Four Additional Members of Los Angeles-Based Fraud Ring Indicted for Exploiting COVID-Relief Programs

A federal grand jury in Los Angeles returned a superseding indictment, which was unsealed Thursday, charging four additional individuals for their alleged participation in a scheme to submit over 150 fraudulent loan applications seeking over $21.9 million in COVID-19 relief funds guaranteed by the Small Business Administration (SBA) under the Coronavirus Aid, Relief, and Economic Security (CARES) Act.

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    In Crime News
    The Justice Department, in an announcement by Assistant Attorney General for the Civil Rights Division Eric S. Dreiband, Principal Deputy Assistant Attorney General of the Office of Justice Programs (OJP) Katharine T. Sullivan, and U.S. Attorney for the District of Minnesota Erica H. MacDonald, unveiled a new National Response Center Initiative and offered the assistance to the Minneapolis Police Department (MPD) to support law enforcement, and review, enhance and reform policies and practices to prevent the use of excessive force. The BJA Law Enforcement Training and Technical Assistance Response Center will be a national resource for all state, local, and tribal law enforcement agencies.
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    In U.S GAO News
    In response to the Department of Labor's Home Care Rule—which extended Fair Labor Standards Act (FLSA) minimum wage and overtime protections to more home care workers—some states made changes in their Medicaid programs, according to studies and GAO interviews with stakeholders and selected state officials. Many stakeholders said the rule led some states to limit home care workers' hours in their Medicaid programs to avoid overtime costs. For example, in Oregon, newly hired home care workers provided through Medicaid were generally limited to 40 hours per week, according to state documentation. Some states also budgeted additional funds for overtime pay. In addition, according to a few stakeholder groups, some states changed service delivery in their Medicaid programs, for example, by discontinuing services such as live-in care. In contrast, several stakeholders said some states did not make any major changes to their Medicaid programs' home care services. Provider agencies, workers, and consumers experienced changes after the Home Care Rule took effect. Specifically, some provider agencies restricted workers' hours to limit overtime costs, though this can result in the need to hire more workers, leading to increased costs of recruiting, training, and scheduling, according to several stakeholders. GAO's analysis of national survey data found that home care workers, when compared to occupations with similar education and training requirements, were more likely to work full-time but did not earn significantly higher earnings following the Home Care Rule (see figure). Many stakeholders GAO spoke with described ongoing challenges consumers face in obtaining home care services, such as difficulty finding workers to hire. Estimated Median Weekly Earnings of Employed Workers, 2010 through 2019 Note: The margins of error at the 95 percent confidence level are within plus or minus 7.2 percent of the estimate itself. Employment in home care is projected to grow nearly 40 percent over the next decade to meet demand from an increasing population of older adults and people with disabilities. Home care workers help those who need assistance with activities of daily living such as dressing, eating, or bathing. State Medicaid programs may allow home care for eligible individuals as an alternative to institutional care. The Department of Labor's (DOL) Home Care Rule, which went into effect in 2015, extended FLSA protections to more home care workers. GAO was asked to review the implementation and effects of the Home Care Rule. This report examines what is known about (1) changes states made to their Medicaid programs in response to the Home Care Rule; and (2) the Home Care Rule's effect on home care provider agencies, workers, and consumers. To address these objectives, GAO analyzed 2010 through 2019 national survey data on workers' hours and wages; interviewed stakeholders from 15 organizations that represent the different groups affected, DOL officials, and home care program officials from three states selected based on variation in their Medicaid programs and minimum wage levels; and reviewed studies on state strategies to implement the Home Care Rule. For more information, contact Melissa Emrey-Arras at (617) 788-0534 or emreyarrasm@gao.gov.
