groups across the country revealed more than 1,000 “significant diversions” of assets at such organizations. Many of the diversions identified by The Post were described as acts of theft and fraud carried out by insiders, contractors and investment advisers. In Green’s case, federal prosecutors filed charges swiftly — unlike in some past embezzlements from nonprofit groups. As part of the plea, Green has agreed to repay $5.1 million to the association. The money will come in part from the sale of her $1.1 million home in Upper Marlboro that she owns with her husband, Albert J. Green Jr., and her mother-in-law. In addition, Green’s attorney said she has agreed to sell her bridal business. Prosecutors did not provide a complete picture of how Green spent the money she embezzled. According to the association, Green purchased a condominium, a time-share and an Acura MDX, in addition to the 7,000-square-foot home in Prince George’s County. Under federal sentencing guidelines, Green faces up to 51 months in prison. A sentencing hearing is set for Feb. 28.

An investigation that goes to the heart of our political system

THE ACCELERATINGinvestigation into the 2010 election campaign of D.C. Mayor Vincent C. Gray has produced titillating revelations of bogus money orders, shredded records, a hidden wire and now, it appears, bald-faced lies to the FBI. But at the heart of the federal investigation is something precious and important: the integrity of the electoral process. What happened in 2010, as U.S. Attorney Ronald C. Machen Jr. made clear in a pull-no-punches statement, is that “the voters of the District of Columbia were deceived.” The election of Mr. Gray (D), who campaigned against former Mayor Adrian M. Fenty (D) on a theme of restoring integrity to government, was aided by secret payments, fraudulent filings, stealth deals and dirty tricks. Those responsible for these underhanded tactics — and Mr. Gray has not been charged — are rightly being held to account as federal prosecutors proceed with an investigation entering its second year. Sadly, though, there is no way to undo whatever influence their misdeeds had on the electoral process. Mr. Machen, whose office brought criminal charges Wednesday against a second member of Mr. Gray’s campaign team, decried what he saw as “pretty shocking” and a “flagrant” abuse of the system. “We take seriously — very seriously,” he told us, “the imperative that people play by the rules, that elections be fair and transparent. When you cross the line, you tamper with our very system of government.” That’s exactly what happened when operatives for Mr. Gray secretly financed the candidacy of minor mayoral hopeful Sulaimon Brown so that he could continue the fierce attacks on Mr. Fenty that helped undermine the Fenty campaign. It is impossible to say whether the dirty tricks changed the outcome of the primary. Mr. Fenty faced plenty of problems of his own making. But the Gray campaign would not have gone to such lengths unless its strategists believed the scheme would have an effect. Federal prosecutors are reported to be examining more than Mr. Brown’s claims that he was paid off with campaign money and the promise of a city job. They also may be looking into allegations of a “shadow campaign” that operated outside of campaign finance rules. Documents in the government’s case against campaign official Thomas W. Gore, who pleaded guilty this week for his role in funneling and then trying to hide funds to Mr. Brown, contains a reference to “excessive or unattributed cash contributions.” Howard Brooks, the campaign consultant named in a criminal information filed Wednesday that is a likely prelude to his guilty plea, is believed to be cooperating with federal prosecutors, as is Mr. Gore. Did Mr. Gray know what was going on? If not, why not? The mayor, who previously has denied wrongdoing, has refused to comment on the charges involving Mr. Gore and Mr. Brooks. That’s understandable but not sustainable. Surely the public is owed an explanation, and an apology, for the events that now taint the 2010 election. **Read more on this issue:** The Post’s View: Federal prosecutors reach into Vincent Gray’s inner circle The Post’s View: Did Vincent Gray have a ‘shadow campaign’ for D.C. mayor? Colbert I. King: Is Mayor Gray telling the truth? The Post’s View: Serious charges from Sulaimon Brown

Doctors react to release of Medicare billing records

Doctors reacted swiftly and indignantly to Wednesday’s release of government records revealing unprecedented details about Medicare payments to physicians. Many resented being included on a list that showed some doctors billing Medicare for millions of dollars. The top 10 doctors alone received a combined $121.4 million for Medicare Part B payments in 2012. Federal investigators have scrutinized payments to three of the top 10 earners. One is Farid Fata, a cancer doctor in the Detroit area, who faces federal fraud charges. He received $10 million in Medicare payments in 2012. Fata was arrested in August and is awaiting trial in a Medicare fraud case, accused of intentionally misdiagnosing illnesses and ordering unnecessary treatments, including chemotherapy for patients who did not have cancer. He has denied any wrongdoing. In interviews, many of the doctors said they were just passing through the payment to drug companies. Some said they were unfairly singled out even though they were billing for an entire practice. And still others disputed the accuracy of Medicare data. Gerald Ho, 50, a rheumatologist who runs three offices in the Los Angeles area, said he had been “sort of dreading” the release of the Medicare payment data. Ho received nearly $5.4 million in reimbursements in 2012. Of that, he said, probably about $5 million covered the cost of genetically engineered drugs to treat patients with rheumatoid arthritis. He also has to pay a staff of 40. “People are going to see these numbers and people aren’t going to understand,” he said. “I am not pocketing $5.3 million. To tell you the truth, I know there’s been a lot of Medicare fraud, and I understand the government wants to provide a measure of transparency. But when they throw out numbers like this without any context, it’s going to be misconstrued by the public.” Franklin Cockerill of the Mayo Clinic in Rochester, Minn., is No. 4 on the list with $11,068,463 in reimbursements. As the director for Mayo Clinic Laboratories, Cockerill is routinely listed as the billing physician on more than 23 million tests a year, a Mayo spokesman said. “When anything is billed out to Medicare, it will have Dr. Cockerill’s name on it,” said Andy Tofilon, marketing administrator for Mayo Medical Laboratories. “He is the chair of a large laboratory medicine practice, and the buck stops at his desk.” Cockerill is salaried and has “no financial stake by being included in all of these reports,” Tofilon said. Minh Nguyen, a hematologist-oncologist at Orange Coast Oncology in Newport Beach, Calif., was listed as the 10th-highest biller of Medicare in 2012. He said all the billings for chemotherapy drugs at his five-   physician practice were under his name. “It looks like I’m getting paid $9 million . . . but it’s a pass through,” he said. “The majority of the billing goes to pay the drug companies.” Sandhya Somashekhar, Lena H. Sun and Peter Whoriskey contributed to this report.

Colbert King: D.C. Council, time to get right with the feds

Welcome back to work, D.C. Council members. Hope the summer was fun. Things have been a little slow in the John A. Wilson building, what with the council’s dais empty of preening peacocks. Not that the rest of the government has been sitting on its hands. The mayor has been all over town, cutting ribbons like mad: Got scissors, will travel. The real action, however, has been in the U.S. Attorney’s Office on Fourth Street NW. Lawmakers may have been off during the summer, reclining somewhere in sweet repose. But U.S. Attorney Ronald C. Machen Jr. and his team of prosecutors and federal agents have been at it. Lest anyone forget, a striking number of city political luminaries has pleaded guilty to felonies connected with the D.C. corruption investigation. As part of their plea deals, the defendants agreed in writing to cooperate with the U.S. Attorney’s Office. The agreements are pretty straightforward: Give the investigators credible information that leads to the conviction of other corrupt players in the city — the higher the better, thank you very much — and the prosecutors will put in a good word at sentencing time. Those who have agreed to work with the feds include well-known political veterans Vernon Hawkins, Michael A. Brown and Jeanne Clarke Harris, as well as some lesser-known but still knowledgeable figures, such as Lee Calhoun and Stanley Straughter. These defendants have good reasons to cut deals. Machen has been known to work out lenient conditions for cooperating defendants. Case in point: Howard Brooks. Several of you council members probably know Howard. To recall: A year ago, Brooks pleaded guilty to lying to federal agents who were investigating claims that Vincent Gray’s 2010 mayoral campaign paid a fringe candidate to remain in the Democratic primary race to harass then-Mayor Adrian Fenty. After lying about it, Brooks admitted to making the payments and agreed to cooperate fully with the feds. And he did. Brooks wore a recording device during a conversation he had with Thomas Gore, assistant treasurer of the Gray campaign. Gore was caught admitting that he had destroyed a notebook in which the payments were recorded. Unfortunately for Gore, he had told the FBI otherwise — a big no-no, according to the U.S. Code. When time came to face the judge, Gore asked for probation. The feds recommended a six-month prison sentence.That’s what Gore got, plus 200 hours of community service. Brooks, on the other hand, played ball with Uncle Sam. The judge gave Brooks what the feds had recommended: probation. Is that sufficient incentive for defendants to sing their hearts out? They could make quite a chorus. Council members, give them an ear . . . and listen for your name. Michael Brown is proving his worth to the feds, admitting in court documents to a $20,000 contribution to his 2007 council campaign that he concealed as a personal contribution. Brown acknowledged in a plea deal that the money was wired to him from Harris, who got it from a donor identified by sources close to the investigation as D.C. businessman Jeffrey E. Thompson, a big-time fundraiser whose company used to have the city’s largest contract. Brown may have more stories. Enough dirt, perhaps, to persuade the feds to cut him a little slack when he goes before the judge for sentencing. Harris’s cooperation is  already on the record . She has fingered a co- conspirator — unnamed in court papers but widely believed to be Thompson — as the financier of a  scheme of “straw” donations to a  $653,000 “shadow campaign” on Gray’s behalf. Harris has also admitted her role in the illegal contribution to  Brown’s 2007 campaign. Attention, council members: Harris reportedly has assisted Thompson in funneling straw contributions to other political campaigns. Ever see her around your campaign headquarters with a little sumpin’ sumpin’? Don’t wait for the FBI to come calling. Now’s the time to get right with the government. Just a thought. Hawkins, who pleaded guilty last month to lying to the feds, also disclosed in court that he worked with Harris and Thompson in drawing up a budget for the illegal shadow campaign. Hawkins, who is not in the best of health, faces up to 16 months behind bars. He can probably get that knocked down by giving the government a little sumpin’ sumpin’ of his own. Jeff Thompson probably won’t be enough. Despite having top-flight defense attorney Brendan Sullivan in his corner, Thompson is toast. Machen doesn’t need Hawkins to take down Thompson. Others are lined up to do that. So what can Hawkins contribute to his own cause? Gray has denied any knowledge of secret contributions to his 2010 campaign and has not been charged with any crime. What can Hawkins deliver? Some of you in City Hall know the answer. Welcome back to the building. But for how long? _Read more fromColbert King’s archive._ **Read more:** Jonetta Rose Barras: Vernon Hawkins is bad news for Mayor Gray Colbert I. King: Jeffrey E. Thompson is public menace No. 1 Dana Milbank: Ending corruption would help D.C.’s case for local control

EpiPen competitor to launch next month

A major competitor to EpiPen, the lifesaving allergy injection that has become the latest flash point in the debate over high drug prices, will launch Feb. 14 at a list price of $360 for a two-pack, the company Kaléo announced Thursday. The news comes months after drugmaker Mylan came under fire for raising the price on EpiPen for years. Mylan has enjoyed a near monopoly on the allergy-injection market, raising EpiPen’s price to $609 for a two-pack. Chief executive Heather Bresch was called to testify at a congressional hearing last year, as was another pharma executive responsible for a massive price increase, Martin Shkreli. Mylan has faced competition before, including from the Auvi-Q before it was recalled. Now, EpiPen will go head-to-head with Auvi-Q and the authorized generic of the auto-injector Adrenaclick. Last week, CVS Health said it would offer a two-pack of the Adrenaclick generic for $110. Mylan also launched an authorized generic of EpiPen late last year, at $300 for a two-pack. The three companies are also offering coupons and patient affordability programs to defray the cost to consumers. **— Carolyn Y. Johnson** Western Union agreed to pay $586 million and admitted to lapses in anti-money-laundering controls that enabled illegal gambling, money laundering and fraud-related schemes, the Justice Department and other U.S. authorities said Thursday. “Wiring money can be the fastest way to send it — directly into the pockets of criminals and scam artists,” said acting assistant attorney general David Bitkower. The government said it uncovered hundreds of millions of dollars being sent to China in transactions designed to avoid reporting requirements under federal bank laws. It said much of the money was sent by illegal immigrants to smugglers. The fraudsters also contacted victims in the United States by falsely posing as family members in need. The victims sent money through Western Union, where agents processed the payments for a cut of the proceeds, the government said. **— Bloomberg News** **— From news services**

Little understanding of health-care law opens door for scams, government says

If a stranger claiming to be from the government calls to offer you an “Obamacare card” or threatens to throw you in jail unless you buy insurance, hang up the phone. It’s a scam. Fraudsters are poised to take advantage of widespread confusion over the Affordable Care Act — also known as Obamacare — to steal Americans’ credit cards, Social Security numbers and other personal information, consumer advocates and government officials say. “This is the huge, new government program. There’s no doubt in my mind that the fraudsters view it as an opportunity to rip people off,” said Lois Greisman, associate director for the Federal Trade Commission’s division of marketing practices. The FTC already has issued a consumer alert about one telemarketing scheme, in which impostors claiming to be from Medicare told consumers they needed to hand over their personal or financial information in order to continue eligibility because “change is on the horizon.” But nothing in the Affordable Care Act threatens existing benefits for Medicare enrollees, Greisman said. The official-sounding calls were just a ploy to steal consumers’ identities and money. The FTC received more than 1,100 complaints about similar scams in May alone. Another typical rip-off involves fraudsters who contact consumers by phone or e-mail and say, “I’m with Obamacare. I need your information to send you your new Obamacare card,” said John Breyault, vice president of public policy for the National Consumers League, an advocacy group in Washington. Some scammers try to sell consumers poor coverage or coverage that isn’t even real. The callers then request bank account routing numbers or credit cards, or ask for cash directly through a wire transfer, he said. “Scammers usually say you have to join. ‘It’s the law now, so you have to give us money,’ ” Breyault said. “It’s typically using scary language like ‘the government requires you to do this’ or ‘you’re going to lose your benefits unless you send us money.’ ” Consumer groups first noticed a spike in complaints about Affordable Care Act swindles after Congress passed the 2010 law. Now, as the Oct. 1 deadline to open health-care exchanges approaches, health-care scams are on the rise again. “We are starting to get a few complaints that people are receiving unsolicited calls that say they can provide insurance,” said Nanci Gonder, spokeswoman for the Missouri Attorney General’s Office. “We plan to issue some kind of alert in the future to make sure consumers watch for any calls that could be scams, that could be people trying to get their personal or financial information,” Gonder said. Scammers prey on consumers’ uncertainty about the new law and how it will affect their lives. A recent Kaiser Health Tracking Poll found that four in 10 Americans didn’t know that the Affordable Care Act remains the law of the land. That ratio was even higher for people earning less than $30,000 a year, 60 percent of whom couldn’t say whether the law was being implemented. Greisman worries that some scammers will exploit the government’s efforts to better educate consumers by pretending to be certified “navigators.” The administration has announced $54 million in grants for navigator groups, which will be tasked by law to help uninsured Americans sign up for benefits in the exchanges. All navigators must be impartial, certified and trained, said Richard Olague, spokesman for the federal Centers for Medicare and Medicaid Services. Some states may require fingerprinting or background checks, Olague said. But it isn’t yet clear whether navigators will be allowed to use telemarketing or unsolicited e-mails in their outreach and education efforts. “What we’re very likely to see is (fake navigators saying), ‘For an upfront fee we can help you,’ but there shouldn’t be an upfront fee, it should be free,” Greisman said. She said her agency is waiting for the Department of Health and Human Services to finalize rules for the navigators before advising consumers on how best to distinguish real navigators from fake ones. With less than three months left before exchanges open, the clock is ticking. “The closer we get to registration in October, the greater the odds that the con artists are going to be looking for weaknesses in the emergent new systems, and they will be probing. And you can bet your bottom dollar that there will be some fresh and interesting new scams,” said James Quiggle, spokesman for the Coalition Against Insurance Fraud, a nonprofit organization based in Washington. So far, Quiggle’s group has documented swindles related to the Affordable Care Act in at least 25 states. But consumers can easily fight back, he said. “Simply close the door, or hang up the phone the moment someone starts probing for your sensitive financial information,” he said. “Do not allow them to try to sweet-talk you and engage you because some of these people are very trained and very good at slowly easing you into giving up your information.” Consumers should report suspected scam artists to the FTC, state insurance departments and state attorneys general. “That’s the only way these guys will be put out of business,” said Breyault of the National Consumers League.

