October 26, 2021

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Tech Executive Pleads Guilty to Wire Fraud and Money Laundering in Connection with PPP Loans

9 min read
<div>A Washington man pleaded guilty today to wire fraud and money laundering in connection with his scheme to obtain over $5.5 million in Paycheck Protection Program (PPP) loans and laundering the proceeds.</div>
A Washington man pleaded guilty today to wire fraud and money laundering in connection with his scheme to obtain over $5.5 million in Paycheck Protection Program (PPP) loans and laundering the proceeds.

More from: March 15, 2021

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  • Broiler Chicken Producer Indicted for Price Fixing and Bid Rigging
    In Crime News
    A federal grand jury in Denver, Colorado, returned an indictment charging Norman W. Fries Inc., dba Claxton Poultry Farms (Claxton), headquartered in Claxton, Georgia, with participating in a nationwide conspiracy to fix prices and rig bids for broiler chicken products.
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  • Attorney General Merrick B. Garland’s Statement on Missing and Murdered Indigenous Persons Awareness Day
    In Crime News
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  • DOD Financial Management: Continued Efforts Needed to Correct Material Weaknesses Identified in Financial Statement Audits
    In U.S GAO News
    The Department of Defense (DOD) continues to face financial management issues and challenges that have prevented it from obtaining a clean audit opinion on the fair presentation of its financial statements. Specifically, financial statement auditors issued disclaimers of opinion on DOD's and the military services' fiscal year 2018 and 2019 financial statements. These disclaimers resulted from numerous material weaknesses based on thousands of notices of findings and recommendations (NFR) that the auditors issued. Of the 2,409 NFRs issued to DOD and its components in fiscal year 2018, DOD's auditors were able to close 623 (26 percent) in fiscal year 2019; the remaining 1,786 (74 percent) remained open. These results provide useful insights on DOD's remediation progress since beginning department-wide full audits in fiscal year 2018; it is important for DOD to equal or exceed this progress in the future. Financial statement audits have value beyond the audit opinion and can help management save resources and improve military readiness. DOD leadership identified a number of benefits that resulted from these financial statement audits. For example, the Navy identified a warehouse that was not in its property records that contained approximately $126 million in aircraft parts. The Navy was able to fill over $20 million in open orders for these parts. By using these parts, aircraft were repaired quicker and made available for use, which improved military readiness. To help guide and prioritize department-wide efforts, DOD identified eight audit remediation priority areas (four in 2019 and four in 2020), seven of which specifically related to material weaknesses that its auditor reported. The military services also developed methodologies to prioritize NFRs and determined that over half of their fiscal year 2018 NFRs are high priority and significant to their financial statement audits. DOD and its components have taken steps to develop corrective action plans (CAP) to address NFRs. However, most of the CAPs that GAO tested did not include at least one data element or evidence that a root-cause analysis was performed, as directed by Office of Management and Budget (OMB) and other related guidance, in part, because DOD guidance and monitoring efforts did not clearly identify the need for such documentation. As a result, DOD and its components may lack sufficient information and assurance that their remediation efforts will resolve the underlying causes associated with the NFRs and related material weaknesses. Based on these issues, DOD and its components are at increased risk that their actions may not effectively address identified deficiencies in a timely manner. DOD developed an NFR Database that contains useful information on deficiencies that financial auditors identified and actions to address them, which has improved its ability to monitor and report on audit remediation efforts using dashboard reports based on real-time data contained in the database. However, certain database information on which these reports are based may not be accurate, reliable, and complete. For example, although DOD reviews NFR Database information monthly, it does not follow up on instances of outdated information or other exceptions identified to ensure components resolve them timely. Without complete and reliable information on DOD's audit remediation efforts, internal and external stakeholders may not have quality information to effectively monitor and measure DOD's progress. DOD is responsible for about half of the federal government's discretionary spending, yet it remains the only major federal agency that has been unable to receive a clean audit opinion on its financial statements. After years of working toward financial statement audit readiness, DOD underwent full financial statement audits in fiscal years 2018 and 2019. This report, developed in connection with fulfilling GAO's mandate to audit the U.S. government's consolidated financial statements, examines the (1) actions taken by DOD and the military services to prioritize financial statement audit findings; (2) extent to which DOD and its components developed CAPs to address audit findings in accordance with OMB, DOD, and other guidance; and (3) extent to which DOD improved its ability to monitor and report on audit remediation efforts. GAO reviewed documentation and interviewed officials about DOD's and the military services' audit remediation prioritization, monitoring, and reporting. GAO selected a generalizable sample of 98 NFRs to determine whether CAPs to address them were developed according to established guidance. GAO is making five recommendations to DOD to improve the quality of CAPs to address audit findings and information in the NFR Database and related reports provided to internal and external stakeholders to monitor and assess audit remediation efforts. DOD concurred with three of GAO's recommendations, partially concurred with one recommendation, and disagreed with one recommendation. GAO continues to believe that all the recommendations are valid. For more information, contact Asif A. Khan at (202) 512-9869 or khana@gao.gov.