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  • Organ Transplants: Changes in Allocation Policies for Donated Livers and Lungs
    In U.S GAO News
    The Organ Procurement and Transplantation Network (OPTN) develops allocation policies in the United States to determine which transplant candidates receive offers for organs, such as livers or lungs, that are donated from deceased donors. In July 2018, the Department of Health and Human Services (HHS), which oversees OPTN, directed it to change the liver allocation policy to be more consistent with federal regulations. The liver allocation policy changed in February 2020 from a system that, in general, offered donated livers first to the sickest candidates within the fixed boundaries of a donation service area or region to a system based on a candidate's level of illness and distance from the donor hospital. The current liver allocation policy offers livers first to the sickest candidates within 500 nautical miles of the donor hospital using a series of distance-based concentric circles, called acuity circles. The processes used to develop the liver and lung allocation policies had various similarities and differences. For example, while the current liver allocation policy, the 2017 liver allocation policy, and the current lung allocation policy each had public comment periods, the length of these comment periods varied—25 days for the current liver allocation policy; two separate 62-day and 64-day periods for the 2017 liver allocation policy; and 61 days (retroactive) for the current lung allocation policy. In addition, the current lung allocation policy resulted in part from a federal district court order directing HHS to initiate emergency review of the policy. However, the 2017 liver allocation policy—that was approved but never implemented—resulted from a 2012 OPTN Board directive to reduce geographic disparities in organ allocation. HHS oversight of OPTN's processes were similar for all three allocation policies and included reviewing the proposed changes to the policies to ensure compliance with federal regulations, according to HHS officials. Timeline of Selected Events Related to Three Organ Allocation Policies Organ transplantation is the leading form of treatment for patients with severe organ failure. OPTN, a nonprofit entity that was established in 1984 under the National Organ Transplant Act, manages the nation's organ allocation system. In 2019, 32,322 organs were transplanted from deceased donors in the United States. Nevertheless, as of July 2020, close to 110,000 individuals remained on waiting lists for donor organs. Previously, donated livers and lungs were generally offered first to the sickest candidates in donation service areas. However, livers and lungs are now generally offered first to the sickest candidates based on distance. GAO was asked to review the changes to the liver and lung allocation policies. This report describes (1) changes to the liver allocation policy, and (2) similarities and differences in the processes OPTN used to change the liver and lung allocation policies, and federal oversight of these processes, among other things. GAO reviewed documents, including those related to the current liver and lung allocation policies, and the 2017 liver allocation policy; interviewed HHS officials and OPTN members; reviewed the National Organ Transplant Act and its implementing regulations; and conducted a literature review of studies published from January 2017 through April 2020 in peer-reviewed and other publications. HHS and the United Network for Organ Sharing (the contractor serving as OPTN) provided technical comments on a draft of this report, which GAO incorporated as appropriate. For more information, contact James Cosgrove at (202) 512-7114 or cosgrovej@gao.gov.
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    In Crime News
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    In Crime News
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  • Puerto Rico: Perspectives on the Potential to Expand Air Cargo Operations
    In U.S GAO News
    Cargo was flown by air between more than 97 countries within the selected regions of Africa, Europe, Latin America, and the U.S. that may affect air cargo expansion in Puerto Rico. However, according to Department of Transportation (DOT) and European Union data, most international air cargo transportation was concentrated at a handful of countries and at airports in these regions. For example, four countries in Europe accounted for 72 percent of the U.S.-European Union air cargo transported, by weight. Likewise for airports, Miami International Airport accounted for 70 percent of air cargo transported between the U.S. and Latin America. Worldwide, cargo-only carriers transported on average 13.8 billion pounds of air cargo to and from the U.S. from 2016 through 2018. Of that cargo, two of the selected regions—Latin America and Europe—when combined accounted for 46 percent. Air Cargo Transported by Cargo-Only Airlines between the U.S. and Global Regions, Average Weight in Millions of Pounds, 2016 through 2018 Based on interviews with industry stakeholders and studies reviewed. GAO identified four factors that are generally associated with an airport's ability to attract air cargo traffic: (1) an airport's geographical location; (2) its proximity to transportation networks; (3) its supporting airport infrastructure and resources; and (4) the governmental and regulatory environments. For example, an airport located near businesses that generate large volumes of both inbound and outbound cargo that could be transported by air may be an important geographic factor for air carriers. Puerto Rican government and industry stakeholders GAO spoke with said that increased air cargo would benefit its airports and lead to positive effects