Inside a $10M scheme to steal federal funds intended to feed hungry children

The money was supposed to go toward feeding the most vulnerable children in Arkansas: Kids in low-income areas who relied on after-school programs for dinner — or visited community centers during the summer because they might not get to eat otherwise.  The scheme unfolded over about 2 1/2 years, and officials considered it “to be the equivalent of taking food directly from children,” said Chris Givens, a U.S. Attorney’s Office spokesman. At least 12 people in Arkansas have been charged with crimes that include wire fraud, bribery and money laundering, in an ongoing investigation of misused funds related to federal feeding programs, according to government prosecutors. Moreover, investigators said they could trace all of the corrupt activity back to internal sources, which state officials called a troubling and “extremely disappointing” matter. Of those charged, three were employees of the Arkansas Department of Health Services, the state agency that oversees the distribution of such funds from the U.S. Department of Agriculture. The unraveling of what turned out to be a staggering level of fraud began in mid-2013, when DHS received what it considered a suspicious claim from Jacqueline Mills, the sponsor of feeding sites in rural eastern Arkansas. The site in question was located in Helena-West Helena, a small with a low population density; the claim amount was high enough to raise a red flag. “The amount was almost a million dollars,” said Tonya Williams, a DHS division director. “It was just like, wait a minute, that just doesn’t seem right.” The stage agency reported it to the USDA Office of the Inspector General; soon, the IRS, the FBI and other federal agencies joined the investigation. What they found shocked the Arkansas DHS. More than a year after the investigation began, Mills was arrested on fraud and bribery charges — and so, too, were two longtime DHS employees, Gladys King and Tonique Hatton. “I was pretty mortified,” Williams said. Investigators found that Hatton had accepted bribes — some directly, others made through payments to her relatives — in exchange for approving the maximum number of children who would be fed at Mills’s site in eastern Arkansas. Mills, in turn, submitted inflated claims for reimbursement to DHS. Because her sites had already been preapproved for a certain number of children, DHS approved and paid out the inflated claims. Authorities estimate Mills’s sites received more than $2.5 million in federal funds through DHS. Investigators said that in exchange for bribes, King approved other sites knowing their administrators would submit similarly inflated claims. King had worked at DHS since 2009 and most recently served as a special nutrition unit program coordinator; she voluntarily left the agency in December 2013, after the investigation began. Hatton began working at the agency in 2001 and was still employed there at the time of her arrest. DHS fired her immediately. “It’s extremely disappointing to learn that people were reportedly cheating a program that feeds hungry children, especially in a state that has one of the highest rates of childhood hunger in the country,” then-DHS Director John Selig said in a statement released the morning of the first arrests, in 2014. “We appreciate all the work to help us root out the bad actors so other providers can continue to ensure kids have adequate food when they aren’t in school.” Over the following year, the investigation continued to turn up sobering discoveries of fraud and bribery. In one case, a provider named Christopher Nichols submitted a claim to open two feeding sites through an organization called “A Vision for Success.” Both locations were approved by his aunt, Gladys King. One site was discovered to be an auto repair shop in North Little Rock owned by Nichols’s uncle, Anthony Waits. The other address was nonexistent. According to authorities, Waits was married to King.  “When you’re feeding children, you might find some places you would never think would be a feeding site,” Speight told the station. “If there were children and there was an apartment complex right next to it, and it had facilities to be able to serve, it could possibly happen.” In March, another defendant, Reuben Nims, pleaded guilty to conspiracy to commit mail fraud. According to the Justice Department, Nims admitted he was recruited by Waits to sponsor a feeding program through an organization called “Blessed Thru Success.” Nims had one approved feeding site in Little Rock, which he claimed fed up to 300 children per day. It was all a lie, investigators found. “No children were ever actually fed there,” the Justice Department said following Nims’s guilty plea. In all, 12 people have been charged. This week, Hatton became the ninth person to plead guilty to crimes surrounding theft of federal feeding program funds. Three defendants have pleaded not guilty; their trials begin Oct. 17. So far, only one defendant has been sentenced: In March, Kattie Jordan was sentenced to more than five years in federal prison. A judge also ordered her to pay joint restitution of $3.6 million. The defendants face a maximum of 20 years in prison and up to a $250,000 fine for the charges of conspiracy to commit wire fraud. The punishment for accepting bribes is up to 10 years in prison and a $250,000 maximum fine. “Regardless of these statutory penalties, we feel these are very serious crimes,” said Givens, the U.S. Attorney’s Office spokesman. It’s unclear how many children in Arkansas rely on free or reduced meals outside of school, but nearly 289,000 of the state’s students (about 61 percent) qualified for free or reduced school lunches in the 2015-16 academic year.  “There’s hungry kids all over Arkansas,” Givens said. He added that it’s unclear whether any children in Arkansas were not fed as a result of the fraud. But based on current USDA reimbursement rates — about $3.07 to $3.69 per lunch — the $10 million that was siphoned off from the programs in Arkansas could have meant anywhere from 2.7 million to 3.2 million meals for other children, according to a USDA spokeswoman. The stolen funds came through two USDA programs: the Summer Food Service Program, which feeds low-income children when school is out, and the Child and Adult Care Food Program. Arkansas DHS receives about $70 million per year through the programs, an official said. With the funds, the agency served nearly 35 million meals and snacks to needy Arkansans in 2015. “All of the defendants are connected through the DHS employees in some way, although not all defendants know each other,” Givens said in an email. “Tonique Hatton began her scheme, and the others at DHS followed. It could be considered the same fraud ring, in a sense, because the fraud was made possible through the same means, that is, with the help of the DHS employees.” One way or another, most of the defendants took advantage of a relatively basic system: In Arkansas, local sponsors who want to participate in the feeding programs must get training and then submit an application to DHS. Once approved, they can provide meals to qualifying children in the community, then submit claims for reimbursement based on the number of eligible meals they serve. An approved site also appears on the state agency’s website for participants in the “Arkansas Special Nutrition Program.” Until recently, a single DHS employee could be the one approving, visiting and reimbursing sites, said Williams, the division director. “We have restructured completely, as you can imagine,” she said. The agency has compartmentalized duties so that no one employee is responsible for approving and reimbursing sites “from beginning to end,” said Williams. Moreover, Williams said, she uses the findings of fraud as a cautionary tale. “It’s just part of training now,” she said, noting that she tells DHS employees: “You do not want to be on the front page.” “When I do new employee orientation, it’s like, ‘You’re going to read about it. We’re not going to hide this elephant.'”

Virginia jail inmates robbed by fake bail bond company, prosecutors say

Inside jails in Newport News and Norfolk, inmates would get a recommendation for a bail bond company that could give legal help. But the company recommended, FamUnited, was fake, federal prosecutors in Virginia say. They say the inmates’ identities were stolen, along with their cellphones, wallets and credit cards, in exchange for promised bonds that never came. According to an indictment in federal court, the conspirators sent forged property release forms to the jails even for inmates who didn’t go along with the scam. The fake bondsmen also forged power-of-attorney forms and used them to drain inmates’ bank accounts, according to the indictment. With stolen identity cards, they opened new bank accounts in inmates’ names. One of those charged, 31-year-old Delanio Vick, of Norfolk, was an inmate at the jail who spread word of the fake company, according to federal prosecutors. Vick, Teresa Gallop, 49, of Norfolk and Jessie Davis, 20, of Portsmouth were indicted Thursday by a federal grand jury on charges of conspiracy, mail fraud, wire fraud, bank fraud, making false statements in an application to a federally insured institution, and aggravated identity theft.

The U.S. attorney’s shameful treatment of Vincent Gray

What the United States Attorney did to Vincent C. Gray, and the due process of law in the District of Columbia, is a damn shame. It brings cold comfort to citizens to learn today that the federal probe into the illegal financing of Gray’s 2010 mayoral campaign is over and that no charges will be brought against the former mayor. Especially since the government already effectively tried Gray in the court of public opinion, and achieved a victory with his defeat in the April 1, 2014 Democratic mayoral primary. Gray’s off-the-books trial began three weeks before the primary election when a federal prosecutor alleged in court that Gray knew about businessman Jeffrey E. Thompson’s conspiracy to pump more than $660,000 in illegal contributions into Gray’s 2010 campaign. In a statement to the media later that day, Gray said the allegation was untrue, that he had done nothing illegal and that Thompson was lying. But following that public accusation, where Gray was concerned, the government said, and did nothing. No formal charges were filed, no indictment handed up, only government silence. And why not? The damage to Gray had already been done. His takedown was underway. On primary day April 1, Democratic voters turned Gray out office. Imagine, the US government stands up in court, alleges that a citizen, identified by name, has knowledge of a conspiracy to commit a federal crime and then neither brings charges nor affords the named citizen an opportunity to confront his accuser or defend himself in a court of law. But that is exactly what the government did to the mayor of the District of Columbia: deprived him of due process, the appropriate legal procedures and safeguards to which he was entitled. And in so doing, the federal government sullied a legitimate political process to which citizens of the District of Columbia are entitled. And the feds got away with it. All in all, it’s a damn shame.

D.C. worker accused of stealing over $700,000

A District social services worker whose job was to help low-income families apply for public benefits was accused Thursday with creating false identities to steal more than $700,000 in cash, food stamps and health benefits. Aretha Holland-Jackson, 44, allegedly created identification cards for 14 fictitious beneficiaries, according to charging documents filed in D.C. Superior Court. For each fake identity, Holland-Jackson received Temporary Assistance for Needy Families, or TANF, food stamps and Medicaid benefits, according to court papers. Between February 2011 and September 2013, she claimed at least $734,544 in public assistance benefits, court papers say. Court papers say the investigation reached a key point Wednesday when agents with the Department of Human Services received information that one of the debit cards was being used at a bank on H Street NE. Holland-Jackson was stopped in the same block, according to court papers. Eight debit cards were found on her, authorities allege, and about $134,820 in benefits had been taken from those cards since February 2011. After her arrest, according to the documents, Holland-Jackson admitted to authorities that she withdrew funds from accounts under false names. She said she split the proceeds with others, including a sister whose photo she had used to create one of the cards, court papers say. Holland-Jackson was charged with first-degree fraud. DHS Director David A. Berns said that while he couldn’t discuss the details of the investigation, he has “no tolerance” for public servants who violate the public trust. “Fraud in this agency is totally unacceptable, whether it’s with clients, contractors or our staff,” he said. “We will pursue and prosecute this case to the full extent of the law.” Holland-Jackson has worked at DHS since 2005 as what city officials called a “front-line eligibility worker.” She worked as an intake representative, meeting with needy families applying for benefits to determine whether they qualified for them. City records showed her salary was $54,039 this year. The alleged fraud was uncovered after DHS hired a new fraud investigator and began using “enhanced procedures” to uncover errors and wrongdoing, one high-ranking city official said. Once an internal investigation focused on Holland-Jackson, the city began working with the U.S. attorney and D.C. police. The city is terminating Holland-Jackson, officials said. A preliminary hearing has been scheduled for Sept. 25. As part of her release Thursday, a D.C. Superior Court judge ordered her to undergo drug testing. Holland-Jackson, who lives in Bowie, did not respond to several phone messages. Her court-appointed attorney, Ravi Regunathan, declined to comment. Mike DeBonis and Jennifer Jenkins contributed to this report.

Gallup accused of bilking government

The Justice Department accused the Gallup Organization on Wednesday of bilking federal agencies out of millions of dollars by routinely inflating prices for contracts. The 57-page civil complaint says that Gallup, the world’s best-known polling organization, inflated estimates for the number of hours that it would take to perform its polling services for the Treasury and State departments. The Justice Department accused Gallup of submitting false invoices totaling $13 million. Federal officials also accused Gallup of negotiating to hire a federal employee who was responsible for Gallup’s contract at the Federal Emergency Management Agency while it was trying to get more funding from FEMA. “As a result of Gallup’s false and/or fraudulent representations and conduct . . . the government was falsely and/or fraudulently induced to enter into and accept terms and conditions on contracts . . . to which it would not have agreed had it known the truth,” Stuart F. Delery, principal deputy assistant attorney general, said in the suit, filed in U.S. District Court in Washington. Gallup, which bills itself as “the most trusted name in polling,” said, “We look forward to clearing our name in court.” William E. Kruse, a vice president and associate counsel with Gallup, said: “I’m confident that there were no inappropriate actions taken by Gallup staff on any government contract or any other contract for that matter.” The allegations were first brought to the Justice Department by former Gallup employee Michael Lindley, who said he saw Gallup repeatedly inflate its prices while negotiating single-bidder contracts with government agencies. Lindley was 27 when he was hired in 2008 as director of client services in Gallup’s Washington government division. His job was to help Gallup partners prepare cost estimates for budgets submitted to government agencies on proposals and contracts. One of his first assignments was to prepare the internal budget for part of a $7.5 million contract awarded to Gallup by the U.S. Mint to conduct market research on the likely purchasers of newly issued $1 presidential coins, according to the suit. A Gallup partner, Sameer Abraham, instructed Lindley to create a smaller internal budget, calling for significantly fewer hours of work, the complaint said. Abraham brought Lindley paperwork with the higher numbers submitted to the Mint crossed out and lower numbers written in their place, according to the suit. “I knew something was wrong,” Lindley said in an interview. “It was two sets of books. He wanted me to create a different internal budget that was vastly reduced in comparison to the official budget that had been submitted to the Mint.” The practice allowed Gallup to earn outsized profits from its government business, according to the Justice Department. Two Gallup partners frequently boasted that the profit margins on government contracts were among the highest in the company, according to the suit. Lindley took his concerns to a supervisor, but was told that he didn’t understand government contracting. Lindley said the fraudulent conduct continued, with partners inflating the hours by a multiple of two or three times the number of previous, similar projects, according to court documents. In one case, Lindley said Gallup planned to bid $25 million on a sole-source contract with the State Department, which he said was more than double the internal cost. Lindley also discovered that Gallup had promised a job to FEMA official Timothy Cannon, who was instrumental in obtaining a multimillion-dollar contract for Gallup. After Cannon was interviewed for the Gallup job and met with the company’s chief executive, he sent an e-mail to a Gallup employee about the contract with FEMA. “I got another 500k put on the contract. Cool huh?” he wrote, according to the suit. As part of the lawsuit, the Justice Department also brought a civil claim against Cannon. David Schertler, Cannon’s attorney, did not immediately reply to messages. In 2009, Lindley was honored by Gallup as “Rookie of the Year,” given a raise and selected to attend partnership boot camp. But later that year, after months of raising concerns about the contracts, Lindley took his complaints to his supervisor again, according to court documents. “I told my supervisor, ‘If you don’t end this practice, I’m going to the Department of Justice,’ ” Lindley said. Lindley was fired the next day by Gallup’s chief counsel, Steve O’Brien, according to court documents. “When you start talking about going to the Department of Justice, we don’t trust you anymore,” O’Brien told Lindley, according to the documents. Kruse, the Gallup lawyer, said he is confident that the associates named in the suit will be cleared. Lindley turned down a severance package and contacted an attorney, Janet Goldstein of Vogel, Slade & Goldstein. Goldstein and another firm filed a civil suit against Gallup on Lindley’s behalf three years ago.

