1. Lee B. Porter AFOSI Detachment 101 Wright-Patterson AFB OH 15 Aug 06
False Claims Investigations
Good morning/afternoon and welcome to Headquarters Air Force Office of Special Investigations.
Lee B. Porter
AFOSI Detachment 101
Wright-Patterson AFB OH
15 Aug 06
One Team, One Fight, One Family

2. Overview Definitions Common Definitions False Claims
Legal Definition of False Claims
Criminal/Civil Statues
18 USC 286/287
31 USC
41 USC 119
Investigative Methodology

3. Definitions The word “False” Defined
Feigned, spurious, deceptive, false; Contrary to what is true or correct; erroneous, mistaken, untrue, or incorrect; uttering or declaring what is untrue; deceitful, treacherous, or faithless; deceptive; as, false note; having a deceptive resemblance to something that properly bears the name.

4. Definitions (Con’d) The word “Claim” Defined
To ask or seek to obtain by virtue of authority, right, or supposed right; to assert a right to; to demand as due; require; to assert against a possible doubt or contradiction; demand or request for something considered one’s due (lay claim to).
Sir, here is my data. I have spent all my time with OSI.

5. Criminal Statues
18 USC 286; Conspiracy to defraud the Government with respect to claims
Whoever enters into any agreement, combination, or conspiracy to defraud the United States, or any department or agency thereof, by obtaining or aiding to obtain the payment or allowance of any false, fictitious or fraudulent claim, shall be fined under this title or imprisoned not more than not more than ten years, or both.

6. Criminal Statues (Con’d)
18 USC 287; False, fictitious or fraudulent claims
Whoever makes or presents to any person or officer in the civil, military, or naval service of the United States, or to any department or agency thereof, any claim upon or against the United States, or any department or agency thereof, knowing such claim to be false, fictitious, or fraudulent, shall be imprisoned not more than five years and shall be subject to fine in the amount provided in this title.
Sir, here is SA Cannon’s data. I’d like to point out that SA Cannon has worked incredibly hard and received his Bachelor’s degree in Oct. He immediately applied for and was accepted to a Master’s program. We’re very proud of his accomplishments. SA Cannon is scheduled to PCS to the Region 4 OES position this October.

7. Civil Statues 31 USC 3729; False Claims
Liability for Certain Acts. --Any person who –
(1) Knowingly presents or causes to be presented, to an officer or employee of the United States Government or a member of the Armed Forces of the United States a false or fraudulent claim for payment or approval;
(2) Knowingly makes, uses, or causes to be made or used, a false record or statement to get a false or fraudulent claim paid or approved by the Government;
(3) Conspires to defraud the Government by getting a false or fraudulent claim allowed or paid;
(4) has possession, custody, or control of property of money used, or to be used, by the Government and, intending to defraud the Government or willfully to conceal the property, delivers, or causes to be delivered, less property than the amount for which the person receives a certificate or receipt;

8. Civil Statues (Con’d) 31 USC 3729; False Claims
Liability for Certain Acts. --Any person who – (Continued)
Authorized to make or deliver a document certifying receipt of property used, or to be used, by the Government and, intending to defraud the Government, makes or delivers the receipt without completely knowing that the information on the receipt is true;
Knowingly buys, or receives as a pledge of an obligation or debt, public property from an officer or employee of the Government or a member of the Armed Forces who lawfully may not sell or pledge the property; or
Knowingly makes, uses, or causes to be made or used, a false record or statement to conceal, avoid, or decrease an obligation to pay or transmit money or property to the Government

9. Civil Statues (Con’d) 31 USC 3730; Civil actions for false claims
Responsibilities of the Attorney General – The Attorney General diligently shall investigate a violation under section If the Attorney General finds that a person has violated or is violating section 3729, the Attorney General may bring a civil action under this section against the person.
Actions by Private Persons (1) A person may bring a civil action for a violation of section 3729 for the person and for the United States Government. The action shall be brought in the name of the Government. The action may be dismissed only if the court and the Attorney General give written consent to the dismissal and their reasons for consenting

10. Civil Statues (Con’d) 31 USC 3730; Civil actions for false claims
Actions by Private Persons (2) A copy of the complaint and written disclosure of substantially all material evidence and information the person possesses shall be served on the Government pursuant to Rule 4 (d) (4) of the Federal Rules of Civil Procedure.
(3) The Government may, for good cause shown, move the court for extensions of the time during which the complaint remains under seal under paragraph (2). Any such motions may be supported by affidavits or other submissions in camera. The defendant shall not be required to respond to any complaint filed under this section until 20 days after the complaint is unsealed and served upon the defendant pursuant to Rule 4 of the Federal Rules of Civil Procedure.