on the Puerto Rican economy. For example, officials noted that expansion of air cargo operations could increase the use of underutilized airports and create opportunities for existing industry—such as the pharmaceutical, medical device, and aerospace industries—and help develop new ones. Puerto Rican and industry stakeholders had varying perspectives on the potential for Puerto Rico's expanding its air cargo operations. For example, some stakeholders said Puerto Rico's geographic location may allow it to serve as a refueling and cargo distribution point, particularly for flights between Europe and Latin America, while others said the island may be too close to some Latin American destinations to serve that purpose. Whether and to what extent Puerto Rico can increase air cargo operations depends on how air carriers weigh the various factors discussed above. Puerto Rico's economy has been in decline for much of the last 15 years and was devastated by hurricanes in 2017. Puerto Rico has sought to increase air cargo and passenger traffic at its international airports as a means to bolster and diversify its economy. Specifically, Puerto Rico seeks to serve as a transshipment point for transferring cargo between air carriers flying from Europe to Latin America. Air cargo, whether carried in the holds of passenger aircraft or by cargo-only aircraft, is an important component of global trade. The FAA Reauthorization Act of 2018 includes a provision for GAO to study the international air cargo transportation services among the United States and the African, Latin American, and European regions and the potential expansion of air cargo operations in Puerto Rico. This report addresses (1) what is known about air cargo operations between these world regions; (2) factors affecting the development of air cargo markets; and (3) Puerto Rican officials' and selected industry stakeholders' views on the economic effect and potential of expanding air cargo operations in Puerto Rico. GAO analyzed DOT and European air cargo data for flights between the U.S. and the selected regions for 2016 through 2018 (the latest available data). GAO also interviewed officials from DOT, and stakeholders from Puerto Rico and the air-cargo industry, selected based on prior GAO work and stakeholder mission. For more information, contact Heather Krause at (202) 512-2834 or krauseh@gao.gov.
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    Today, the Justice Department announced it has charged more than 14,200 defendants with firearms-related crimes during Fiscal Year (FY) 2020, despite the challenges of COVID-19 and its impact on the criminal justice process.
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    Two militant fighters for the Islamic State of Iraq and al-Sham (ISIS), a foreign terrorist organization, are expected to arrive in the United States today in FBI custody on charges related to their participation in a brutal hostage-taking scheme that resulted in the deaths of four American citizens, as well as the deaths of British and Japanese nationals, in Syria.
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  • Doctor, Clinic Owner and Staff Charged with Falsifying Clinical Trial Data
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    In an indictment unsealed today, a federal grand jury in Miami charged a Florida medical doctor and three others for their roles in an alleged scheme to falsify clinical trial data.
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  • K-12 Education: School Districts Need Better Information to Help Improve Access for People with Disabilities
    In U.S GAO News
    Two-thirds of U.S. public school districts have schools with physical barriers that may limit access for people with disabilities, according to GAO's survey of district officials. Barriers, such as a lack of accessible door hardware and steep ramps, can make it challenging for students, teachers, and others with disabilities to use public school facilities (see fig.). In 55 schools across six states, the most common areas with barriers GAO observed were restrooms, interior doorways, and classrooms. GAO also observed barriers related to safety and security. For example, for security, some schools had installed double-door vestibules with limited maneuvering space that could trap people who use wheelchairs. Examples of Doorway and Auditorium Barriers GAO Observed in Schools Note: Barriers presented in this figure potentially limit physical access for people with disabilities, but taken alone, would not necessarily establish whether a legal violation has occurred. An estimated 70 percent of districts had large-scale renovations, small-scale upgrades, or accessibility evaluations planned in the next 3 calendar years, but frequently cited funding constraints as a challenge to these efforts. Districts also identified the need to prioritize projects that keep buildings operational, such as roofing and heating projects. In addition, GAO's survey, observations during site visits, and interviews with national disability groups revealed a tension between making safety and security upgrades and improving physical accessibility. The Department of Justice (Justice) has not provided technical assistance on physical accessibility in schools, and GAO's surveys indicate such help is needed. Justice has authority to provide information on interpreting the Americans with Disabilities Act of 1990 (ADA), including for public schools, and it has provided technical assistance regarding other public facilities, such as stadiums. In addition, Justice, along with the Department of Education (Education) and other federal agencies, recently launched a new website on school safety, but it does not include specific information on how to improve accessibility of public school facilities or provide information on ADA