Senior Navy civilians investigated in alleged scheme to defraud military for $1.6 million

Federal authorities are investigating three senior Navy intelligence officials as part of a probe into an alleged contracting scheme that charged the military $1.6 million for homemade firearm silencers that cost only $8,000 to manufacture, court records show. The three civilian officials, who oversee highly classified programs, arranged for a hot-rod auto mechanic in California to build a specially ordered batch of unmarked and untraceable rifle silencers and sell them to the Navy at more than 200 times what they cost to manufacture, according to court documents filed by federal prosecutors. The purpose of the silencers remains a mystery. According to the court papers, one of the intelligence officials told a witness in the case that the silencers were intended for SEAL Team 6 , the elite commando unit that killed Osama bin Laden. The case is the second contract-fraud investigation to entangle senior Navy intelligence officials in recent weeks. On Friday, the Navy disclosed that Vice Adm. Ted “Twig” Branch, the director of naval intelligence, and Rear Adm. Bruce F. Loveless, the director of intelligence operations, are under investigation  as part of an unrelated bribery scandal  involving Glenn Defense Marine Asia , a Singapore-based defense contractor. Neither admiral has been charged with a crime. But the Navy suspended their access to classified materials after their names surfaced in an escalating probe into allegations that other officers provided sensitive information to the contractor in exchange for prostitutes and cash. There is no known connection between the two corruption cases, but both reach high into the Navy hierarchy and, based on prosecutors’ filings, expose how easy it can be for contractors and insiders to defraud the service of millions of dollars. The investigations also call into question the Navy’s ability to prevent fraud. In April 2011, after yet another contracting scandal, Navy Secretary Ray Mabus pledged a crackdown and appointed a special panel to improve oversight. “We will not accept any impropriety, kickbacks, bribery or fraud,” he promised at the time. A few months later, however, civilian intelligence officials at Navy headquarters began circulating e-mails that set into motion the scheme to purchase the firearm silencers, according to affidavits from investigators and other documents filed recently by prosecutors in U.S. District Court in Alexandria. None of the three Navy civilian intelligence officials has been charged in the investigation, which is ongoing. Their names are redacted in most of the court documents, which refer to them as “Conspirator #1,” “Conspirator #2” and “Conspirator #3.” But in one affidavit, federal investigators neglected to black out the name of Conspirator #2, identifying him as Lee Hall of Virginia. Hall is a longtime defense intelligence official who now works for the Navy. An attorney for Hall, Danny Onorato, declined to comment. The same affidavit identifies Conspirator #1 by his first name, David. Three people familiar with the case said that person is David W. Landersman, the senior director for intelligence in the Navy’s directorate for plans, policy, oversight and integration intelligence. Stephen M. Ryan, an attorney for Landersman, declined to answer questions about the case but said, “I’m confident that he did nothing wrong and will be fully exonerated.” Ryan said Landersman is a retired Marine colonel and decorated combat veteran who served in Somalia and did multiple tours in Iraq. Landersman and Hall were placed on administrative leave in the spring after the Naval Criminal Investigative Service opened a probe into the silencer purchases, the people familiar with the case said. Rear Adm. John F. Kirby, the Navy’s chief spokesman, declined to comment on the men’s work status, saying he could not discuss the details of ongoing investigations. “Secretary Mabus has made it clear that he holds senior leaders in the Navy Department accountable to high standards of ethics and conduct,” Kirby said in a statement. “We take seriously all allegations of wrongdoing and investigate them thoroughly.” Court records show that the only person charged has been the auto mechanic: Mark Stuart Landersman, 52, of Temecula, Calif. He is David Landersman’s brother. Mark Landersman was arrested Oct. 29 and charged with conspiracy to commit wire fraud and to transport unregistered firearms. He was released on $100,000 bond. His attorney, John Zwerling, declined to discuss the allegations. “We have been living with this set of facts for months,” he said. “We are convinced that he has committed no crimes.” Court records describe Mark Landersman as a down-on-his-luck mechanic who struggled to keep his Temecula repair shop in business. He and his wife declared personal bankruptcy in July 2012. A month later, according to charging documents, Mark Landersman received a series of e-mails from his brother at the Pentagon about firearm silencers, including a link to a Web site with do-it-yourself instructions for building a certain model. “Wow! Very simple,” Mark Landersman replied in an e-mail on Aug. 14, 2012, according to the charging documents. The next day, Navy finance officials informed David Landersman that they had approved a $2 million budget supplement he had requested for “studies, assessments and research.” Two days after that, Landersman’s office transferred almost all of the money to a preexisting Navy intelligence contract with CACI, a major contractor. According to court documents, Hall and Conspirator #3 then directed CACI to buy the silencers from a California company newly incorporated by Mark Landersman. Hall also told CACI to award the business without seeking a lower bid, according to investigators. In e-mails, Hall said that Landersman’s fledgling company was “the only responsible source for the engineering expertise sought” and that “their product is first that incorporates a unique design that significantly reduces the decibel ratings to near background noise levels.” To manufacture the silencers, Landersman turned to Carlos C. Robles, a machinist who used to work in his auto repair shop. He gave Robles blueprints for what he called “a small-engine muffler” and asked him to make 349 of them, according to charging documents. Robles later told agents from the Bureau of Alcohol, Tobacco, Firearms and Explosives that he built the mufflers and that Landersman paid him $8,000 to cover parts and labor. He acknowledged to the agents that the mufflers closely resembled silencers. ATF firearm examiners tested the devices and concluded they were functioning silencers. In an interview with The Washington Post, Robles said he was stunned to learn that Landersman had resold the silencers to CACI and the Navy for $1.6 million. “Are you kidding me?” he said. A CACI spokesman did not return phone calls or an e-mail seeking comment. Soon after CACI paid for the work, the recently bankrupt Landersman went on a shopping spree, according to charging documents and affidavits filed by federal investigators. He bought stock shares in a microbrewery for $100,000, a restored 1988 Porsche 911 for $49,084, an off-road racing vehicle for $15,000, a Ford Ranger for $40,000, a red 2013 Ford F-150 Raptor pickup truck for $59,294 and a $5,760 welder. In February, the silencers were delivered to a Naval Research Laboratory warehouse in Chesapeake Beach, Md. NCIS agents seized the silencers two months later. The silencers were unmarked and untraceable, despite a federal law requiring all firearm manufacturers to imprint them with a serial number and the name of the maker. Why the silencers were ordered remains unclear. According to court records, one of the Navy intelligence officials under investigation told another Navy employee that the silencers were intended for the Naval Special Warfare Development Group, the official name for Navy SEAL Team 6. The intelligence official said the silencers were designed for the “AK family of firearms,” a reference to Kalashnikov rifles such as the AK-47. Officials with SEAL Team Six told investigators that they were unaware of any such order for silencers, according to court documents.

McAuliffe among investors in Rhode Island insurance scam that preyed on dying people

Virginia gubernatorial candidate Terry McAuliffe (D) was one of dozens of investors with a Rhode Island estate planner charged with defrauding insurers by using the stolen identities of terminally ill people, according to court documents filed Wednesday by federal prosecutors in Providence. McAuliffe’s name appeared on a lengthy list of investors with Joseph A. Caramadre, an attorney and accountant who obtained the identities of dying people to set up annuities that ultimately cost insurance companies millions of dollars, the documents say. The list also included the law firm of a former Rhode Island Supreme Court justice, a Roman Catholic monsignor, a former Cranston, R.I. police chief, and a bookmaker, according to the Providence Journal, which first reported McAuliffe’s investment Wednesday. Federal court documents do not accuse McAuliffe of wrongdoing, and it wasn’t clear whether he had made money or lost money on the investments. His campaign spokesman said McAuliffe was a “passive investor” who was deceived like many others. Spokesman Josh Schwerin also said that the campaign and McAuliffe donated sums to the American Cancer Society totaling $74,000 — approximately the amount McAuliffe earned as a return on the investment and received in a campaign donation from Caramadre. “Terry was one of hundreds of passive investors several years ago and had no idea about the allegations against the defendant — who, at the time, was widely respected by business leaders and elected officials,” Schwerin said. “The allegations are horrible and he never would have invested if he knew he was being deceived.” Caramadre and his former employee Raymour Radhakrishnan were charged in November 2011 in a 66-count indictment accusing them of wire fraud, money laundering and witness-tampering. Both men pleaded guilty last November, the FBI said in a press release. Federal authorities say Caramadre, through his firm Estate Planning Resources, began developing products in the 1990s that used the identities of terminally ill people to purchase variable annuities from insurance companies. The annuities offered death benefits when those annuitants died. The investments — which Caramadre allegedly made on behalf of himself, friends, family and others — included returns of all the money invested and sometimes a guaranteed profit, federal authorities said. In 2006, Caramadre also began investing in “death-put bonds” that relied on obtaining the identities of terminally ill people, according to prosecutors. These investments allowed the owner to redeem the bonds years or decades earlier than the maturity date when the bond’s co-owner died. The FBI, in a November 2012 press release announcing mid-trial guilty pleas by Caramadre and Radhakrishnan, said Caramadre located terminally ill people by visiting AIDS patients at a hospice, locating relatives of terminally ill people, and placing an ad in a local Catholic newspaper offering $2,000 cash to people with a terminal illness. In 2009, Caramadre gave McAuliffe’s campaign an $26,599 contribution, including an in-kind event donation of $1,599, according to records kept by the Virginia Public Access Project. **Researcher Alice Crites contributed to this story.**

D.C. Council member Vincent Orange finds problems in his campaign donations

VINCENT B. ORANGE, an at-large member of the D.C. Council, acknowledged Monday that donations made to his campaign in last year’s special election are questionable and require further investigation. “My examination of the money orders leads me to believe that they are suspicious and questionable as to who actually paid for the money orders,” Mr. Orange (D) wrote in a statement to us. The city’s Office of Campaign Finance, he added, “should examine the money orders to determine if they are legal or illegal.” Mr. Orange initially brushed off questions about money orders donated to his 2011 special-election campaign as a political ploy by opponents seeking to unseat him in the April 3 Democratic primary. So we are glad he is finally considering seriously whether the money orders were a shield for straw-man donations to elude legal giving limits. In addition to calling for further investigation, he promised to refund any “illegal, suspicious or questionable” donations. The money orders became an issue after WAMU reporter Patrick Madden traced some of the contributions to prominent businessman Jeffrey E. Thompson, whose home and offices were recently raided by federal agents. The U.S. Attorney’s Office is conducting multiple investigations into possible corruption; among those believed to be under scrutiny are Mayor Vincent C. Gray (D) and D.C. Council Chairman Kwame R. Brown (D). Mr. Orange stressed in his statement that his campaign had properly reported the donations and had cooperated with the campaign finance office when it requested information about some of the donations. But most people who give $500 or $1,000 do so by check or credit card, so such money orders in themselves should raise a red flag. According to Mr. Orange, his examination revealed 19 money orders in the amount of $1,000 and 14 in the amount of $500. Some checks, ostensibly from different donors, have seemingly identical signatures. Sequential serial numbers on others suggest purchases made at a single time and place, possible signs that the orders were used to shield straw-man donations. Why Mr. Orange, who is both an accountant and lawyer, didn’t realize earlier that there might be a problem is one of the questions that should be asked. He showed us copies of some of the money orders Monday; he should release them all. And voters might also wonder why the District, which places a $25 cap on cash contributions, allows the use of money orders at all. **More on this issue:** The Post’s View: Show us the money orders, Mr. Orange Colbert I. King: For D.C. pols, a cautionary tale about money orders News story: Orange says he’s ‘clean’ in campaign finance probe News story: Low-key Jeffrey E. Thompson doubles as a ‘kingmaker’ News story: Vincent Orange’s donations become issue in race

Acquitted of murder last year, Silver Spring woman pleads guilty to fraud

The Silver Spring woman, who last year was acquitted on charges of orchestrating the fatal shooting of her cousin as part of a $100,000 life insurance payoff, pleaded guilty Thursday to taking part in a prescription and health-care fraud scheme. Claire Rice, 68, faces a maximum of 14 years in prison after pleading guilty in U.S. District Court to presenting and filling 91 forged prescriptions for drugs, including Oxycodone in the name of a Northwest Washington cardiologist. Prosecutors say between 2008 and 2013, Rice, along with her co-defendant, Novella White, 53, of Accokeek, Md., conspired and wrote the prescriptions. White, prosecutors say, is a former employee of the cardiologist. White has pleaded not guilty to the charges and is scheduled to go to trial on April 18. Prosecutors say Rice then submitted the forged prescriptions to be billed via health-care plans such as Express Scripts and Blue Cross and Blue Shield. The health plans were defrauded of the costs of filling the prescriptions. As part of the plea, Rice also agreed to pay $16,175, her share of the proceeds obtained from the health-care plans. Last August, a D.C. Superior Court jury found Rice not guilty in the 2012 fatal shooting of her cousin Anthony Rice, 58. Prosecutors charged Claire Rice with first-degree murder, saying she lured her cousin into a Northeast Washington park where he was fatally shot. Prosecutors argued Rice orchestrated the slaying in an effort to obtain $100,000 payout as part of a policy that she had taken out on her cousin. Rice denied being involved in her cousin’s death. There were no DNA, footprints or eyewitnesses. No one else has been arrested in the murder.

