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Report: DOD recovered $1.9 billion in fraud cases

RAF MILDENHALL, England — The Defense Criminal Investigative Service recently completed a record-setting year of recoveries as a result of scores of investigations worldwide.

The announcement of the record $1.9 billion returned to the government was published as part of the Department of Defense inspector general’s biannual report to Congress.

The 120-page report, which covers the period April through September, details the accomplishments of the audits and investigations across the four branches of the military, including fraud by Defense Department contractors, the unlawful export of weapons and the theft of military hardware that led to $21 billion in criminal judgments as well as 177 indictments and 139 convictions.

Some of the highlights of the report include:

¶ "Defense contractor Eagle Global Logistics agreed to pay the government $4 million to resolve claims that an employee filed false claims with prime contractor Kellogg, Brown and Root.

¶ "The Boeing Corporation agreed to pay a $565 million civil settlement and a $50 million fine for the use of sensitive bid information from a competitor to win rocket launch contracts.

¶ "Kal Nelson Aviation, Inc., was fined $1 million for the illegal shipment of aircraft and missile components to a company in Southeast Asia without the required export license.

¶ "Taiwanese national Ko-Suen "Bill" Moo was found to be an espionage agent for the People’s Republic of China. Moo was sentenced to 78 months in prison and fined $1 million for attempting to ship military technology to China.

¶ "ABL Aerospace, Inc., president Alicia Hed-Ram was sentenced to five years probation and the company ordered to pay a $500,000 fine for illegally exporting missile components to China.

¶ "Tenet Healthcare Corporation agreed to pay the government $900 million to settle allegations it filed false claims to Tricare, Medicare and other government health programs. The settlement was the largest filed in the 150-year history of the False Claims Act."

The report also details another contractor fined $1.8 million for filing false claims and statements about mine-resistant vehicles as well as a Florida physician jailed for life for filing false Tricare claims and the excessive and inappropriate distribution of controlled substances to Tricare patients that led to five deaths.

The DCIS also participated in investigations related to Hurricanes Katrina and Rita.

All told, the DOD inspector general’s investigations and audits totaled $1.6 billion in civil judgments and $335.6 million in administrative judgments, according to the congressional report.

The IG’s staff is now poring through records for the $10.7 billion the Army has paid contractors and vendors since the start of the war in Iraq for the report "Internal Controls over Out-of-Country Payments."

The report also details the IG’s growth in the Middle East and domestically. The IG opened a new field auditing office in Qatar, as part of the U.S. Central Command and staffed it with eight rotating auditors.

DCIS agents have integrated with regional FBI anti-terrorism branches from Boston to Long Beach, Calif., with 50 full- and part-time agents dispatched to Joint Terrorism Task Force offices.

The IG’s report to Congress is only one of several government reports investigating the military.

The Government Accountability Office recently released a report detailing poor oversight for military contractors in Iraq and the Library of Congress’ Congressional Research Service regularly distributes reports on the military.


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