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Before yesterdayOffice of Inspector General

Georgia CDL Examiner and Owner of Alabama CDL School Sentenced

By Eric.Weems
On June 11, 2020, Michael Jordan and James Welburn were sentenced in the U.S. District Court for the Middle District of Alabama for their roles in a conspiracy to falsify DOT examinations. Jordan was a third-party CDL examiner who operated in Columbus, Georgia. Welburn was the owner and president of American Truck Driving Academy (ATDA), a commercial driver license (CDL) training school located in Opelika, Alabama. Jordan was sentenced to 36 months’ probation, a $10,250 fine, a $100 special assessment, and 100 hours’ community service. Welburn was sentenced to 60 months’ probation, a $250,000 fine, and a $100 special assessment.
 
Welburn was indicted on July 17, 2019 and pleaded guilty on February 12, 2020. Jordan was charged by information on July 10, 2019 and pleaded guilty on July 19, 2019. The investigation revealed that, in exchange for cash payments from Welburn, Jordan falsified CDL examinations for ATDA students.
 
DOT-OIG conducted this investigation with assistance from Federal Motor Carrier Safety Administration and the Georgia Department of Driver Services.
Date: 
Thursday, June 11, 2020
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  • June 25th 2020 at 14:46

UK Citizen Pleads Guilty To Attempted Aircraft Parts Fraud

By Eric.Weems
On June 16, 2020, Richard Paul Harper, a citizen of the United Kingdom, pleaded guilty to attempted aircraft parts fraud in the U.S. District Court for the Eastern District of Tennessee.
 
In his plea agreement, Harper admitted that he obtained a helicopter with significant damage to its underbelly. In lieu of necessary, costly repairs, the fuselage of the helicopter was switched with the fuselage of another helicopter that had crashed in New Jersey, and the original data plates were affixed to the fuselage of that helicopter. This data plate switch served to conceal the true history of the helicopter’s damage and repairs. Harper, with intent to defraud, actively marketed and tried to sell the resulting helicopter with switched data plates to an aircraft broker and other unsuspecting purchasers.
 
DOT-OIG and Homeland Security Investigations are conducting this investigation with substantial assistance from FAA.
Date: 
Tuesday, June 16, 2020
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  • June 24th 2020 at 18:10

Imprisoned Former FAA Inspector Ordered To Pay Restitution

By Eric.Weems
On June 11, 2020, Manuel R. Fernandez, formerly an FAA aviation safety inspector, was ordered by the U.S. District Court for the Southern District of Florida to pay $148,145.81 in restitution to FAA and Honeywell Aerospace.
 
On December 5, 2019, Fernandez was sentenced to 75 months’ incarceration with 3 years of supervised release. Fernandez was further ordered to pay a $2,100 assessment and $10,000 fine. He was also forbidden to further work in the aviation parts business. He surrendered himself to the U.S. Marshals Service in January 2020.
 
The investigation revealed that between 2010 and 2013, Fernandez entered into a criminal conspiracy with Avcom Avionics & Instruments (Avcom), an FAA-authorized repair station in South Florida. In violation of his official duties as an FAA inspector, Fernandez conspired to provide Avcom with unauthorized technical publications, notices, and warnings about inspections and investigations and competitors’ confidential information in exchange for monies and gifts.
 
This investigation was conducted by DOT-OIG and the Federal Bureau of Investigation with substantial assistance from FAA.
Date: 
Thursday, June 11, 2020
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  • June 24th 2020 at 15:50

Two California Companies Plead Guilty to Violations of the Clean Water Act

By ada.valaitis
On June 10, 2020, United Pumping Service, Inc. and United Storm Water, Inc. pleaded guilty to violations of the Clean Water Act in U.S. District Court for the Central District of California.
 