Tip from sharp-eyed hotel worker leads to 19 indicted in international fraud

The first tip-off to trouble came from a Dupont Circle hotel, where a staff member discovered computer equipment, cellphones and documents left behind in an unoccupied hotel room. The call to police from the hotel led to a lengthy investigation that uncovered an international money-laundering network that authorities say duped at least 170 people and six companies out of millions of dollars. Federal prosecutors on Wednesday announced the arrests of more than a dozen people in three states and four countries, after indictments were unsealed in federal court in Washington in four cases involving phony online car sales and the infiltration of corporate email systems. Law enforcement officials said the conspiracy began in 2010 with bogus online advertisements for cars, motorcycles and boats on websites such as eBay.com and Cars.com. Buyers were lured with photos and highly detailed descriptions into transferring money, for example, to purchase Mercedes-Benz vehicles that they never received, according to court filings. In all, the defendants are accused of stealing more than $3 million from the buyers, who were primarily located in the United States. The men arrested on Wednesday, who are mostly from Hungary, set up shop in two D.C. hotels and used counterfeit passports and driver’s licenses to open more than 70 bank accounts, set up UPS Store mailboxes and establish companies, according to court papers filed in U.S. District Court in the District. These “money mules” in Washington and Boston, among other U.S. cities, quickly transferred money from the fake online sales to accounts in Hong Kong and China, among other locations. Andrew Vale, assistant director in charge of the FBI’s Washington Field Office, said that the eight defendants charged in the car-sale conspiracy were “sophisticated, well-connected and continually honed their techniques to exploit their victims.” In a separate indictment also unsealed Wednesday, prosecutors say another group of defendants stole more than $10 million from a half-dozen companies based in Europe by impersonating company managers in spoof email messages. Authorities say the defendants — from Israel, Romania, Germany and Serbia — used phony messages appearing to be from high-level company executives to target midlevel employees with access to company finances. The messages tricked employees into making wire transfers to familiar-sounding bank accounts. The conspirators created fake emails by purchasing domain names from registrars located in the United States, according to the indictment. They operated primarily from “safe houses” in several European cities. Vale said the accused used “persuasion and pressure to manipulate” employees into believing they were being trusted to perform critical company transactions. In some cases, employees were told they were working on a “secret corporate acquisition,” according to the indictment. Since January 2015, the FBI has tracked a rapid increase in financial losses by businesses traced to similar scams. At a time when so much business is conducted electronically, law enforcement officials said, the case was something of a cautionary tale to always follow up on the phone or in person after an email contact. **Read more:** Federal officials indict seven Baltimore police officers on racketeering Appeals court upholds Maryland ban on semiautomatic, military style guns

This lawyer helped steal $600 million from the government, got caught — then disappeared

The government, on the other hand, simply calls him by his name: Eric Conn. It appears again and again in court documents surrounding Conn’s guilty plea earlier this year to bribing a judge and helping to defraud the government out of $600 million in disability claims. Conn’s name also appears on an arrest warrant issued recently, after he disappeared before he could be sentenced and forced to repay tens of millions of dollars. “It was totally predictable,” Ned Pillersdorf, a lawyer who helped Conn’s former clients win a class-action lawsuit for which he will also owe damages, told the Associated Press. “There has been a betting pool going on in Prestonsburg on not if he would flee, but when.”  In the preceding decades, he’d made plenty of it.  Those modest facilities hardly suggested the 56-year-old lawyer’s reputation, which had spread across much of eastern Kentucky even before his legal troubles began.      “I’m a traditional, boring lawyer,” he said, “who conforms, of course, to all the rules and regulations of the bar.” This was not true.   A years-long federal investigation ensued — until Conn, the judge and a psychologist were brought up on federal charges last year. Federal investigators accused Conn of bribing the judge and the doctor to approve his clients’ claims based on fake evidence, according to the Associated Press. They allegedly bilked the government out of nearly $600 million.  After his arrest, government witnesses warned that Conn was a flight risk.    And for a while, it seemed not to be. In March, the Associated Press reported, Conn pleaded guilty to stealing from the government and bribing a judge. He agreed to pay more than $50 million in reimbursements, damages and penalties to the government and Social Security employees who helped expose him.  But on Saturday, the FBI told the Associated Press that Conn had removed his monitoring device and disappeared. This was stunning,” Conn’s lawyer, Scott White, wrote to The Washington Post. He said he last saw his client on Friday, and had seemed intent on testifying at a hearing next week. “He gave every indication he both appreciated that there was a light at the end of the tunnel and he was able to make some amend for his admitted criminal conduct,” White said. “Now, he is just seen as the guy who took the coward’s way out.” With his law practice shuttered and his whereabouts unknown, Conn’s commercials are about all that’s left of his public image.  She calls out to him: “Eric, we need you back.” Conn turns and assures her in a gravelly voice: “I never left.”

Woosley never thought he’d be caught in ICE scheme, lawyer says

James M. Woosley thought he’d never get caught. Woosley, the former acting intelligence chief for U.S. Immigration and Customs Enforcement, didn’t appear to try to hide the embezzlement of more than $500,000 from the agency, according to his attorney, William C. Brennan Jr. In a fake travel voucher scheme, Woosley used his government e-mail account to direct at least one of his collaborators — who included several colleagues and a lover — to pay him kickbacks, or “rent” for a home he leased with fellow employees. “For reasons unknown, Mr. Woosley did not expect that this scheme would be uncovered, and took virtually no steps to conceal the criminal conduct,” Brennan wrote in a sentencing memorandum to the court. “Mr. Woosley understands that he now stands before the Court a thief.” Woosley was sentenced Friday in U.S. District Court in Washington to 20 months in prison. U.S. District Judge Amy Berman Jackson also ordered Woosley, 48, formerly of Tucson, to pay about $188,000 in restitution for the stolen money directly linked to him and to pay a $100 special assessment. He faces three years of supervised release. In May, nearly 15 months after he was walked off the job and placed on administrative leave, Woosley pleaded guilty to a charge of conversion of public money. He resigned from the agency in the fall. The scheme, which ran from about May 2008 to February 2011, involved intelligence workers under Woosley who submitted fake claims for reimbursement for hotel lodging, rental cars and other expenses. The highest-ranking official involved in the scheme, Woosley is the fourth of five defendants to be sentenced. The remaining defendant, William J. Korn, 53, faces sentencing later this month. Although Woosley received the most prison time of those sentenced to date, it’s unclear whether he was merely an enabling boss or the ringleader. For some, it doesn’t matter. “Bottom line: James Woosley violated the public trust in pursuit of his own greed,” Timothy Moynihan, director of the agency’s Office of Professional Responsibility, said in a statement. Woosley spent about 28 years in federal government. Much of that time was with the defunct Immigration and Naturalization Service, which was split up in 2002 with the formation of the Department of Homeland Security. He held positions in Los Angeles, Tucson, El Paso and the District, along with international posts, before he became the acting intelligence director in 2009. Discovery of the scheme sparked a top-to-bottom review of the agency’s Homeland Security Investigations intelligence office, which has about 450 employees and an $81.5 million budget. Cliff Landsman, who made Woosley his deputy when he was the Immigration and Naturalization Service’s assistant commissioner for intelligence, said his former employee’s actions were out of character. “I don’t understand what the goal of all of this was,” he said. Brennan said, “Mr. Woosley accepts his sentence, and is anxious to move on with his life.” The scheme began less than a year after Woosley met his future assistant and lover, Lateisha M. Rollerson, 38, of Bowie, while she worked part time at a Safeway in Arlington County and for another federal agency, court records show. He helped her get a job as a contractor writing intelligence reports, then as an agency employee and finally as his assistant. Together, they submitted false attendance forms and claims for fake travel and received payments from colleagues who had also filed fraudulent or inflated travel claims. Rollerson also counterfeited receipts, in some cases without others knowing it, court records show. Woosley and Rollerson, in turn, used the kickbacks, which totaled more than $100,000, to make mortgage payments for his house, invest in real estate and buy a boat. Rollerson was sentenced last month to 10 months’ jail time and ordered to repay $295,866. Ahmed Adil Abdallat, 64, of El Paso was sentenced to a year and a day, and Stephen E. Henderson, 62, of Asheville, N.C., got three months. They were also ordered to pay restitution, which tallied more than $116,392 for Abdallat and $54,387 for Henderson. In the sentencing memorandum, Brennan dismissed assertions by Henderson and Korn that Woosley was the ringleader and pressured them to participate. It was Rollerson, he argued, who concocted and carried out much of the plan, albeit with Woosley’s approval. “The scheme likely would not have begun or endured for as long as it did without Ms. Rollerson,” the memo says, “but would have never succeeded in the first place without Mr. Woosley.”

Medicare unveils new form to enlist seniors in fight against fraud

In the latest effort to enlist seniors in the fight against Medicare fraud, federal officials have overhauled Medicare billing statements to make it easier to find bogus charges without a magnifying glass. The new, more consumer-friendly format, which goes online Saturday on Medicare’s secure Web site, www.mymedicare.gov, includes larger type and explanations of medical services in plain English. The revised paper version, which is mailed to seniors every three months, will be phased in early next year. “You can make a difference!” the revamped statement says. “Last year Medicare saved taxpayers $4 billion – the largest sum ever reported in a single year thanks to people who reported suspicious activity to Medicare.” And for those who might need an incentive to scour their bills, the new statements promise a reward of up to $1,000 for a tip that leads to uncovering fraud. Although the bonus isn’t new, there’s no mention of it on current forms, which are sent to about 36 million beneficiaries in traditional Medicare. “We approached this redesign from the standpoint of making it a more consumer-friendly document for beneficiaries and also a better fraud-fighting tool,” said Erin Pressley, director of creative services for the Centers for Medicare and Medicaid Services. “If they are paying attention to these documents, they are going to be the best defense we have.” “It shouldn’t be a scavenger hunt,” she added. Currently, Medicare summary notices, as the billing statements are called, can run more than a dozen pages for those with multiple doctor visits and treatments and are full of medical jargon and abbreviations that often read like a secret code. That complexity can mask mistakes or out-and-out fraud that drive up Medicare costs and can jeopardize future services for beneficiaries, said Susan Johnson, project manager for Virginia’s Senior Medicare Patrol, a nationwide program that encourages seniors to ferret out fraud. Johnson said a few seniors have recently alerted her to double billing for laboratory tests in Fairfax County, suspicious home-health-care charges near Roanoke, and a wheelchair paid for but never received in Arlington. Tatiana Fassieux, a program manager in Northern California for the state’s Health Insurance Counseling and Advocacy Program, warns seniors that if Medicare pays for something they didn’t receive, such as a power wheelchair or physical therapy, Medicare could deny the claim when they really need it, because the services were already provided and paid for, at least on paper. Still, when she urges people to review their notices, she hears back the same complaint. “The reaction is that it is just too complicated,” she said. The redesigned form also aims to make Medicare services clearer and more accessible. “Consumer protection starts with making sure consumers not only get timely and accurate information, but that they understand what services they’re receiving from Medicare,” said Marilyn Tavenner, Medicare’s acting administrator. Filing an appeal if a claim is denied will also be easier. The new form explains what to do for those who disagree with a payment decision, how to get help filing an appeal, and offers a form that can be filled in and mailed to the address provided. Beneficiaries can also check the status of claims online and then use the online appeals form, instead of waiting to receive their statement in the mail. Expediting the process is important because many seniors can’t afford to pay for nursing-home care or other expensive medical bills and may go without the care they need, said Leslie Fried, Medicare advocacy director for the Alzheimer’s Association. Even seniors with supplemental insurance may face difficult financial choices because private insurers pay for benefits only after Medicare has paid its share. Only 2 percent of the 117 million claims denied in 2010 were appealed. Medicare officials spent almost two years on the revisions and received feedback from several rounds of focus groups with 163 seniors in 14 cities. Medicare consumer advocacy groups also made suggestions. Fassieux hopes the effort will pay off. “It looks more user-friendly,” she said. “But the proof will be in how beneficiaries react and if they will be more diligent in reading it.” Kaiser Health News is an editorially independent program of the Henry J. Kaiser Family Foundation, a nonprofit, nonpartisan health policy research and communication organization not affiliated with Kaiser Permanente.

This might be the most corrupt little town in America

CRYSTAL CITY, Tex. — Packs of dogs roam the streets in this small town about 120 miles outside of San Antonio, and dozens of vacant homes and businesses have their windows barred or boarded. The city council, which is supposed to run the government, has only one member not facing federal criminal charges, and the city manager, also charged, has been suspended. In recent weeks, the water from some residents’ faucets gushed out black. “It’s, like, this poor town,” said Tomasa Salas, 55, as she waited in front of city hall to pick up plastic jugs of water. “There is good here, too. You just got to dig really deep to find it.” The confluence of poverty and suspected political corruption has made Crystal City a national emblem of a small town gone bad, a place where nepotism festered for so long that the FBI had to bring in nearly 100 agents to clean it up. “If this is a wake-up call for all other towns and cities and other municipal areas, thank God,” said Councilman Joel Barajas, the only council member not facing a federal charge. The FBI has long waged a war against corruption in small towns across the country, but the problem seems to have grown particularly acute in the southern and western parts of Texas. In recent years, the feds have charged county officials involved in bid-rigging and kickback schemes, law enforcement officers who sold drugs they seized to other traffickers and even a state judge who took bribes for favorable rulings. The FBI’s San Antonio Division launched 23 public corruption investigations in 2012, 51 in 2013 and 64 in 2014, authorities said. In Crystal City, federal prosecutors alleged in early February that the majority of the council members were engaged in a conspiracy to help one another take bribes from those wanting to do business with the government, and one had an illicit side project: transporting illegal immigrants. Rob Saale, an assistant special agent in charge at the FBI’s San Antonio Division, said authorities in southern Texas are battling a “perfect storm” of factors that contribute to government malfeasance. The small cities are close to the border — where Mexican drug traffickers will pay officials to facilitate their trade — and the residents are generally poor. The median household income in Crystal City, according to the most recent census data, is $24,503. When money flows in from traffickers, state grants or other sources, Saale said, elected leaders, who are not paid for their duties, are tempted to take a cut. “When they are offered a $500, $1,000 bribe, that’s a very large sum of money for them,” Saale said. Residents in Crystal City had already filed a petition and court challenge to remove several council members when the FBI showed up, but replacing them has not been easy. The council needs three members present to form a quorum and call a recall election. So far, the panel has not been able to achieve it — although a judge on Thursday ordered three of them to show up and schedule the election for May, according to a lawyer in the case. Those who manage the town’s day-to-day affairs — the police chief, the city finance director, city clerk and wastewater superintendent — say they are trying to pay the bills, enforce the laws and generally keep up city services while figuring out what comes next. The people who live here say they have long complained about what was happening at city hall, and they welcomed FBI agents’ descending on the council members’ homes and offices. Saale said some residents cheered as agents searched city hall. “From day one, I been hearing that they all involved in shady stuff,” said 38-year-old Eloy Vera Jr., a regular attendee of council meetings who wants to run for council himself. “People are just upset. They want them out.” Known in some quarters as the “Spinach Capital of the World,” Crystal City erected a statue of the cartoon character Popeye outside city hall, and residents talk fondly of the festival held every year in honor of the vegetable. Many residents, who are predominantly Hispanic, work in the oil fields, the Del Monte plant or the school system. Corruption, of course, exists in big cities across the country, too, and Richard Durbin, the U.S. attorney for the Western District of Texas, said the dollar amounts involved in Texas cases are often minuscule by comparison. But Durbin said his office prosecutes even small-town officials because, unchecked, their misconduct can become “pervasive” and have real-life impacts on the people who elect them. “It undermines the fabric of what we all believe good government is, and that’s what’s so frustrating about it,” he said. Under normal circumstances, Crystal City is governed by five council members, including the mayor and mayor pro tem, who have council votes. Prosecutors charged one of them, Marco Rodriguez, in January with transporting illegal immigrants. They alleged in an affidavit that he admitted charging fees of $500 and $1,400 for trips to San Antonio. In February, they charged three more, as well as a former councilman and the city’s manager, with a range of corrupt dealings. Two — mayor Ricardo Lopez and councilman Roel Mata — have resigned, although the other two are facing the recall bid and the city manager has been suspended indefinitely. Barajas, 55, the councilman not facing federal charges, said he suspected malfeasance when he ran for office in 2015, but he did not know the scope. Had he lost, the entire Crystal City legislature might have been facing federal charges. Barajas’s opponent, Gilbert Urrabazo, 45, who is running for a county commissioner seat, was also among those charged. “I don’t know how it got to that, but it got there, and I think one of the main reasons is we had people that used their position for bad,” Barajas said. “I just pray for the rest of the councilmen.” In a 14-page indictment, federal authorities alleged Lopez, 40, and Crystal City’s manager, 54-year-old William James Jonas III, helped a man named Ngoc Tri Nguyen set up illegal gambling parlors in the city by waiving some tax payments, making sure Nguyen passed inspections and working to shut down a competitor. In exchange, federal authorities alleged, Nguyen, 38, who is known around town by the moniker “Mr. T,” gave Lopez $6,000 to buy a vehicle. Attorneys for Roel Mata and his brother Rogelio declined to comment. Attorneys for Jonas, Rodriguez and Urrabazo — and the men themselves — did not return phone, email and handwritten messages. An attorney for Nguyen declined to comment. Maria Sanchez Rivera, 67, a former councilwoman and mayor, said Jonas revoked her permit to operate a legal gambling-machine business that gave out prizes instead of cash in the fall of 2015, and he offered no explanation. “They were trying to eliminate all of them, so he would be the only one,” Rivera said. Federal authorities also alleged Jonas took $7,791 from a contractor to direct work that contractor’s way, while several other current and former council members — Rogelio Mata, 43, and Roel Mata, 44, along with Urrabazo — took a total of $4,500. In a separate instance, federal authorities alleged, Jonas told a contractor to hire an attorney to negotiate with the city, then asked the attorney to secretly give him a portion of the fee the contractor was paying. Neither contractor was identified, and the city clerk declined to identify them or immediately release records that might do so. The FBI also declined to identify them. Federal authorities alleged the men also approved a lucrative, controversial salary of more than $200,000 for Jonas, who doubled as the city’s attorney, because of Jonas’s work soliciting bribes. It remains unclear what sparked the probe, but officials familiar with the case said the FBI had been investigating for at least three years. The federal charges were in some ways just the beginning of Crystal City’s problems. The next day, the water turned black in some parts of the city — a problem Wastewater Superintendent Carlos Ramirez said was caused when a years-overdue cleaning of a water tank inadvertently sent sediment pumping through the system. Ramirez said workers have flushed the system, and state and city tests showed the water is safe. Sitting on a rusted swinging porch on his front lawn, Lopez, the now-resigned mayor, said the city “has been corrupted for many years” and his former colleagues on the council “do not understand a conflict of interest.” He declined to discuss the federal charges in detail. “If I did something wrong, it will be in a court of law to prove that,” he said. Lopez said he would run again for mayor in May and, eventually, lieutenant governor or governor. “Because these little towns,” he said, “they need help.” What will happen next in Crystal City, which has a general fund of about $3 million, is largely unclear. Lawyer Javier Villalobos, who is representing residents in the recall bid, said if council members disobey the judge’s order to schedule a recall election, “I’ll be there probably Wednesday morning and filing a contempt and trying to put them in jail.” No provision in Texas law allows the state to take over Crystal City’s government, said Bennett Sandlin, executive director of the Texas Municipal League, an organization that represents cities in Texas, including Crystal City. “There’s literally no solution,” Sandlin said, adding that other cities have also had problems producing a quorum. “You just have to wait until the next election fills the vacancy.” **Read more:** Here’s the fascinating political backstory of Crystal City