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  • Capitol Police: Applying Effective Practices to Address Recommendations Will Improve Oversight and Management
    In U.S GAO News
    What GAO Found The U.S. Capitol Police (Capitol Police) may benefit from applying practices to help implement recommendations from auditing entities, such as those from GAO and the Capitol Police Office of the Inspector General (OIG). These effective practices include the following: Provide management oversight over the prompt remediation of deficiencies and delegate authority. Federal internal control standards state that management should oversee the prompt remediation of deficiencies. This should be done by communicating the corrective actions to the appropriate personnel and delegating authority for completing these actions. Communicate regularly with auditing entities on the status of recommendations. Engagement between Capitol Police and auditing agency leaders could provide important leadership attention to help ensure actions are taken to implement recommendations. Work with Congress to address recommendations. Congress plays a key role in providing oversight and maintaining focus on recommendations from audit entities. For example, federal agencies, including the Capitol Police, are required to report on the implementation status of public recommendations. Further, agencies can also assess the need for legislation to address recommendations and report their findings to Congress. Follow key organizational transformation practices . As the Capitol Police takes steps to implement recommendations from auditing entities, the agency may benefit from following key organizational transformation practices, such as (1) setting implementation goals and a timeline, (2) dedicating an implementation team to manage the transformation process, and (3) involving employees to obtain their ideas and gain their ownership for the transformation. Coordination between the Capitol Police and its Board is critical to addressing its recommendations. The Capitol Police Board (the Board) is charged with oversight of the Capitol Police. Given the oversight role of the Board, the Capitol Police may need approval from the Board in order to take actions to address recommendations from auditing entities. GAO's 2017 work on the Board assessed whether the Board, in fulfilling its role in overseeing the Capitol Police, had developed and implemented policies that incorporate leading practices to facilitate accountability, transparency, and effective external communication. In that effort, GAO examined the Board's main governing document, its Manual of Procedures, and determined that it fully incorporated one leading practice and partially incorporated five others. Specifically, the Board's manual did develop processes for the internal functions of the Board but did not address any Board responsibilities in ensuring that any audit findings and recommendations to the Capitol Police were promptly resolved. By incorporating leading practices into its manual, the Board can ensure it is facilitating accountability, transparency, and effective external communication as it fulfills its oversight role of the Capitol Police. Why GAO Did This Study The attack on the U.S. Capitol on January 6, 2021, highlighted the critical need to identify and address deficiencies in the management and security functions of the Capitol Police. Various auditing entities have work ongoing related to the attack on the U.S. Capitol, including GAO and the Capitol Police OIG. It is important that the Capitol Police is well positioned to respond to existing and future recommendations from auditing entities. To do so, Capitol Police will also need to work closely with the Capitol Police Board, which has varied and wide-ranging oversight roles and responsibilities per statute. This statement discusses (1) effective practices for addressing recommendations from auditing agencies and (2) GAO's open recommendation to the Capitol Police Board from February 2017. To identify effective practices for addressing recommendations, GAO reviewed reports and testimonies issued from July 2003 through March 2021 that discussed the implementation of GAO recommendations, federal internal control standards, and organizational transformation. GAO also reviewed its February 2017 report on the Capitol Police Board, and used information gathered from its recommendation follow up efforts with the Capitol Police Board in 2020 and 2021.
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  • New York Court Eases Return into Community After Prison
    In U.S Courts
    Federal judges and court staff in Manhattan recently celebrated two dozen individuals’ successful transition back into the community after prison, thanks to a specialized program to help high-risk former offenders maintain crime-free lives.  
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  • Priority Open Recommendations: Department of Health and Human Services
    In U.S GAO News
    What GAO Found In April 2020, GAO identified 55 priority recommendations for the Department of Health and Human Services (HHS). Since then, HHS has implemented eight of those recommendations by, among other things, taking actions to improve the quality of care in the Indian Health Service's federally-operated facilities and improve the accuracy and completeness of Medicaid data to expedite their use for program oversight. In addition to the eight priority recommendations HHS implemented, four recommendations are no longer open priority recommendations, primarily because they became a lower priority as a result of recent regulatory or programmatic changes. In May 2021, GAO identified 18 additional priority recommendations for HHS—including some recommendations related to the Coronavirus Disease 2019 (COVID-19) pandemic—bringing the total number of priority recommendations to 61. These recommendations involve the following areas: COVID-19 response and other public health emergency preparedness; Public health and human services program oversight; Food and Drug Administration oversight; National efforts to prevent, respond to, and recover from drug misuse; Improper payments in Medicaid and Medicare; Medicaid program; Medicare program; Health information technology and cybersecurity; and Health insurance premium tax credit payment integrity. The ongoing COVID-19 pandemic underscores the need for sustained attention on improving HHS's operations. Implementing our priority recommendations could help improve the efficiency and effectiveness of key federal health care programs and funding, including those relevant to the nation's ongoing response to COVID-19. Why GAO Did This Study Priority open recommendations are the GAO recommendations that warrant priority attention from heads of key departments or agencies because their implementation could save large amounts of money; improve congressional and/or executive branch decision-making on major issues; eliminate mismanagement, fraud, and abuse; or ensure that programs comply with laws and funds are legally spent, among other benefits. Since 2015, GAO has sent letters to selected agencies to highlight the importance of implementing such recommendations. For more information, contact A. Nicole Clowers at (202) 512-7114 or ClowersA@gao.gov.