On June 2, 2020, United Pumping Services, Inc. and United Storm Water, Inc. were charged in a superseding information to which both pleaded guilty on June 10. The superseding information stated that between May 11 and May 15, 2015, United Pumping Services, Inc. and United Storm Water Inc. aided and abetted each other to transport and deliver six separate loads of industrial wastewater to another company’s facility. The receiving company then discharged the industrial wastewater, which contained arsenic, to a municipal treatment plant in Los Angeles County. United Pumping Services, Inc. and United Storm Water, Inc. did not disclose the arsenic concentration in the wastewater, which caused the receiving company to violate its discharge permit with Los Angeles County when it unknowingly discharged the arsenic-laden water without first pre-treating it. Consequently, United Pumping Service, Inc. and United Storm Water, Inc. negligently caused a violation of the pre-treatment program under the Clean Water Act.
 
DOT-OIG is conducting this investigation with the Environmental Protection Agency Criminal Investigation Division.
Date: 
Wednesday, June 10, 2020
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  • June 24th 2020 at 14:00

Former FHWA West Virginia Division Administrator Pleads Guilty to Health Care Fraud

By ada.valaitis
On June 10, 2020, Edward Stephen pleaded guilty in U.S. District Court for the Southern District of West Virginia to Federal health care fraud. Stephen is the former Administrator of the West Virginia Division of the Federal Highway Administration. Stephen was charged by information on May 18, 2020.
 
The investigation revealed that Stephen fraudulently enrolled extended family members in his Federal health care plan, knowing they were not eligible for Federal health care benefits. Specifically, Stephen enrolled his sister as his wife and his niece as his step-child so they both would obtain Federal health care coverage they were not entitled to receive. This scheme lasted from 2005 to 2017 and included several years when Stephen resided and worked in Charleston, West Virginia. In total, the health insurance company was defrauded out of $151,660.53 in fraudulent premium payments and reimbursements.
 
DOT-OIG is conducting this investigation with the Office of Personnel Management Office of Inspector General.
Date: 
Wednesday, June 10, 2020
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  • June 23rd 2020 at 20:30

Tennessee Man Indicted for Illegally Operating an Aircraft

By ada.valaitis
On June 8, 2020, Richard “Stassin” Sexton was indicted by a grand jury in the State of Tennessee Criminal Court in Rutherford County for multiple counts of operating an aircraft without a license, reckless endangerment with a deadly weapon, and criminal impersonation for impersonating a licensed professional. The indictment alleged that Sexton illegally operated an aircraft in Rutherford County, Tennessee, on September 8, September 9, and October 1, 2019.
 
The investigation alleged that Sexton, although having his student pilot’s license suspended in June 2019, operated an aircraft on the above listed dates with a passenger on board. Sexton allegedly did not have a private pilot’s license to operate the aircraft with passengers on board, and he failed to obtain a complex aircraft endorsement for the aircraft as required. Further, the aircraft Sexton operated was allegedly not airworthy, according to the Federal Aviation Administration (FAA) and mechanics who worked on the aircraft.
 
DOT-OIG is conducting this investigation with the Tennessee Highway Patrol Criminal Investigation Division and with substantial assistance from FAA.
 
Note: Indictments, informations, and criminal complaints are only accusations by the Government. All defendants are presumed innocent unless and until proven guilty.
Date: 
Monday, June 8, 2020
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  • June 23rd 2020 at 19:30

South Florida Moving Company and Owner Fined Over $1.2 Million for Deceptive Practices

By ada.valaitis
On May 28, 2020, a final civil judgement was entered against Maxx J. Socher and his company Moving Services Accounting and Storage, Inc., which previously operated as Full Service Van Lines, in the U.S District Court for the Southern District of Florida. The default judgment as to a liability and an order for permanent injunction was for a total of $1,296,566, consisting of $300,000 in restitution, $700,000 to the State of Florida Department of Legal Affairs, and $296,566 in Federal penalties. This judgment did not account for the Government’s attorney fees, for which a ruling is still pending.
 