She was pregnant and broke. She signed up for Uber — and fell into debt.

Maya Warren sat in a hospital bed, clutching her stomach. Through the contractions, she tried to focus on the baby. But she thought instead of her bank account. “Hand me my backpack,” Warren told her mother, crouched at her bedside. Earlier that November day, she had paid a dollar for a scratch-off card, worth up to $777. Now she scraped away the silver. “Oh, damn it,” Warren said, wiping sweat from her forehead. “I didn’t win.” “How you gonna be in labor and scratch on a scratch-off?” her mother teased. Warren laughed, blinking back tears. She wasn’t supposed to give birth to her first child with no money. She had held the same full-time job in Washington for five years, living paycheck to paycheck. She’d wanted to stash away _some_ financial cushion, and now . . . “We needed that,” she said, flinging away the worthless card. “We needed that.” Like an estimated quarter of working mothers in the United States, Warren will return to work less than two weeks after childbirth, whether she’s ready or not. That’s partly because the United States is the only industrialized nation not to guarantee any paid time off to new parents. For years, Democrats have championed a stronger safety net, one that would replace lost wages as life’s expenses surge. Republicans have called such a federal mandate a “job killer” that would burden businesses. During the campaign, however, Donald Trump became the first Republican presidential nominee to pitch a national paid family leave program, proposing new mothers could apply for the benefit through the country’s unemployment insurance system. Now his older daughter Ivanka, recently installed as a West Wing adviser, is tasked with aiding the administration’s push to turn the idea into law. Meanwhile, low-income women are exploring their own alternatives to paid maternity leave, with some turning to the gig economy. But for Warren, a lottery ticket still seems a better bet. **$20,000 a year** Maya Warren, who turned 32 last week, is a home health aide for Maxim Healthcare Services, a medical staffing company in Washington. She gives elderly patients baths and reminds them to take their pills. She monitors their comfort, fluffing pillows and pouring glasses of water. As an hourly worker, she usually earns about $300 a week. Even with overtime, her annual pay of about $20,000 last year ranks her among America’s working poor. Warren accepted the job because she sees herself as a natural caretaker. After high school, she took general education classes at a community college before landing at an air force base, watching kids at a day-care center. She quit to tend to her cancer-stricken grandfather — “my favorite person,” she called him. She stayed with him until he landed in hospice. For those two years, to make ends meet, she worked at a nightclub in Maryland. In 2010, Warren googled “home health aide jobs,” found Maxim and scored an interview. She didn’t think to ask about benefits. She prioritized a regular schedule. She can’t rely on much help from her baby’s father, who she said lacks steady income. She sees herself as a single mother. The country provides one protection to bread-winning parents, and it comes with caveats. The Family Medical Leave Act, enacted in 1993, ensures workers can take up to 12 weeks of _unpaid_ leave after a birth, as long as they’ve logged at least a year at a company that employs more than 50 people. Some businesses cover the gap: As of 2016, 58 percent of firms replace at least some wages during maternity leave, and 12 percent do the same for paternity leave. Moms and dads who lack paid family leave typically rely on savings or loans or credit cards to get by. An estimated 30 percent of workers who take leave slip into debt, according to a 2012 federal survey. Myra Strober, a labor economist at Stanford University, says low-income parents are the least likely to have any paid leave — and the most likely to encounter financial hardship as their family grows. “They’re easier to replace,” Strober said. “The employer hasn’t had to invest much in training that worker.” According to the Labor Department’s latest breakdown, construction workers are the least likely to receive paid family leave (5 percent can get it), followed by hospitality workers (6 percent), utility laborers (7 percent) and those in the service industry (8 percent). In education and health services — the category into which Warren’s job falls — 19 percent of such laborers have the benefit. Maxim, her employer, has roughly 60,000 workers across the country and doesn’t provide paid family leave to home health aides, a profession with a median annual wage of $21,920. Maxim declined to comment on Warren’s situation or why it does not provide paid family leave. The company said, “Maxim follows strong and appropriate policies to ensure that all employees — including pregnant employees — are treated fairly and protected from discrimination.” The company gives workers the chance to buy temporary disability insurance, a spokesperson said, and the cost “depends on the amount of coverage selected.” For Warren, that would have been $300 monthly. She felt she couldn’t afford it. She was at work when pain gripped her lower belly. She blamed the fibroids, the tumor-like masses that crowded her uterus. She had dealt with them for seven years. This time, though, the discomfort led her to the emergency room, a visit her Medicaid insurance would cover. She told the doctor about the fibroids. The doctor told her the baby was fine. The baby? She didn’t think she could get pregnant. Her condition made it tough to conceive and carry a child, according to her googling. Disbelief gave way to joy. This was it: her chance to become a mother. All at once, the scramble to save money began. **A campaign promise** Two months before Election Day, before a suburban Philadelphia crowd, Trump unveiled his plan for paid maternity leave. He credited Ivanka Trump, a mother of three, with inspiring the idea. He also was polling poorly among female voters (and ended up losing among women to Hillary Clinton by 12 percentage points). As president, Trump said, he would open the unemployment insurance system to new mothers. Currently, the state-run programs float cash only to laid-off workers. Under his policy, the average weekly maternity benefit, per his campaign, would be roughly $300 for up to six weeks — enough to replace Warren’s lost wages. She could apply for the aid with a recent pay stub. Adoptive parents and fathers, according to Trump’s blueprint, wouldn’t qualify. Democrats slammed his proposal as too narrow. Republicans, for their part, generally don’t support expanding entitlements, saying it is costly to taxpayers and likely to add to the national debt. House Speaker Paul D. Ryan (R-Wis.), for example, has voted against paid leave programs, instead supporting measures that would allow workers to accumulate time off in lieu of overtime pay. “I don’t think that sticking up for being a person with balance in your life, for wanting to spend your weekends in your home with your family . . . I don’t think that means signing up for some new unfunded mandate,” Ryan told CNN in a 2015 interview. (He hasn’t commented on Trump’s plan.) Some business leaders, especially at small firms, would rather not absorb the cost. But others see the value in offering the benefit, since research has shown it can increase worker loyalty and reduce turnover. Trump said the plan wouldn’t cost an extra penny, that he would fund it by quashing fraud in the unemployment insurance system, which government estimates put at $3.2 billion in 2015. That, Trump said, would be more than enough to support his program, priced at $2.5 billion. However, no more than $900 million of the overpayments — benefits sent to deceased or employed folks, for example — were clawed back in 2015. The president hasn’t mentioned his paid maternity leave plan since taking office, but Ivanka Trump has been hosting Republican lawmakers at the White House in an attempt to drum up support for it. As of now, enthusiasm appears to be scarce. Sen. Kirsten Gillibrand (D-N.Y.), the left’s de facto leader on paid family leave, has introduced a bill on Capitol Hill that would give new parents, regardless of gender, 12 weeks of paid time off at two-thirds of their pay. To fund the program, workers would give up 0.2 percent of their salary, and employers would match that — an average contribution of $2 a week, she said. The paid leave movement is spreading. California, New Jersey and Rhode Island all cover wage loss for new parents, and San Francisco, New York and the District have approved similar measures. New parents without the public benefits rely on employer generosity or family members or luck. Warren threw herself into work. **Hours — and money — dry up** Before Warren’s pregnancy started to show, she said, her home health aide shifts began dwindling — from five a week to three, sometimes two. Maxim said that, in general, hours depend on demand. “Because they are paid by the hour, full- or part-time employment status is driven by a combination of client need and employee preference,” the company said. Warren’s weekly pay shrank to $150. The expenses — for food, gas, her $400 monthly rent, clothes for her growing body, baby wipes, the occasional manicure when life felt heavy — piled up even as she tried to save. She needed a side hustle. Warren knew people who drove for Uber and enjoyed the extra cash, so she pawned a gold ring to rent a car through the ride-sharing service. For one payment of $350, she could drive away in a Nissan Altima. Then $215 would be deducted each week from her Uber paycheck. If she didn’t drive enough to cover the payments, Uber’s partner in the deal, Enterprise, would charge her card on file. In Washington, Uber drivers pull about $15 an hour, on average, according to Glassdoor salary data. Because they’re contractors, though, the money arrives pretax, so Warren would have to remember to set aside some earnings for Uncle Sam. She signed the contract. By October, Warren planned to care for her patients by day and morph into a chauffeur at night. She aimed for 75 rides each week. She still owed about $5,000 in student loans, $500 from old hospital visits and $300 in overdue cellphone bills. Debt had trailed her for years, and interest swelled over time. She wanted to pay it all off before the baby came. Banish the collectors, the stress. But the week before Warren went into labor, a cashier at Chick-fil-A said her debit card had been declined. She prayed it was a mistake, but deep down, she knew: The cash was gone. She couldn’t even buy a chicken sandwich. Warren went into labor at the end of November, right after she had moved back in with her mother in Southeast Washington. The baby didn’t budge for two nights, so the doctor advised a Caesarean section. Some 90 minutes later, he eased into her arms. She cupped his tiny feet. She kissed his nose. She named him Kortez Isaiah. It was a major surgery. The doctor recommended 12 weeks of rest — four more than usual because of her fibroids. Again, Warren thought of money. She had a car seat from a Capitol Hill charity, a breast pump from her neighbor, a bassinet from her mom, and food stamps. She had been driving for Uber as much as she thought she could. From Oct. 10 to Nov. 21, according to her pay statements, she had banked $1,458 — an average weekly wage of $243. That barely covered the rental cost. Not to mention the gas. **Back to work** Six days after leaving the hospital, Warren sat at her mother’s kitchen table, staring at her car keys. Kortez slept nearby in his bassinet. Home health aide shifts — eight-hour days on her feet — were out of the question. Her boss had told her to come back after six weeks. Driving, Warren thought, was probably a better option — though the doctor had told her not to slide behind the wheel for two weeks. She would not take any pills for the pain. Her mom, she thought, had been so generous. Without her, Warren figured she would be homeless. She was breast-feeding Kortez, so baby food came free. Soon, though, they would run out of diapers. She wanted to be the one to buy more. She hadn’t gotten her mom’s ring back, either. She wondered if it was still at the pawnshop. Warren stood up. Her swollen stomach burned. Every step brought a new jolt. “Ow,” she would say to no one. She put on her black jacket with a faux-fur hood. She shuffled to her mother’s driveway. She opened the car door (“ow”), eased into the driver’s seat (“ow”) and started the engine (“ow”). Warren picked up a woman with a suitcase who wanted to go to a house in Temple Hills, Md. — a 15-minute ride. That would net her $7.03. She willed herself to ignore the bumps in the road. She hoped the passenger didn’t expect her to pop the trunk and hoist out the luggage. Six weeks later, pain would still sting her abdomen, and Warren would owe Uber $1,400 for the rental car. (Uber, which looked into Warren’s account for The Washington Post, said she began missing rental payments after her fourth week of driving.) She would also face a $600 damage charge. Someone had sideswiped the Altima while it was parked on her mother’s street. The crash would coincide with her postpartum checkup, the six-week medical milestone, where the doctor would tell her to get more rest — she needed more time in bed to recover. Warren knew she’d be back on the road that afternoon. _Correction: An earlier version of this article incorrectly reported workers’ contributions under Sen. Kirsten Gillibrand’s bill. They would average $2 a week._

A comprehensive investigation of voter impersonation finds 31 credible incidents out of one billion ballots cast