11. Civil Statues (Con’d) 31 USC 3730; Civil actions for false claims
Actions by Private Persons. -- (4) Before the expiration of the 60-day period or any extensions obtained under paragraph (3), the Government shall—
(A) proceed with the action, in which case the action shall
be conducted by the Government; or
(B) notify the court that it declines to take over the action,
in which case the person bringing the action shall have
the right to conduct the action.

12. Civil Statues (Con’d) 31 USC 3730; Civil actions for false claims
Actions by Private Persons. -- (5) When a person brings an action under this subsection, no person other than the Government may intervene or bring a related action based on the facts underlying the pending action.

13. Civil Statues (Con’d) 31 USC 3731; False Claims procedure
31 USC 3732; False Claims jurisdiction

14. Civil Statues (Con’d)
41 USC 119; Fraudulent claims, vouchers, statements, etc.; jurisdiction
Every person who makes or causes to be made, or presents or causes to be presented to any officer, agent, or employee of any Government agency any claim, bill, receipt, voucher, statement, account, certificate, affidavit, or deposition, knowing the same to be false, fraudulent, or fictitious or knowing the same to contain or to be based on any false, fraudulent, or fictitious statement or entry, or who shall cover up or conceal any material fact, or who shall use or engage in any other fraudulent trick, scheme, or device, for the purpose of securing or obtaining, or aiding to secure or obtain, for any person any benefit, payment, compensation, allowance, loan, advance, or emolument from the United States or any Government agency in connection with the termination, cancellation, settlement, payment, negotiation, renegotiation, performance, procurement, or award of a contract with the United States or with any other person, and every person who enters into an agreement, combination, or conspiracy so to do, (1) shall pay to the United States an amount equal to 25 per centum of any amount thereby sought to be wrongfully secured or obtained but not actually received, and (2) shall forfeit and refund any such benefit, payment, compensation, allowance, loan, advance, and emolument received as a result thereof and (3) shall in addition pay to the United States the sum of $2,000 for each such act, and double the amount of any damage which the United States may have sustained by reason thereof, together with the costs of suit.

15. Criminal/Civil Statues (Con’d)
These are the statues used on most of our Base and Central Systems fraud cases
Defective Pricing
Product Substitution
Cost Mischarging
Defective Products
Public Corruption
Normally used in conjunction with a false statements or other criminal statue

16. Investigative Methodology
Common theme on both criminal and civil statues is the submission of a false document to obtain payment
Dependent on the initial information in the allegation and the type of case
Pay and Allowance and Travel Voucher cases easier
Services and Maintenance Contracts more difficult
Most systems level cases require much more effort and ingenuity
So where do you start???

17. Investigative Methodology
Start with your crime scene (Contract File and DD Form 250s with invoices)
You have to know what the specific requirements were before you start trying to prove the claim was false
Compare what was required by the contract with what is stated on the invoices and DD 250s then assess your allegation
On some cases you may have to dig further into the drawings, specifications or other guidance/requirements
Don’t be afraid to talk with subject matter experts such as Engineers, Technicians, Labs etc., (you may need one later if you go to trial)

18. Investigative Methodology (Con’d)
Interviews of government and contractor personnel
Consider and use of subpoenas and/or search warrants to obtain additional documentation the government does not have or maintain
If subcontractors or outside labs were used consider interviewing and giving them subpoenas
Consider testing or additional testing when appropriate
Keep updating your AUSA and Fraud Counsel as you go to avoid having to go back on issues

19. Investigative Methodology (Con’d)
Stay focused on the issue of proving the claim was false when submitted and you didn’t get what was paid for
Criminal Statues have a five year statue of limitations
Civil Statue
Six years after the date on which the violation was committed or,
Three years after the date when facts are known or reasonably should have been known

20. Summary Definitions Common Definitions False Claims
Legal Definition of False Claims
Criminal/Civil Statues
18 USC 286/287
31 USC
41 USC 119
Investigative Methodology

21. Questions? SA Lee B. Porter AFOSI Detachment 101
Wright-Patterson AFB, OH
DSN or Comm (937)