requirements in the context of school safety upgrades. Without such information, federal agencies may miss opportunities to help ensure that people with disabilities have safe and secure access to public school facilities. National reports have raised concerns about the physical accessibility of public school facilities for people with disabilities. These facilities serve important roles as schools, voting locations, and emergency shelters, among other things. GAO was asked to examine the physical accessibility of public school facilities. This report examines the extent to which (1) school districts have school facilities with physical barriers that may limit access for people with disabilities, (2) districts plan to improve the accessibility of school facilities and the challenges they face, and (3) Justice and Education assist districts and states in improving school facilities' physical accessibility. GAO conducted a nationally representative survey of school districts; surveyed states and the District of Columbia; examined 55 schools across six states, selected for variation in size and other characteristics; reviewed relevant federal laws, regulations, and guidance; and interviewed federal, state, and school district officials, and national disability groups. GAO recommends that Justice work with Education to (1) provide information specific to accessibility of public school facilities and (2) provide information on federal accessibility requirements in the context of public school safety and security. Justice neither agreed nor disagreed with GAO's recommendations. For more information, contact Jacqueline M. Nowicki at (617) 788-0580 or nowickij@gao.gov.
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  • Sexual Harassment and Assault: Guidance Needed to Ensure Consistent Tracking, Response, and Training for DOD Civilians
    In U.S GAO News
    The Department of Defense (DOD) has taken steps to track reports of sexual harassment and sexual assault involving its federal civilian employees, but its visibility over both types of incidents is hindered by guidance and information-sharing challenges. While employees may not report all incidents for a variety of reasons, DOD also lacks visibility over those incidents that have been reported. For example, from fiscal years 2015 through 2019, DOD recorded 370 civilian employees as victims of sexual assault and 199 civilian employees as alleged offenders. However, these data do not include all incidents of sexual assault reported over this time period. Specifically, based on DOD guidance, examples of incidents that could be excluded from these data include those involving civilian employee victims (1) occurring in the continental United States, (2) employed by DOD components other than the military services, such as defense agencies, and (3) who are also military dependents. Without guidance that addresses these areas, DOD does not know the extent to which its civilian workforce has reported work-related sexual assault worldwide. Number of Department of Defense Federal Civilian Employees Recorded as Victims or Alleged Offenders in Reported Sexual Assault Incidents, Fiscal Years 2015-2019 While DOD has developed policies and procedures to respond to and resolve sexual harassment and sexual assault incidents involving federal civilian employees, gaps exist. For example, DOD issued guidance in June 2020 directing components to establish anti-harassment programs, but it lacks details regarding how such programs should be structured. Without clarifying guidance, components can establish programs that do not align with U.S. Equal Employment Opportunity Commission guidance for model anti-harassment programs. Additionally, GAO found that DOD civilian employees' ability to make restricted reports of sexual assault—confidential disclosures that do not initiate official investigations, but allow the victim to receive DOD-provided sexual assault support services—varies across components. According to DOD officials, they have not taken action to resolve this variation due to conflicts with federal statute, among other things. By reporting to and requesting any needed actions from Congress to resolve any conflicts with statute, the department can alleviate such inconsistencies and minimize legal risks for DOD components. With nearly 900,000 federal civilian employees around the world, DOD has responsibilities for preventing and responding to sexual harassment and assault within its workforce. In fiscal year 2018, DOD estimated that about 49,700 civilian employees experienced sexual harassment and about 2,500 civilian employees experienced work-related sexual assault in the prior year. House Report 116-120 included a provision for GAO to review DOD's prevention of and response to sexual harassment and assault involving DOD federal civilian employees. GAO's report examines, among other things, the extent to which DOD has (1) visibility over such reported incidents, and (2) developed and implemented policies and procedures to respond to and resolve these incidents. GAO reviewed policies and guidance; analyzed program data from fiscal years 2015 through 2019; interviewed officials at a nongeneralizable sample of five military installations; evaluated DOD training materials; and interviewed DOD, service, and civilian officials. GAO is making 19 recommendations, including that DOD issue guidance for comprehensive tracking of civilian work-related sexual assaults, enhance guidance on the structure of anti-harassment programs for civilians, and report to and request any needed actions from Congress on the ability of civilian employees to make restricted reports of sexual assault. As discussed in the report, DOD generally concurred with the recommendations. For more information, contact Brenda S. Farrell at (202) 512-3604 or farrellb@gao.gov.