This sort of misdirection is pretty common, actually. Election fraud happens. But ID laws are not aimed at the fraud you’ll actually hear about. Most current ID laws (Wisconsin is a rare exception) aren’t designed to stop fraud with absentee ballots (indeed, laws requiring ID at the polls push more people into the absentee system, where there are plenty of real dangers). Or vote buying. Or coercion. Or fake registration forms. Or voting from the wrong address. Or ballot box stuffing by officials in on the scam. In the 243-page document that Mississippi State Sen. Chris McDaniel filed on Monday with evidence of allegedly illegal votes in the Mississippi Republican primary, there were no allegations of the kind of fraud that ID can stop. Instead, requirements to show ID at the polls are designed for pretty much one thing: people showing up at the polls pretending to be somebody else in order to each cast one incremental fake ballot. This is a slow, clunky way to steal an election. Which is why it rarely happens.  To be clear, I’m not just talking about prosecutions. I track any specific, credible allegation that someone may have pretended to be someone else at the polls, in any way that an ID law could fix. So far, I’ve found about 31 different incidents (some of which involve multiple ballots) since 2000, anywhere in the country. If you want to check my work, you can read a comprehensive list of the incidents below.  Some of these 31 incidents have been thoroughly investigated (including some prosecutions). But many have not. Based on how other claims have turned out, I’d bet that some of the 31 will end up debunked: a problem with matching people from one big computer list to another, or a data entry error, or confusion between two different people with the same name, or someone signing in on the wrong line of a pollbook.               [8] N.C. State Board of Elections, Documented Cases of Voter Fraud in North Carolina, Mar. 11, 2013, http://www.democracy-nc.org/downloads/SBOEFraudMemo2013.pdf.  [10] South Carolina Law Enforcement Division, Investigative File #32-12-0008, June 4, 2013, at 4-8, 380-89, 404-13, 475-76, http://www.scribd.com/doc/155615207/SLED-Investigation-Into-Voter-Fraud. [11] Deposition of Major Forrest Mitchell, Texas v. Holder, No. 1:12-cv-00128, Doc. 229-16 (D.D.C. June 15, 2012), at 162-167.            [23] Panio v. Sutherland, 790 N.Y.S.2d 136, 141 (2005). [24] Milwaukee Police Dept., Special Investigations Unit, Report of the Investigation into the November 2, 2004 General Election in the City of Milwaukee, at 61. [25] N.C. State Board of Elections, Documented Cases of Voter Fraud in North Carolina, Mar. 11, 2013, http://www.democracy-nc.org/downloads/SBOEFraudMemo2013.pdf.   [28] City Commissioner Al Schmidt, Voting Irregularities: Voting Irregularities in Philadelphia County, 2012 Primary Election, July 2012, at 16-18. [29] Michigan Auditor General, Performance Audit of the Bureau of Elections, Report No. 231-0235-11, May 2012, at 15, http://audgen.michigan.gov/finalpdfs/11_12/r231023511.pdf. [30] Michigan Auditor General, Performance Audit of the Bureau of Elections, Report No. 231-0235-11, May 2012, at 16, http://audgen.michigan.gov/finalpdfs/11_12/r231023511.pdf. [31] Transcript, Texas v. Holder, Case No. 12-00128 (D.D.C. July 9, 2012) (vol. I, A.M. Session), at 65-67 (testimony of Texas Director of Elections Keith Ingram).    [34] Application and Affidavit for Arrest, Nevada v. Segura Segura, Case No. RCR-2014-076362 (Nev. Justice Ct. Reno Township Mar. 12, 2014). [35] Deposition of Major Forrest Mitchell, Texas v. Holder, No. 1:12-cv-00128, Doc. 229-16 (D.D.C. June 15, 2012), at 167-172.        [43] United States v. Brown, 494 F. Supp. 2d 440, 486 n.73 (S.D. Miss. 2007).

John Sopko is fighting corruption in Afghanistan, and making noise while he’s at it

“I still get upset about this,” says John Sopko, a normally good-natured government investigator now simmering with indignation in his Crystal City office. “You’re talking 600 million dollars.” His meaty hands clasp a model of an Italian-made military aircraft, known as the G222, that the United States bought for the Afghan air force. “It’s notorious. It falls apart,” he says, jostling the replica. Wings and propellers shed on cue. “Basically, it was described to me by pilots as a death trap.” Sixteen of the planes sit uselessly at Kabul’s airport. Sopko has seen a lot of inexplicable waste in his two years as special inspector general for Afghanistan reconstruction, but his eyes expand with incredulity over this example. “Why did we buy $600 million worth of aircraft that doesn’t fly?” His job is to find out. To that end, the former mob prosecutor and congressional oversight sleuth says he has launched a criminal investigation into the airplane purchase. It’s just one of 340 ongoing probes by his office into corruption, fraud and waste. Washington has more than 70 inspectors general for its agencies, independent watchdogs mandated by law and ideally immune from political pressure. But none of them make as much noise on a regular basis as Sopko. He constantly rattles the Pentagon, defense contractors and U.S. assistance agencies, blasting out reports and media releases at the rate of roughly one a week, putting eye- popping dollar figures in the headers: “Afghan Ministries Unable to Manage & Account for $1 Billion in US Funds,” blared an e-mail this year. Another: “Weaknesses in $223 Million Justice Sector Program.” Most investigations spring from informants’ tips and auditors’ hunches about high-dollar programs. But Sopko spends time on the ground in Afghanistan sniffing for malfeasance: The airplane investigation began last year when he noticed the G222s rusting on the runway in Kabul. It turned out they had been contracted for in 2008. Acquaintances describe him as relentless, irreverent and remarkably candid for a Washington type. “He is not worried about his image,” says Marc Smolonsky, a former Health and Human Services official and oversight committee investigator in the House and Senate. “He is not worried about offending anyone.” In well-worn khakis and a faded blue shirt, Sopko, 61, looks out of place in his spacious corner office on the same floor of a building that houses Northrop Grumman. But he fits the image of a hard-working guy from Ohio whose forbears were coal miners. Sopko says he has two heroes. That poster on the wall of Winston Churchill, clenching a cigar, clutching a Tommy gun? He’s one. And . . . ? “Him and Hunter Thompson,” the inspector general says. Aha. John F. Sopko, the Gonzo IG — or at least as gonzo as Washington can tolerate. Sopko oversees one of the most difficult and dangerous civilian assignments left in Afghanistan as Uncle Sam extracts himself from that 13-year slog, the longest U.S. war. He commands an agency with a staff of 200 people — 55 of them in Afghanistan, where only 20 percent of the country is considered secure. The stocky half-Italian, half-Pole, with his pocket full of subpoenas, has taken on the biggest wartime rebuilding mess in U.S. history. Since 2002, U.S. taxpayers have spent $103 billion to reconstruct Afghanistan — more than we’ve spent on any other single country for that purpose, Sopko says. More than on postwar Germany, the United Kingdom or Japan. “When you consider what this guy is up against,” says Dan Moldea, an author and organized crime expert who’s known Sopko for more than 30 years, “he better be a gonzo.” “You have Sopko going after the war profiteers in Afghanistan and even in the United States,” Moldea says. “It’s John against the world right now. . . . To hell with the consequences.” As IG, Sopko can demand documents, take depositions and refer cases to the Justice Department for prosecution. (He also may carry a gun but declines to do so.) In his tenure so far, he has scored 42 convictions and recouped or saved $256 million, his office says. It’s impossible to calculate how much was squandered or stolen in Afghanistan at this point, but Sopko says he knows why it happened. “To some extent, we just came in and threw the money in and thought we were in Kansas,” says the IG, reposing on a rainy Friday afternoon on his office’s camelback couch. “Sometimes I feel like Dorothy and Toto; you know, I walk out there: ‘This sure isn’t Kansas, guys.’ ” Besides recovering ill-gotten gains, busting bribe-takers and the like, SIGAR — the acronym for the office, pronounced _cee_ -gar — also produces recommendations on how to never repeat what Sopko calls the “disaster” of Afghan aid. Namely: Don’t give a horribly corrupt, desperately poor country gobs of money with little oversight. “The guy getting screwed is the taxpayer,” he says. “The guy getting screwed is the honest Afghan who sees the money going to the dishonest Afghan.” Another $18 billion has been appropriated for Afghanistan reconstruction but not yet disbursed. And beyond that, the United States has committed to a decade of funding, says Sopko, who takes no position on whether it’s wise for the United States to keep pumping money into Kabul’s coffers. “Look, I’m no Pollyanna here,” he says. Theft and bribery are thwarting future corporate investment and hindering the Afghan government’s ability to collect revenues, he says. The Taliban insurgency is bad enough, but chaos also looms if corruption scotches the “fragile gains” achieved so far, Sopko says. “And we basically could lose the hearts and minds of the Afghan citizens, and that’s why we’re there,” he says. Can it be turned around? “That’s a tough one,” he says. “A really tough one.” Sopko says he always wanted to prosecute criminals. One chilling childhood memory in particular may help explain why. “My mom grew up in an Italian neighborhood and used to tell me horror stories about the Black Hand, the Mafia, La Cosa Nostra,” he remembers. Here’s one: As a girl, his mother was visiting a friend whose father was rich; they were playing with dolls. “A shot came in the window and blew a doll’s head off,” Sopko says. Apparently, the mob was extorting the girl’s father. “It was an image of the evil out there,” Sopko says. The son of New Deal Democrats, he went to law school in Ohio, then worked as a state prosecutor before joining the Justice Department’s organized-crime strike force in 1978 in Cleveland. By then, the city was known as the bombing capital of America thanks to a war between Irish and Italian crime families involved in labor racketeering, extortion, gambling and prostitution. Sopko proved himself to be a tireless young Turk, making cases that brought down the hierarchy of the city’s Italian mob. His biggest score was convicting the elderly family capo James Licavoli, a.k.a. Jack White. “Watching him working in trial was both inspirational and entertaining,” recalls Doug Domin, then an FBI agent. “He was fearless in the courtroom.” In 1982, Sopko left Cleveland for Washington to be minority counsel for the Senate Permanent Subcommittee on Investigations and never returned. He worked as a Capitol Hill staffer for more than 20 years, doing oversight investigations on subjects as diverse as health insurance, cybersecurity, biological terrorism, organized crime and the proliferation of weapons of mass destruction in the post-Soviet era. His office overflows with mementos from those days. Slung on the back of a door is a black messenger bag with an orange patch that says, “Think before spilling anthrax.” Nearby is a box of Iranian laundry detergent emblazoned with its brand name in English: “Barf.” Sopko says his wife, Nancy Lubin, picked it up in her travels. He met Lubin in the 1980s when she was a Sovietologist in the federal Office of Technology Assessment. Essentially, they bonded over organized crime, he says. She’s an expert on Central Asia and the Caucasus — and the Russian mob. They have a daughter who wants to be a sportswriter. Sopko held ranking posts in the Commerce Department during the Clinton administration in the 1990s, handling responses to an onslaught of congressional and grand jury investigations. During the George W. Bush era, he did a stint as deputy director of the Homeland Security Institute, producing studies and policy recommendations for the Department of Homeland Security. “I used to say I ran a think tank for a brain-dead agency, the DHS,” he gibes. In 2012, Sopko quit a comfortable partner’s position at a white-shoe law firm to take the IG job. He set about finding auditors, diggers and law-enforcers brave enough to work in Afghanistan. Sopko called his old mob-busting FBI buddy from Cleveland, Doug Domin. “I’m putting the band back together,” he told Domin. Three decades had passed, but the retired G-Man eagerly signed on to be Sopko’s chief investigator. “In Washington, there are two ways to make investigations effective,” says Smolonsky, the former House and Senate staffer. “One way is to put people in jail, which obviously gets attention. The second is to make the results as widely public as possible.” Sopko frequently sends his findings to reporters ahead of their official distribution. That way he can knock his opponents — usually in the military and State Department — back on their heels with preemptive good publicity for SIGAR. At a recent hearing on the Hill, Sopko accused the U.S. Agency for International Development of failing to produce documents to Congress. A USAID official, Larry Sampler, was forced to rebut those allegations, supplied by Sopko’s office and published in USA Today the morning of the hearing. It was far from the usual scripted, genteel interactions between top agency bureaucrats. “I need to correct the record,” Sampler told a hostile House Oversight and Government Reform subcommittee. “The allegation that we covered up information coming to Congress is false, and I find it somewhat offensive.” The men did not exchange handshakes or other pleasantries after the session. In Afghanistan, the military worked up a public affairs strategy to neutralize Sopko — to knock down his audit reports and inspections preemptively, before they became public, by citing corrective actions the military had taken. As first revealed by USA Today, a slide presentation prepared for the top U.S. general in Afghanistan said the best way to beat Sopko was for the military to gather its ammunition and fire first; it knew what was coming, having gotten advance notice of the IG’s audits and investigations. “In the past we may have shot where we saw the duck, but now, with our plan of action — we will bag our limit of birds before Mr. Sopko wakes up to feed his dogs,” the presentation said. When he was a kid delivering newspapers in Cincinnati, Sopko says, he developed an awareness of the media’s mission. His wagon was loaded with the Cincinnati Post and Times Star, a Scripps paper. He can still summon the lighthouse beams of its logo and the slogan: “Give light and the people will find their own way.” “Maybe that stuck,” he reflects today. SIGAR’s office walls are hung with framed enlargements of articles from The Washington Post, the New York Times and the Los Angeles Times citing SIGAR’s work. He delights in exposing such white elephants as a lavish new $34 million headquarters that U.S. commanders told The Post they didn’t want and is likely to be demolished without being used. “There’s a general, I used to call him General Huff and Puff; he would call up every time his boss’s picture was in the paper,” Sopko recalls. “I said, ‘Let’s talk about the problem you can fix, and your boss’s picture won’t be in the paper.’ ” “The press is part of the solution,” Sopko insists. “It’s not an enemy!” Very kind of him to say so. “But, yeah, I use the press,” he says later, then quickly backpedals. “I don’t use it. I work with it.” One rap against Sopko could be that he likes to grandstand and embarrass his targets. After all, shining a harsh light on them reflects glory back to him. “Well, I don’t like to embarrass people for the sake of embarrassing people,” he says. “I’m not evil. I don’t like to pull the wings off of flies, either. But embarrassment has been a recognized tool in the criminal justice system.” Sopko has long wanted to be an inspector general, say those who know him well. “I was fat, dumb and happy” in private practice, he says. “I was making a lot more money than I am now.” As much as he loves to schmooze, now he has work to do — ordinary stuff, nothing gonzo. “Catch some crooks,” he says.

How to protect yourself from medical identity fraud. A first step: Don’t tweet health issues.