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  • Attorney General Merrick B. Garland Delivered a Policy Address Regarding Voting Rights
    In Crime News
    Good afternoon. It’s wonderful to be here in the Great Hall with the dedicated staff of the Civil Rights Division, joined by our Deputy and Associate Attorneys General, and by our newly-arrived Assistant Attorney General, Kristen Clarke. Welcome. I have tremendous respect for the work you do every day to protect civil rights for everyone in America.
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  • Navistar Defense Agrees to Pay $50 Million to Resolve False Claims Act Allegations Involving Submission of Fraudulent Sales Histories
    In Crime News
    Navistar Defense LLC (Navistar), an Illinois based manufacturer of military vehicles and subsidiary of Navistar International LLC, has agreed to pay $50 million to resolve allegations that it fraudulently induced the U.S. Marine Corps to enter into a contract modification at inflated prices for a suspension system for armored vehicles known as Mine-Resistant Ambush Protected vehicles.
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  • Nuclear Weapons: Actions Needed to Improve Management of NNSA’s Lithium Activities
    In U.S GAO News
    What GAO Found In December 2019, the National Nuclear Security Administration (NNSA) preliminarily estimated construction would cost between $955 million and $1.645 billion for a new lithium processing facility (LPF) at the Y-12 National Security Complex (Y-12) in Tennessee and would be completed between May 2028 and September 2031. This is a substantial increase in cost and schedule; in 2015, NNSA initially estimated that a new facility would cost between $300 and $631 million and could be completed between 2023 and 2025. One reason for the cost and schedule changes is increased facility size, as reflected in a more mature design. GAO's evaluation of the LPF's preliminary cost estimate found it to be substantially comprehensive. NNSA also plans to include a new technology in the facility design based on its most recent technology assessment. In this assessment, NNSA did not collect certain data needed to fully evaluate the lithium produced with the technology. GAO best practices recommend agencies ensure all necessary evidence is collected when assessing the maturity of a new technology. Otherwise, NNSA faces some risks to ensuring the technology is ready to start construction in 2024 and could face future delays to the LPF if testing reveals unexpected problems with lithium produced with this technology. Preliminary Cost and Schedule Estimates for NNSA's New Lithium Processing Facility Increased Over Timea aNNSA's estimates are reported as actual dollars and were not adjusted for inflation. Important program management tools that NNSA could use to help ensure that the agency meets lithium demand are under development and are not consistent with best practices. For example, the lithium program's current schedule and scope of work—as expressed in a work breakdown structure—do not track the same program activities. According to GAO best practices, a program's schedule should be aligned with its work breakdown structure to ensure that activities are completed on time. By aligning these management tools, NNSA could help ensure that the comprehensive scope of work for the program is reflected in the schedule and that NNSA is accomplishing all program activities on time. Why GAO Did This Study Since the 1940s, the nation's supply of lithium used in some nuclear weapons components has been processed at NNSA's Y-12 site. However, due to deteriorating facilities and equipment and the need to reestablish dormant processing capabilities, NNSA faces risks in meeting future lithium demand. To address these challenges, NNSA has developed a strategy to meet lithium demand until the 2030s, by which time it expects the new LPF will be fully operational. The Senate committee report accompanying the National Defense Authorization Act for Fiscal Year 2020 includes a provision for GAO to examine NNSA's lithium programs and projects. GAO's report examines, among other things, (1) the status of current cost and schedule estimates and design activities for NNSA's LPF project and (2) the extent to which NNSA has developed management tools for the lithium program that are consistent with best practices. GAO reviewed NNSA and contractor documentation, compared NNSA's efforts against agency requirements and best practices, and interviewed NNSA officials and Y-12 contractor representatives.
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  • TriWest Healthcare Alliance Corp. Agrees to Pay $179.7 Million to Resolve Overpayments from the Department of Veterans Affairs
    In Crime News
    TriWest Healthcare Alliance Corp. has agreed to pay the United States $179,700,000 to resolve claims that it received overpayments from the U.S. Department of Veterans Affairs (VA) in connection with its administration of certain VA health care programs, the Department of Justice announced today.
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    In Crime Control and Security News
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