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    In Crime News
    A Houston-area physician and anesthesiologist at two registered pain clinics, Texas Pain Solutions and Integra Medical Clinic, was sentenced today to seven years in prison for his role in fraudulently billing health care programs for at least $5 million dollars in medical tests and procedures, and for the role his fraud played in multiple patient deaths.
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  • Veterans Affairs: VA Needs to Address Persistent IT Modernization and Cybersecurity Challenges
    In U.S GAO News
    The Department of Veterans Affairs (VA) has faced challenges in its efforts to accomplish three critical information technology (IT) modernization initiatives: the department's health information system, known as the Veterans Health Information Systems and Technology Architecture (VistA); a system for the Family Caregiver Program, which is to support family caregivers of seriously injured post-9/11 veterans; and the Veterans Benefits Management System (VBMS) that collects and stores information and is used for processing disability benefit claims. Specifically, GAO has reported on the challenges in the department's three previous unsuccessful attempts to modernize VistA over the past 20 years. However, VA has recently deployed a new scheduling system as part of its fourth effort to modernize VistA and the next deployment of the system, including additional capabilities, is planned in October 2020. VA had taken steps to address GAO's recommendations from its 2014 report to implement a replacement system for the Family Caregiver Program. However, in September 2019, GAO reported that VA had yet to implement a new IT system that fully supports the Family Caregiver Program and that it had not yet fully committed to a date by which it will certify that the new IT system fully supports the program. In September 2015, GAO reported that VA had made progress in developing and implementing VBMS, but also noted that additional actions could improve efforts to develop and use the system. For example, VBMS was not able to fully support disability and pension claims, as well as appeals processing. GAO made five recommendations aimed at improving VA's efforts to effectively complete the development and implementation of VBMS; however, as of September 2020, VA implemented only one recommendation. VA's progress in implementing key provisions of the Federal Information Technology Acquisition Reform Act (commonly referred to as FITARA) has been uneven. Specifically, VA has made progress toward improving its licensing of software and achieving its goals for closing unneeded data centers. However, the department has made limited progress toward addressing requirements related to IT investment risk management and Chief Information Officer authority enhancement. Until the department implements the act's provisions, Congress' ability to effectively monitor VA's progress and hold it fully accountable for reducing duplication and achieving cost savings will be hindered. In addition, since fiscal year 2016, GAO has reported that VA faces challenges related to effectively implementing the federal approach to, and strategy for, securing information systems; effectively implementing information security controls and mitigating known security deficiencies; and establishing elements of its cybersecurity risk management program. GAO's work stressed the need for VA to address these challenges as well as manage IT supply chain risks. As VA continues to pursue modernization efforts, it is critical that the department take steps to adequately secure its systems. The use of IT is crucial to helping VA effectively serve the nation's veterans. The department annually spends billions of dollars on its information systems and assets—VA's budget for IT now exceeds $4 billion annually. However, over many years, VA has experienced challenges in managing its IT projects and programs, which could jeopardize its ability to effectively support key programs such as the Forever GI Bill. GAO has previously reported on these IT management challenges at VA. GAO was asked to testify on its prior IT work at VA. Specifically, this testimony summarizes results and recommendations from GAO's issued reports that examined VA's efforts in (1) modernizing VistA, a system for the Family Caregiver Program, and VBMS; (2) implementing FITARA; and (3) addressing cybersecurity issues. In developing this testimony, GAO reviewed its recently issued reports that addressed IT management issues at VA and GAO's biannual high-risk series. GAO also incorporated information on the department's actions in response to recommendations. GAO has made numerous recommendations in recent years aimed at improving VA's IT system modernization efforts, implementation of key FITARA provisions, and cybersecurity program. VA has generally agreed with the recommendations and has begun to address them. For more information, contact Carol C. Harris at (202) 512-4456 or harriscc@gao.gov.