Most of us tightly guard our credit cards and bank account numbers, but health insurance policy numbers are also prime targets for thieves. An estimated 1.84 million people were victims of medical identity theft in 2013, according to the Poneman Institute, a research organization, which expects that number to rise. Victims often don’t realize they’ve been targeted until they discover a drop in their credit score or until a collection agency comes after them for unpaid medical bills, says Jim Quiggle, director of communications for the Coalition Against Insurance Fraud, a group that includes insurers, consumer activists and government officials. While most of the cost of medical identity theft is borne by the health-care industry and government, the Poneman Institute estimates that about 36 percent of victims in 2013 incurred out-of-pocket costs such as reimbursements for services provided to impostors, legal fees and identity protection services. The average cost for these victims amounted to $18,660; in a few cases, it exceeded $100,000 Medical identity theft can happen in several ways. In one common scenario, the criminal persuades a consumer to divulge his health insurance number. Strategies for collecting these numbers can be highly sophisticated, especially when crooks operate in teams,Quiggle says. “They might invite seniors to bogus health fairs where they take their blood pressure and give them some nutritional supplements and ask to see their Medicare cards.” Jennifer Trussell, who investigates medical identity theft for the Department of Health and Human Services’ Office of Inspector General, has seen cases where criminal rings target senior centers or homeless shelters and offer people $50 for, say, their Medicare number. “That information is sold again and again,” she says. Even though the victims in these instances voluntarily share their numbers, they may not realize the impact, Quiggle says. “They’ll discover to their horror that their Medicare account is being rifled and even maxed out by thieves who are making false claims against their policy.” Some cases are perpetrated by employees of medical offices or even health-case providers. Trussell worked on a case involving an Iowa chiropractor who had lifted the names and dates of birth of more than 200 patients to collect fraudulent Medicaid payments. In another case, a Baltimore pharmacy owner and two employees were indicted for allegedly submitting bogus claims for prescription refills to Medicaid and Medicare. Sometimes medical identity theft happens with the cooperation of the victim, who allows a family member or acquaintance to use his health insurance card to obtain care. Poneman Institute founder Larry Poneman says these “Robin Hood” crimes comprised 30 percent of the medical identity thefts his group studied in 2013. Giving your insurance number to someone in need might seem like a generous thing to do, but it’s still a crime and you could suffer consequences if the visits rack up bills that go unpaid or result in incorrect additions to your medical records, Poneman says. If an impostor’s blood type or medical condition gets added to your record, you could end up receiving inappropriate or even life-threatening treatment. Electronic medical records make your medical data easier to steal, because any clerk with access to patient records can load patient information onto a thumb drive and sell it to cronies or crime rings, Quiggle says. And because the Internet makes electronic records easy to share, tracking down all the providers who have received incorrect data can be difficult. So how do you protect yourself? Never give your medical identity credentials to anyone but those with a legitimate reason for needing this information, such as the billing person at your doctor’s office, Quiggle says. Treat with suspicion anyone who asks you for your insurance number without a good reason, and never give these numbers to telemarketers or callers conducting “health surveys.” Closely scrutinize the “Explanation of Benefits” or “Medicare Summary Notice” documents that are sent to you to make sure that you actually received the services and products listed, he says. If you see anything suspicious, ask to see your medical record to look for mistakes or evidence that your identity has been compromised. “A lot of people don’t realize that they have the right to read their medical records,” Poneman says. He recalls a case where a woman who stood more than 6 feet tall went in for bypass surgery; her medical record, however, showed that she was just over 5 feet tall because, unbeknown to her, an impostor had used her identity to receive care. Had she been given anesthesia and other drugs based on the impostor’s size, she could have faced serious problems with the surgery. Think twice before sharing detailed medical information on social media, Trussell says. Posting a medical diagnosis on social media is akin to posting your address along with the dates that you’ll be away on vacation. An impostor could use that information to obtain services that might not raise red flags with your insurer. For instance, if you tweet about your diabetes diagnosis, Trussell says, it’s possible that “next thing you know, you’re getting diabetes test strips you didn’t order or receive billed to your insurance company.” If you discover that your medical identity has been stolen, your first step should be a call to the police, Ponemon says. Next, call the Federal Trade Commission’s identity theft hotline, 877-ID-THEFT or report the problem online at www.ftc.gov/idtheft. Report Medicare- or Medicaid-related crimes to oig.hhs.gov/fraud/hotline or by calling 800-HHS-TIPS.

Former Illinois congressman with ‘Downton Abbey’ office is indicted

Aaron Schock, a former Illinois congressman whose Capitol Hill office was decorated in the style of the TV show “Downton Abbey,” and whose six-pack abs landed him on the cover of Men’s Health, was indicted Thursday on charges that he misspent government and campaign money for his personal benefit.  “Like many Americans, I wanted to have faith in the integrity of our Justice Department,” Schock said in a statement. “But after this experience, I am forced to join millions of other Americans who have sadly concluded that our federal justice system is broken and too often driven by politics instead of facts.” He said he was eager to “defend my name and reputation in a court of law.” Schock was charged in a 24-count indictment with wire fraud, mail fraud, theft of government funds, making false statements and filing false documents. The 52-page document spells out a broad array of misdeeds spanning 2008 to 2015. The indictment alleges that the former congressman from Peoria, Ill., reimbursed himself for 150,000 miles he never drove, bought a new 2015 Chevrolet Tahoe for his exclusive use with campaign committee funds, and reimbursed himself with congressional funds for camera equipment purchased for himself and his personal photographer. It alleges that Schock used government and campaign money to take a private plane with a group to Chicago for a Bears football game, and remodeled his Illinois apartment and Capitol Hill office — paying those who did the thousands of dollars worth of work at least in part from government and campaign funds. Schock also, according to the indictment, accused a former staffer of inappropriately accessing a friend’s social media account and falsely claimed the FBI and Capitol Police were investigating — prompting the former staffer’s father to hire a lawyer. All told, Schock caused the government and his campaign committees to lose more than $100,000, authorities said. “These charges allege that Mr. Schock deliberately and repeatedly violated federal law, to his personal and financial advantage,” U.S. Attorney Jim Lewis in Springfield, Ill., said in a statement. “Mr. Schock held public office at the time of the alleged offenses, but public office does not exempt him or anyone else from accountability for alleged intentional misuse of public funds and campaign funds.”  But in early 2015, the Office of Congressional Ethics began looking into how Schock spent taxpayer money, including the tens of thousands used to decorate his Capitol Hill office in the style of the PBS show “Downton Abbey.”  The dust-up was soon followed by even more reports about Schock’s spending on concert tickets, trips and other travel. Schock said in his statement that the coverage was “overblown and inaccurate” and that, at worst, his team “might have made errors among a few of the thousands and thousands of financial transactions we conducted, but they were honest mistakes — no one intended to break any law.” “I simply cannot believe it has come to this,” Schock said. “However, we are here not by my choosing. But since we are where we are — I intend to not only prove these allegations false, but in the process, expose this investigation for what it was.” George J. Terwilliger III, Schock’s attorney, said in a statement that the indictment against Schock “will look bad, but underneath it is just made-up allegations of criminal activity arising from unintentional administrative errors.” He said prosecutors were misusing their power in pursuing the former congressman. “Criminalizing a handful of administrative mistakes, a few of the thousands of transactions from Aaron’s 6 years in office, to charge Mr. Schock two days after a national election has all the appearances of a politically calculated ambush,” Terwilliger said. For this part, Schock seemed to compare his case to the investigation into Hillary Clinton’s use of a private email server while she was secretary of state — an inquiry that ultimately produced no charges. “Unlike some politicians, I did not delete any emails, nor did my staff smash or destroy any electronic devices,” Schock said. “Quite the opposite, every record, every document, every picture on the wall was left behind. I took nothing with me. I knew I had nothing to hide, and I believed that a quick review would prove this fact.”

Medicaid personal care programs target for fraud, say investigators

Keith Foreman, like a growing number of disabled Americans on Medicaid, qualified for a personal caregiver to help him with daily activities such as dressing, shaving and preparing meals. Foreman, 57, who has a spinal injury, hired his girlfriend, Sheila McDonald. In 2011, McDonald received almost $5,000 from Medicaid for six months of care she provided to Foreman. These personal-care services, which are available in all 50 states, are designed to help the sick, elderly and disabled remain in their homes and out of expensive nursing facilities. But Foreman was not living at home. During the days marked on McDonald’s timesheets, he was housed in the Massac County jail in Metropolis, Ill., serving time for using a stolen debit card at a local liquor store. Foreman and McDonald pleaded guilty to making false statements. Lax requirements for both caregivers and patients, along with poor state and federal oversight, have made the rapidly growing Medicaid personal-care programs an increasingly lucrative target for fraud, according to a federal report scheduled for release Thursday. The report, by the Office of the Inspector General of the Health and Human Services Department, brings together six years of OIG investigations and 23 reports. It describes programs hindered by poor claims documentation, insufficient monitoring of claims data for fraud and waste, and a crazy-quilt of requirements for care workers in different states. In particular, it faults the federal Centers for Medicare & Medicaid Services for inadequate oversight of the programs, whose costs are shared by states and the federal government, as is the norm for Medicaid. “Historically, CMS has left a lot of the responsibility for overseeing waste, fraud and abuse to the states,” said Christi Grimm, special assistant to the principal deputy inspector general. “As a result, we have 301 different sets of requirements for caregivers across the states.” Although some states mandate criminal background checks and licensing for home health workers, others lack even the most basic requirements, including age minimums, leading to cases in which juveniles escape prosecution for fraud and abuse, she said. “We are asking CMS to step up to the plate,” Grimm said. The report urges the CMS to improve oversight and monitoring of state plans, including standardizing rules for personal-care workers to set minimum age and education levels, and requiring criminal background checks. In a written response, the CMS — part of the Health and Human Services Department — explicitly concurred with only one of the OIG’s recommendations: that it should provide states with claims data to help root out cases in which recipients are simultaneously receiving institutional care and home health services. As for the recommendation on establishing federal guidelines for personal-care workers, the CMS noted that there is a shortage of attendants. CMS spokesman Brian Cook said the agency is “working to protect personal care from fraud and abuse by promoting stronger training programs for workers who provide personal care, working with states on background check programs for these workers, and developing new data methods to analyze claims for potential fraud and abuse.” According to investigators, most fraud schemes in personal-care services involve billing for care that was not provided or was not allowed. Self-directed programs, which allow recipients to hire and manage their helpers, may be particularly vulnerable, but some prosecutions have involved home-health-care agencies. In January, for example, the owner of a home-health-care company outside Minneapolis was sentenced to two years in prison for cheating Medicaid out of more than $650,000 in charges for personal-care services. In March, the owner of Families First Home Health Care in Sparta, N.C., pleaded guilty to fraud and money laundering stemming from a scheme in which she billed Medicaid for personal-care services she did not perform and split the proceeds with plan members. “Fraud goes where the money is,” said Barbara Zelner, executive director of the National Association of Medicaid Fraud Control Units, which represents state agencies that investigate Medicaid fraud. Personal-care programs have grown quickly since a 1999 Supreme Court decision held that unjustified segregation of the disabled is a civil rights violation. The ruling led to increased spending for home health services; in 2011, Medicaid paid more than $12 billion for personal-care services, up 35 percent since 2005, according to the inspector general. Investigators say fraud has kept pace. In 2010, state Medicaid fraud units investigated more than 1,000 cases involving personal care, more than any other type of Medicaid service. Not everyone agrees with the inspector general’s views on personal-care services. In 2011, an OIG review of Medicaid claims for personal-care services in New Jersey found that 40 percent should have been denied. But Sherl Brand, president of the Home Care Association of New Jersey, which advocates for home health care providers, says the agency often draws broad conclusions based on a limited number of claims. “It is almost a bit ridiculous because of the extrapolation they do,” Brand said. New Jersey home health workers face criminal background checks, along with certification and licensure requirements, Brand said. Personal-care-services programs save money, she said, and help disabled people live better lives. When New Jersey was considering budget cuts, Brand said, the association determined that the average cost for personal-care services was $242 per week, only slightly higher than the cost of a single day in a nursing home. But as funding for the programs increases, fraud follows. Kirk Ogrosky, a former top federal health-care fraud prosecutor who is now a partner at the Washington law firm Arnold & Porter, said home health has long been a hotbed of fraud, both in Medicaid and Medicare. The scams, he said, are not hard to uncover. Ogrosky recalled that after an extensive analysis of Medicare claims, he sent agents out to interview certain recipients. When the agents knocked on doors, they often learned that the person they were looking for was at work, Ogrosky recalled. “That’s utterly preposterous,” he said, “since home health requires that you are homebound.” In other cases, Ogrosky said, agents found that home-health-care agencies were filing claims for beneficiaries who did not live at the homes indicated on the claims. “One of my favorite stories is about a homeless guy we found,” he said. “He didn’t even have a home to be homebound to.”

Justice Department charges dozens in massive Indian call center scheme

The callers in India, claiming to be officials with the Internal Revenue Service or immigration services, would present those who answered the phone with an ultimatum. Pay us, or we’ll fine you, deport you or arrest you. Their network was expansive, and their work lucrative. Justice Department officials announced charges against 61 people and entities Thursday and said the call center scheme had scammed at least 15,000 victims out of more than $250 million. Phone scams are not new, but the breadth and sophistication of this one is notable. Justice Department officials said the defendants — 24 of them based in the United States — ran at least five call center groups overseas. Leslie Caldwell, the assistant attorney general in charge of the Justice Department’s Criminal Division, said she hoped the efforts of U.S. and Indian authorities would put a dent in the robust industry of phone scammers. “We have seen a drop-off in the success rate of these scams,” Caldwell said. U.S. authorities said they arrested 20 people in this country and carried out nine search warrants Thursday. A few others involved were already in custody. Earlier this month, in a separate case, police in Mumbai raided a call center and detained 770 employees for questioning. The Justice Department said that it was focused on a network of call centers in Ahmedabad and that some of the centers’ owners have been charged. A grand jury in federal court in the Southern District of Texas returned an indictment in the case on Oct. 19. Officials announced the unsealing of it on Thursday. The charges against those involved include conspiracy to commit identity theft, impersonation of an officer of the United States, wire fraud and money laundering. Bruce Foucart, assistant director of Immigration and Customs Enforcement’s homeland security investigations, said the scammers conducted online research on potential targets using Facebook and other online sources and bilked “savvy, successful and law-abiding people.” He said they went to “frightening lengths” to ensure the success of their scheme. In one instance, Foucart said, scammers convinced a Southern California woman with cancer that police would show up at her workplace for purported unpaid tax bills stemming from her medical treatment. She paid the scammers $7,000, Foucart said. In another instance, he said, when a man did not respond to phone demands for four years of purported back taxes, the scammers called 911 posing as the man and told the dispatcher he was armed and wanted to kill police. Armed officers showed up at the man’s house, where his daughter was home alone, Foucart said. “They convey authority and a sense of urgency that leaves their victims terrified,” he said. Those involved had a network of U.S.-based co-conspirators who would liquidate and launder the ill-gotten gains by buying prepaid debit cards, which they often registered using the personal information of identity-theft victims. They also would send wire transfers using fake names and use money transferring methods known as “hawalas,” in which money is effectively moved internationally outside the U.S. banking system. Caldwell said the scammers were able to display their numbers on caller ID systems as being from the U.S. government, though she said no government agency would call demanding money as they did. “If you get one of these calls,” she said, “it is not the U.S. government calling you.” Authorities said callers also sometimes would defraud victims by offering small, short-term loans or telling them they were eligible for grants, then requesting a processing fee or a good-faith deposit to demonstrate the victims’ ability to pay it back. The callers would pocket that money and never provide the grant or loan, authorities said. Caldwell said that authorities would seek to recover the money that was stolen, but that doing so might be difficult, and that it is possible that victims would not be repaid.