This judgment was made in response to the December 2018 filing of civil complaints by the Florida Attorney General’s Office against seven individuals and their respective companies—a total of 19 household goods companies or their affiliated entities—for deceptive moving practices. The Federal civil filing was part of a joint household goods investigation aimed at various household goods moving companies. The Florida Attorney General’s Office completed the filings reports in furtherance of Federal civil prosecution.
 
The complaints alleged that the moving companies deliberately loaded people’s belongings onto a truck, raised prices, and forced customers to pay before releasing the items. The moving companies, located in Broward and Dade counties, allegedly used false or deceptive advertising to induce consumers to purchase moving services. The companies claimed the services would be performed by highly trained professional or expert movers. However, untrained laborers regularly performed the moves, often causing damage to, destroying, or stealing the consumers’ property. Many consumers allegedly received low-price, purportedly binding estimates from the companies.
 
DOT-OIG conducted this investigation with the Florida Attorney General’s Office, Consumer Protection Division.
Date: 
Thursday, May 28, 2020
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  • June 23rd 2020 at 18:56

Memorandum to the Secretary: Key Potential Risk Areas for the Department of Transportation in Overseeing CARES Act Requirements

By ada.valaitis

Implementing the Coronavirus Aid, Relief, and Economic Security (CARES) Act is among the Department of Transportation’s (DOT) highest priorities in this time of national emergency. The CARES Act provides DOT with over $36 billion to prevent, prepare for, and respond to COVID-19 across all modes of transportation. To its credit, DOT swiftly distributed these funds and has begun implementing the Act’s requirements to provide much-needed relief to American workers, families, and businesses. As the Department is aware, the volume of CARES Act funds and the speed with which the funds have been disbursed creates oversight challenges. Therefore, to support the Department in meeting its mission while promoting effective stewardship of significant taxpayer dollars, we are providing a summary of key risk areas for DOT’s consideration in bolstering its oversight of CARES Act grantees and contractors. These potential risk areas and our suggested actions to mitigate those risks are drawn largely from our prior work assisting DOT with oversight of a significant influx of funds for economic stimulus and emergency relief. By maintaining focus on these risk areas early on and putting in place key internal controls, DOT can promote efficiencies; help ensure compliance; and better prevent fraud, waste, and abuse.

Project ID: 
CC2020005
Date: 
Wednesday, June 17, 2020
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  • June 19th 2020 at 14:30

Rec Maint Rpt (172)_2020.06.11-2020.06.18_CSV.csv

By ada.valaitis
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Import Date: 
Thursday, June 18, 2020 - 08:44
  • June 18th 2020 at 13:44

FAA Debars Former Michigan Airport Official

By ada.valaitis
On May 28, 2020, the Federal Aviation Administration (FAA) debarred James Warner of Commerce Township, Michigan, from participating in Federal procurement and non-procurement transactions. Warner’s debarment is for a period of 3 years, beginning from the date of his conviction and sentencing on February 5, 2020.
 
On June 5, 2019, Warner, a former department manager in utilities and infrastructure at the Wayne County Airport Authority (WCAA), was convicted by a jury in U.S. District Court, Detroit, Michigan, for his role in a complex white-collar fraud scheme at the Detroit Metropolitan Wayne County Airport (DTW). He was found guilty on 10 counts, including conspiracy, Federal program bribery, Federal program theft, money laundering, and obstruction of justice. These charges are all in connection with maintenance and repair contracts for runways and parking structures at DTW.
 
From 2003 through 2014, William A. Pritula & Sons, LLC (Pritula) held contracts for pavement repair, replacement, and similar work at DTW. With the knowledge of and permission from Pritula's owner, William Pritula, Warner created and submitted fraudulent invoices that indicated the company had performed work at DTW. In return, Pritula gave Warner kickbacks. From September 2010 through October 2014, Pritula received over $18 million from WCAA, and Warner received over $5 million of that amount.
 
William Pritula was previously charged, sentenced, and debarred by FAA for his role in the fraud scheme.
 