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  • Navy Maintenance: Navy Report Did Not Fully Address Causes of Delays or Results-Oriented Elements
    In U.S GAO News
    The Navy's July 2020 report identified two key causes and several contributing factors regarding maintenance delays for aircraft carriers, surface ships, and submarines, but did not identify other causes. For public shipyards, the Navy's report identified the key cause of maintenance delays as insufficient capacity relative to growing maintenance requirements. For private shipyards, the Navy's report identified the key cause as the addition of work requirements after a contract is awarded. These causes and other identified factors generally align with factors that GAO has previously identified as originating during the maintenance process. However, the Navy's report did not consider causes and factors originating in the acquisition process or as a result of operational decisions, as shown below. GAO-Identified Factors Contributing to Maintenance Delays That the Navy Identified in Its July 2020 Report The report identified stakeholders needed to implement action plans, but did not fully incorporate other elements of results-oriented management, including achievable goals, metrics to measure progress, and resources and risks. Some examples from the report: Stakeholders: Identified Naval Sea Systems Command as the primary implementer of most initiatives related to maintenance at shipyards. Goals: Included a goal of reducing days of maintenance delay by 80 percent during fiscal year 2020.The Navy did not achieve this goal based on GAO's analysis of Navy data. Metrics: Included some metrics. The Navy is still identifying and developing other key metrics. Resources: Did not identify costs of the actions in the report. Risks: Identified as risks the coronavirus pandemic, unstable funding, and limited material availability. However, the report did not assess additional risks that GAO previously identified. The Navy generally has been unable to complete ship and submarine maintenance on time, resulting in reduced time for training and operations, and additional costs. The Navy's ability to successfully maintain its ships is affected by numerous factors throughout a ship's life cycle, such as decisions made during acquisition, which occurs years before a ship arrives at a shipyard for maintenance. Others manifest during operational use of the ship or during the maintenance process. The conference report accompanying a bill for the Fiscal Year 2020 Consolidated Appropriations Act directed the Secretary of the Navy to submit a report identifying the underlying causes of maintenance delays for aircraft carriers, surface ships, and submarines and to include elements of results-oriented management. The conference report also included a provision for GAO to review the Navy's report that was released in July 2020. This report evaluates the extent to which the Navy's report (1) identifies the underlying causes of maintenance delays and (2) incorporates elements of results-oriented management. GAO reviewed the Navy's report and interviewed Navy officials. Since 2015, GAO has made 39 unclassified recommendations related to Navy maintenance delays. The Navy or the Department of Defense concurred or partially concurred with 37 recommendations, and had implemented six of them as of September 2020. For more information, contact Diana Maurer at (202) 512-9627 or MaurerD@gao.gov.
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  • Justice Department Announces Closing of Investigation into 2014 Officer Involved Shooting in Cleveland, Ohio
    In Crime News
    The Justice Department announced today that the career prosecutors reviewing the independent federal investigation into the fatal shooting of Tamir Rice on Nov. 22, 2014, in Cleveland, Ohio, found insufficient evidence to support federal criminal charges against Cleveland Division of Police (CDP) Officers Timothy Loehmann and Frank Garmback.  Yesterday the department notified counsel for Mr. Rice’s family of the decision and today sent a letter to Mr. Rice’s family explaining the findings of the investigation and reasons for the decision.
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  • More than 700 Members Of Transnational Organized Crime Groups Arrested in Central America in U.S. Assisted Operation
    In Crime News
    Today, senior law enforcement officials from the United States, El Salvador, Guatemala and Honduras announced criminal charges in Central America against more than 700 members of transnational criminal organizations, primarily MS-13 and 18th Street gangs, which resulted from a one-week coordinated law enforcement action under Operation Regional Shield (ORS).