The top economics stories of 2012

No economic image has captured the American attention this year as much as the picture of driving over a fiscal cliff into an economic suicide, a la Thelma and Louise. Even if President Obama and House Speaker John Boehner end up swerving at the last minute, the fiscal cliff still wins as this year’s top economic story. Next on the list are four stories dealing in big numbers, specifically the 47 percent and the 1 percent, the $650 billion European bailout fund, Facebook’s botched $100 billion stock offering, banks paying $5 billion in fines for bad behavior, and China’s $8 billion interest in American businesses.  Here’s the list: 1\. Fiscal cliff throws the economy a $500 billion punch — Politicians may yet save the economy from the $500 billion in tax increases and spending cuts that make up the fiscal cliff, although the failure of Speaker John A. Boehner’s Plan B doesn’t give much hope of that outcome. To some extent, the disagreement arises over who’s well off enough to pay higher taxes that will arrive with the expiration of the Bush-era tax cuts at the end of the year. Is it those who make more than $400,000 as Obama believes, or is it those who make more than a million a year as Boehner (R-Ohio) insists? The classic Washington strategy of throwing out a policy and seeing what sticks is now running the fiscal show. These ideas include changing the way that Social Security benefits are adjusted for inflation, taking away the federal tax exemption for municipal bond interest, cutting reimbursements for 1 million doctors providing Medicare services, scaling back the charitable deduction, limiting the value of deductions that any individual taxpayer may claim, and so on. Meanwhile, forecasts of calamity if the economy topples over the fiscal cliff are abundant. Low-income families might lose $1,000 in tax breaks, and millions of not-very-high-income individuals might have to pay a tax that was originally designed to hit only high-income individuals. Scheduled cuts to Medicare raises exceptional ire, with groups such as RobinHoodTax.org rallying around the cry “Don’t Push Senior Citizens Off the Fiscal Cliff. Tax Wall Street.” Even the Pentagon is afraid that losing the roughly $50 billion in spending next year through the sequester would have “devastating effects on the Department of Defense,” and leave the military a “less-capable, less-modern, less-ready force and [risk] creating a hollow military,” as Pentagon Comptroller Robert Hale testified this fall before the House Armed Services Committee. If the combined tax increases and spending cuts take place, we’ll ring in the New Year with a recession. Ouch. 2\. The 47 percent — When Presidential candidate Mitt Romney commented that 47 percent of Americans don’t care about his tax policy because they don’t pay taxes, he was reflecting the truth in one sense. Every year, about half of Americans don’t owe federal income tax for lots of good reasons — they don’t make enough money, they’re retired and receiving Social Security benefits, or their deductions, say for medical expenses, charitable contributions, or losses, drive their tax bill to zero or below. Unfortunately for Romney, though his comments may have reflected the facts, they didn’t reflect voter sentiment. He eventually lost the election to Obama when he received just 47 percent of the popular vote. Romney was already in trouble for being part of the 1 percent — the share of Americans who are in the top 1 percent of the income distribution, made famous through last year’s Occupy Wall Street movement. Romney made his fortune at Bain Capital, a private equity spinoff from Bain and Co. that he led until retiring in 1999 to run the Salt Lake City Olympics. Bain Capital makes money by buying up, restructuring, and then selling off companies that are in distress. Staples, Inc., the office supply store, is one of Bain’s success stories; American Pad & Paper is not. Romney didn’t get into trouble so much for his work at Bain — his problems arose because he doesn’t pay a very high tax rate. As his tax return showed, he paid an average 14 percent tax rate in 2010 and 2011, a figure that drives his tax rate well below the rate of the typical secretary (Billionaire investor Warren Buffett believes that his tax rate shouldn’t be lower than his secretary’s tax rate. Buffet says his tax rate is 17.4 percent. We don’t know his secretary’s tax rate.). 3\. European central bankers struggle to preserve the euro, while Bernanke saves the U.S. economy — Greece slogged through a fourth year of recession and faces an economy that will be 20 percent smaller next year than it was five years ago. In March, a group of Greece’s private creditors agreed to accept a 75 percent loss on their Greek debt, allowing Greece to reduce its debt load by $132 billion, but leading to a technical default. Greece elected Antonis Samaras prime minister in June, who soon had to deal with violent strikes over the austerity packages imposed as a condition of receiving a bailout. Unemployment rose to 24.8 percent. By September, companies began to plan for the possibility that Greece would leave the euro, although European leaders insisted that wouldn’t happen. Conditions improved enough in December when Greece received another $69 billion in bailout funds so that Standard & Poor’s raised Greece’s credit rating by six notches, bringing Greece out of default though leaving the country’s debt with a junk rating. To provide long-term relief, the Europeans provided its new European Stability Mechanism with what’s being called a $650 billion bazooka. In the United States, Fed Chairman Ben Bernanke vowed in December that the Federal Reserve would follow a low-interest rate policy indefinitely. With the target federal funds rate near zero, the Fed will continue its “quantitative easing” and purchase $85 billion in Treasury bonds and mortgage-backed securities each month for the near future. In a change from past policy, Bernanke announced that the Fed will look to the unemployment rate for policy guidance and will keep rates low until the unemployment rate falls below 6.5 percent as long as inflation is no higher than 2.5 percent. The Fed doesn’t expect to implement this policy soon — it projects that the unemployment rate, which fell to 7.7 percent in November, will stay above 6 percent until at least 2015. 4\. Facebook’s disastrous IPO and banks behaving badly — The joy investors felt over finally being able to buy shares of a company that they really like — Facebook — drove the company’s valuation above $100 billion that day. That was soon followed by disappointment as the share price fell from $38 to below $30 just six trading days later and to about $27 today. Accusations that Facebook’s investment bankers, Morgan Stanley, gave privileged investors gloomy forecasts that they didn’t give others didn’t help soothe those initial investors’ feelings. As for the information to privileged investors, on Dec. 17, Massachusetts authorities fined Morgan Stanley $5 million for violating securities laws when its bankers told its analysts that they didn’t think Facebook’s revenue would be as strong as forecast. Bankers aren’t supposed to do that. Facebook has not been accused of any wrongdoing. On related financial notes, more than four years after the financial crisis erupted, banks continue to behave badly. UBS, Barclays, HSBC, and Standard Chartered together paid nearly $5 billion in fines this year connected to improper actions. UBS, Switzerland’s largest bank, paid $1.5 billion in fines after admitting that it committed fraud when it provided false information for purposes of calculating one of the world’s most important benchmark lending rates, the London Interbank Offered Rate, or Libor. Six months earlier, British bank Barclays Plc. had agreed to pay $453 million in fines for manipulating this interest rates. After a Senate investigation led by Carl Levin (D-MI) found that HSBC had acted as a conduit for “drug kingpins and rogue nations,” that British bank agreed to pay $1.9 billion to settle charges of money laundering involving Iran. British-based Standard Chartered bank agreed to pay $300 million in fines for money laundering through some 60,000 transactions with Iranian clients worth $250 billion over the past decade. In the U.S., JPMorgan Chase lost $5.8 billion from trading losses by Bruno Iksil, familiarly known as the London Whale. 5\. As China’s economy sputters, Chinese businesses look to America — In 2011, China’s $7.318 trillion economy became the second largest behind the United States, although at $4,940 per person, China ranks just 114th in the world per capita, according to the World Bank. In November, China made a once-a-decade leadership change when Xi Jinping, became president and general secretary of the Communist Party and Li Keqiang became premier. China’s new leaders will preside over an economy forecast to grow 7 percent in 2013, its slowest growth rate in 23 years. Slow domestic growth has stimulated Chinese companies to look to the United States for investment projects. Rhodium Group estimates Chinese firms will invest a record $8 billion this year in American businesses, ranging from clean energy to fossil fuels to entertainment complexes. In December, a Chinese firm bought the bankrupt battery-maker A123 Systems for about $250 million, while a group of Chinese firms feels confident enough about the AIG brand that it agreed to purchase AIG’s aviation-leasing business for just over $4 billion. Given the sensitivity of Chinese investment in the U.S., these are not done deals. The U.S. committee that’s responsible for evaluating the national security implications when foreign entities wish to purchase a U.S. company has yet to rule on the A123 and AIG purchases, while some deals may never go through. In September, Obama blocked a Chinese-owned company from building wind farms in Oregon on the basis of national security. _Joann Weiner teaches economics at The George Washington University. She has previously written for Bloomberg, Politics Daily, Tax Analysts and worked as an economist at the Treasury Department. Follow her on Twitter:_ _@DCEcon_ _._

Former staffer with U.S. contractor pleads guilty in State Department scam

A former employee of the major contracting firm DynCorp International admitted Monday that while working in Iraq, he helped cheat the State Department out of millions of dollars. Jose Rivera, 57, of Potomac, Md., pleaded guilty in Alexandria federal court to conspiracy to defraud the United States, acknowledging that he helped convince his bosses to rent a camp at Baghdad International Airport for a grossly inflated price. He agreed to cooperate against the other defendants in the scheme. The State Department ultimately footed the bill for the site as part of a training program for Iraqi police, paying $5,320,000 in rent for the property from September 2011 through April 2014. Rivera said in court that Emil Popescu, a Romanian contractor in the process of being extradited to the United States, paid him in cash as part of the scheme. Rivera said he only counted the first payment of $15,000 but accepted a government estimate of having received a total of $250,000. “I have no idea how much money I received,” he said. “I never counted anything.” Rivera testified that he carried some of the money with him when he flew home. At other times, he hid the cash inside speakers he bought on base and mailed home to his family. He used some of the money to buy a $35,000 motorcycle. Wesley Struble, 49, pleaded guilty in the scam in July, to conspiracy to violate the Anti-Kickback Act, and was sentenced to four years in prison. He was also ordered to pay approximately $3.4 million in restitution. Struble’s mother and sister pleaded guilty to lying in front of a grand jury to help cover up his crime. Popescu, Rivera and Struble shared the profits with Iraqi co-conspirators, according to prosecutors. Rivera will be sentenced Oct. 6.

Lawsuits shine light on kickbacks, sham agreements in real estate services

Do you remember signing page after page of legal documents at the settlement when you bought your house? All those fees you had to approve? If you’re like me, you had a nagging feeling that somehow, in some way, you were paying more than you should have been. We’re entirely right to worry. A wave of lawsuits and government investigations is shining a light on suspicious dealings among some of the folks who sell us houses, mortgages, title insurance and other real estate services. Regulators and private lawyers have uncovered kickbacks and sham agreements that drove up fees paid by customers and discouraged free competition. Many of the unsavory practices now being exposed took hold during the real estate boom before the 2008 financial crisis. Today, as the home-buying market heats up again, consumers need to be alert to the dangers. In a new case in Maryland, a civil suit claims that a prominent Howard County real estate agent received hundreds of thousands of dollars of illicit payments over a period of 13 years to send settlement business to a local title firm. The class-action suit alleges that the undisclosed kickbacks violated a federal law designed to protect home buyers against inflated fees. It claims at least 3,000 customers were harmed and asks $11.2 million in damages. The agent, Creig Northrop of Clarksville, denies wrongdoing and will vigorously fight the complaint, his lawyer said. Northrop is affiliated with the large Long & Foster brokerage, and boasts on his Web site that his group has been listed as the No. 1 real estate team in both Maryland and the country. In another recent case, the U.S. Consumer Financial Protection Bureau announced April 4 that four major national mortgage insurers agreed to pay $15.4 million in penalties to settle a complaint that they had made improper payments to mortgage lenders in exchange for business. “These types of kickbacks were a common practice in the years leading up to the financial crisis,” the bureau said. In a suit in Anne Arundel County last year, a jury awarded $97,000 in damages after finding that a mortgage broker and title company had set up a sham partnership to steer business to the latter. (The case is on appeal.) That case was one of more than a dozen brought by Frederick lawyer Phillip Robinson. He predicted more are on the way. “The fallout of the heyday of the 2000s is this kind of stuff is now being uncovered. These kinds of situations and relationships infected many transactions. I think we’ll be hearing more about this for the next few years,” Robinson said. The suit against Howard County agent Northrop was filed in federal court last month. Some intriguing details are already public, because the complaint is based partly on depositions and documents in an earlier claim against him in state court. Northrop received $6,000 to $12,000 a month from Lakeview Title under a 2008 marketing agreement between the two, according to court papers in the earlier case. The agreement provided that Northrop would “designate Lakeview as its exclusive preferred settlement and title company,” and would not “designate or endorse any entity” other than Lakeview for such business. The new lawsuit alleges that the marketing deal was a clear violation of a U.S. law, known as RESPA, which prohibits a firm from receiving compensation in exchange for referrals for real estate settlement services. Before 2008, the lawsuit claims, Lakeview also made illicit payments to Northrop in exchange for referrals. It alleges that Lakeview did so via a sham employment agreement with Northrop’s wife, Carla Northrop. Lakeview didn’t get all of Northrop’s business, but it got a lot. From 2005 to 2009, Lakeview handled between 49 percent and 61 percent of settlements when Northrop was representing the home buyer, according to Northrop’s lawyer. (Much of the earlier lawsuit, in state court, was defeated on technical grounds. A judge ruled that the complaint didn’t qualify as a class action and that the statute of limitations had expired. The plaintiffs plan to appeal.) Lawyers for the Northrops, Long & Foster and Lakeview said that both Carla Northrop’s job and the marketing agreement were legitimate. They said all the payments were for permissible marketing services and not for referrals, as the lawsuit claims. In any case, Northrop’s customers were not necessarily informed about the ties with Lakeview. The defendants’ lawyers said it “would not be typical or customary to disclose those relationships to people buying the houses.” In general, lack of disclosure is a problem, according to industry specialists. Before signing all those documents, a buyer should know about any side agreement between the realtor and settlement company, or bank and mortgage broker. “Get independent advice from people who have no financial stake in the transaction,” counsels Robinson. “The whole notion of one-stop shopping, that’s ridiculous. There is no upside for any homeowner to do one-stop shopping for the most important investment of their life.”

Feds arrest the alleged founder of Bitcoin’s largest drug market

Federal prosecutors have indicted a man named Ross William Ulbricht in San Francisco. They say he is the founder of Silk Road, a controversial website that allows users to buy and sell narcotics and other illicit goods. Founded in 2011, Silk Road website used Bitcoin, a digital currency that helped mask the identity of Silk Road's merchants and customers. The government shuttered the site and seized approximately 26,000 Bitcoins worth approximately $3.6 million. The government says it was the largest ever Bitcoin seizure in history. "During its two and a half years in operation, Silk Road has been used by several thousand drug dealers and other unlawful vendors to distribute hundreds of kilograms of illegal drugs and other illicit goods and services to well over a hundred thousand buyers," the government alleges in its indictment. The government says that 600,000 Bitcoins changed hands on the site, which at current exchange rates translates to $1.2 billion. In addition to narcotics, Silk Road also had listings for fake drivers' licenses, counterfeit currency, hacking services and much more, the government alleges. According to the government's complaint, the defendant is 29 years old. He earned a bachelor's degree in physics from the University of Texas in 2006, and later attended the Pennsylvania School of Materials Science and Engineering. The government says it identified Ulbricht after a routine border search of a package that contained nine counterfeit IDs. The package was shipped from Canada to an address in San Francisco. When the government visited the San Francisco address, they found Ulbricht there. The government then identified the primary Silk Road server and obtained an image of its hard drive in July, providing the federal government with a wealth of information about the Silk Road's operations. We'll have much more on the Silk Road shutdown in the coming hours.