DOT-OIG conducted this investigation with the Federal Bureau of Investigation.
 
Note: Exclusion actions (suspensions and debarments) are frequently for a specific period of time, and GSA’s System for Award Management should be consulted to find out whether a company is currently excluded.
Date: 
Thursday, May 28, 2020
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  • June 16th 2020 at 14:44

Virginia Man Indicted for Operating an Aircraft Without an Airman’s Certificate

By Eric.Weems

On May 27, 2020, Ryan Parker was indicted in the U.S. District Court in the Eastern District of Virginia for one count of operating an aircraft without an airman’s certificate. The indictment alleges that on September 27, 2018, Parker served as an airman without authorization.

Parker previously operated an aircraft cleaning business, which gave him access to small aircraft at various regional airports in Virginia.
DOT-OIG is conducting this investigation.

Note: Indictments, informations, and criminal complaints are only accusations by the Government. All defendants are presumed innocent unless and until proven guilty.

 

Date: 
Wednesday, May 27, 2020
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  • June 8th 2020 at 17:49

Operator of Charter Bus Company Sentenced for Bribing a Federal Safety Inspector

By Eric.Weems

On May 26, 2020, the U.S. District Court for Massachusetts sentenced Yat Kuen “Andy” Chan (Chan), a consultant for L&W Travel Inc. (L&W), a passenger bus charter company, to 8 months’ home confinement, 24 months’ probation, and a $300 assessment fee. 

On October 8, 2019, Chan pleaded guilty to conspiracy to pay and bribe a public official. Chan conspired to bribe a Federal Motor Carrier Safety Administration (FMCSA) safety investigator to influence a compliance review and safety audit of L&W in July and August 2018. Specifically, Chan paid the safety investigator $2,800 so that, despite at least two safety violations, all of L&W’s buses would remain in service. Chan also wanted to ensure that L&W was not subject to significant fines despite multiple other DOT safety violations.

DOT-OIG conducted this investigation jointly with FBI, with assistance from FMCSA.

 

Date: 
Tuesday, May 26, 2020
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  • June 8th 2020 at 16:40

Three Former Executives of Wisconsin-based Corporation Charged with Conspiracy

By Eric.Weems
On May 21, 2020, the U.S. Attorney’s Office, Western District of Wisconsin, filed charges in the U.S. District Court against three former executives of 5R Processors, Ltd., an electronic waste and recycling company. The separate informations allege that between January 2011 and approximately November 2016, James Moss, former president; Bonnie Dennee, former vice president; and Thomas Drake, the founder, chief executive officer, and chairman of the board of 5R Processors, Ltd., each conspired with others to store and transport hazardous waste without required permits and manifests, in violation of the Resource Conservation and Recovery Act. In addition, Mr. Moss allegedly failed to truthfully account for and pay all Federal taxes through appropriate employee deductions and was also charged with conspiracy to evade IRS collection activities. Plea agreements for each party were submitted to the court for consideration.
 
DOT-OIG is conducting this investigation jointly with the Environmental Protection Agency-Criminal Investigative Division, Federal Bureau of Investigation (FBI), Internal Revenue Service, and Wisconsin Department of Natural Resources.
 
Note: Indictments, informations, and criminal complaints are only accusations by the Government. All defendants are presumed innocent unless and until proven guilty.
Date: 
Thursday, May 21, 2020
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  • June 8th 2020 at 15:15

Rec Maint Rpt (170)_2020.05.21-2020.06.04_CSV.csv

By nathan.richmond
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Thursday, June 4, 2020 - 09:16
  • June 4th 2020 at 14:16

Letter from Deputy Inspector General Behm to Chairwoman Maloney and Chairmen DeFazio and Connolly Regarding Howard “Skip” Elliott’s Designation as Acting Inspector General and Ongoing OIG Work