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  • Assistant Attorney General Beth A. Williams Delivers Capital Conversations Speech Highlighting Department of Justice Policy Accomplishments
    In Crime News
    Thank you, Dean, for inviting me.  I am honored to be here and to be part of the Capital Conversations series.
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  • 2020 New Zealand General Election
    In Crime Control and Security News
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  • North Carolina Return Preparer Pleads Guilty to Tax Fraud Scheme
    In Crime News
    A North Carolina return preparer pleaded guilty today to conspiring to defraud the United States.
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  • Military Housing: Actions Needed to Improve the Process for Setting Allowances for Servicemembers and Calculating Payments for Privatized Housing Projects
    In U.S GAO News
    The Department of Defense (DOD) has established a process to determine basic allowance for housing (BAH) rates, which help cover the cost of suitable housing in the private sector for servicemembers. However, DOD has not always collected rental data on the minimum number of rental units needed to estimate the total housing cost for certain locations and housing types. GAO analysis found that 44 percent (788 of 1,806) of locations and housing types had fewer than the minimum sample-size target. Until DOD develops ways to increase its sample size, it will risk providing housing cost compensation that does not accurately represent the cost of suitable housing for servicemembers. DOD followed congressional requirements for calculating BAH reductions and payments to privatized housing projects. However, while the 2019 congressionally mandated payments lessened the financial effects of BAH reductions, as intended, they did not do so commensurate with the amount of the BAH reduction. GAO found that privatized housing projects received payments that were either over or under the amount of revenue lost from reductions made to BAH, in some cases by $1 million or more. (see figure) Number of Privatized Housing Projects and Amounts That Congressionally Mandated Payments Were Above or Below the Basic Allowance for Housing (BAH) Reduction Estimate (in 2019) These distortions occurred because the legal requirements for calculating the BAH reduction and the congressionally mandated payments differ. Specifically, the law requires that the BAH reduction be a set dollar amount, regardless of location, while payments to privatized housing projects are required to differ by location. This required method of calculating the BAH reduction amounts is consistent with how prior reductions were calculated. According to DOD, BAH rates were reduced so that servicemembers share a portion of housing costs, and that reduction amount was the same for servicemembers with the same pay grade and dependency status, regardless of location. Until Congress takes steps to ensure congressionally mandated payment calculations are consistent with how BAH reductions are calculated, some privatized housing projects will continue to receive more or less than was intended. DOD spent about $20 billion in fiscal year 2019 on BAH—often one of the largest components of military pay. BAH is designed to cover a portion of servicemembers' housing rental and utility costs in the private sector. Starting in 2015, DOD reduced BAH rates so that servicemembers share a portion of housing costs. The majority of servicemembers rely on the civilian housing market, while others rely on government housing or privatized housing projects. These projects rely on BAH as a key revenue source. In 2018-2020, Congress required DOD to make payments to these projects to help offset the BAH reduction. Senate Report 116-48 included a provision for GAO to review DOD's BAH process. This report evaluates, among other things, the extent to which (1) DOD established a process to determine BAH and (2) DOD's congressionally mandated payments to projects lessened the effects of BAH reductions. To conduct this work, GAO reviewed relevant guidance and other documents, analyzed key data, and interviewed cognizant DOD officials. GAO is making a matter for congressional consideration to revise statutory language to ensure payments to privatized housing projects are consistent with BAH reductions. GAO is also making three recommendations, including that DOD review its sampling methodology to increase sample size. DOD concurred with two recommendations. DOD also partially concurred with one recommendation, which GAO continues to believe is valid, as discussed in the report. For more information, contact Elizabeth A. Field at (202) 512-2775 or fielde1@gao.gov.
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  • Justice Department Settles Race Discrimination Case Against a Florida City Securing $195,000 in Lost Wages and Damages
    In Crime News
    The Justice Department today announced that it has reached a settlement with the City of Venice, Florida, resolving its race discrimination lawsuit against the city. 
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  • The Justice Department Unveils Proposed Section 230 Legislation
    In Crime News
    Today, on behalf of the [Read More…]
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    In Space
    Stacking spacecraft [Read More…]
  • Pakistan Independence Day
    In Crime Control and Security News
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