By ada.valaitis

Deputy Inspector General Mitch Behm responded to a May 19, 2020, letter from Chairwoman Maloney and Chairmen DeFazio and Connolly requesting information about OIG’s ongoing work at the time of the President’s designation of Howard “Skip” Elliott to serve as Acting Inspector General of the Department of Transportation. In his letter, Deputy Inspector General Behm confirmed that he is prepared to assume oversight of all of OIG’s efforts related to the Pipeline and Hazardous Materials Safety Administration, given Acting Inspector General Elliott’s recusal from those matters. In light of this recusal and his commitment to preserving the independence of OIG, Acting Inspector General Elliott requested that Deputy Inspector General Behm provide the detailed information requested by the Chairwoman and Chairmen. As such, the enclosure to this letter provides (1) a list of audits and investigations that were ongoing as of Mr. Elliott’s appointment as Acting Inspector General on May 15, 2020, and (2) a list of projects relating to the Office of the Secretary of Transportation that were opened between January 20, 2017, and the present. Deputy Inspector General Behm also confirmed that since becoming Acting Inspector General, Mr. Elliott has not directed or requested the modification of any audit or investigation.

Project ID: 
CC2020004
Date: 
Tuesday, June 2, 2020
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  • June 4th 2020 at 13:48

Letter from Acting Inspector General Elliott to Chairwoman Maloney and Chairmen DeFazio and Connolly Regarding His Designation as Acting Inspector General and Ongoing OIG Work

By ada.valaitis

This letter is in response to a May 19, 2020, letter from Chairwoman Maloney and Chairmen DeFazio and Connolly regarding Howard R. “Skip” Elliott’s designation by President Donald J. Trump to serve as Acting Inspector General of the Department of Transportation. Acting Inspector General Elliott stated that he is honored by the opportunity to fill the role of Acting Inspector General and that he intends to remain in the position until a permanent Inspector General is confirmed or he is otherwise directed by the President. In addition, he confirmed that Mitch Behm will continue to serve as the Deputy Inspector General, a position he has held for more than 4 years. Acting Inspector General Elliott wrote that he holds a deep respect for the mission and role of OIG and that he will perform his duties with the utmost integrity and without any inappropriate influence or interference with OIG’s ongoing or planned work. To that end, Acting Inspector General Elliott stated that he is recusing himself from any audit or investigative matters that pertain directly to the Pipeline and Hazardous Materials Safety Administration (PHMSA), where he will continue to serve as Administrator. He stated that he asked Deputy Inspector General Behm to provide the information Chairwoman Maloney and Chairmen DeFazio and Connolly requested on OIG’s ongoing work in a separate correspondence. Acting Inspector General Elliott also confirmed that he has not directed or requested the modification of any audit or investigation since his appointment on May 15, 2020.

Project ID: 
CC2020003
Date: 
Tuesday, June 2, 2020
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  • June 4th 2020 at 13:46

Semiannual Report to Congress: October 1, 2019 - March 31, 2020

By ada.valaitis

As required by the Inspector General Act of 1978 (as amended), this Semiannual Report summarizes the activities of the Office of Inspector General for the preceding 6-month period.

Requested By: 
Required by the Inspector General Act of 1978 (as amended)
Date: 
Wednesday, April 1, 2020
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  • May 29th 2020 at 16:41

Changes in Airline Service Differ Significantly for Smaller Communities, but Limited Data on Ancillary Fees Hinders Further Analysis

By ada.valaitis
What We Looked At
In 2013 and 2014, reports from the Government Accountability Office (GAO) and the Massachusetts Institute of Technology (MIT) documented a disproportionate decline in commercial air service to smaller communities. Since that time, there have been concerns that small- and medium-sized communities continue to have limited access to the National Airspace System. The lack of a recent analysis, as well as major changes in the industry, prompted our office to update the GAO and MIT reports. Accordingly, our objective for this self-initiated audit was to detail recent trends in the aviation industry, particularly as they relate to small- and medium-sized communities.
 
What We Found
Compared to larger metropolitan areas, smaller communities have experienced disparate effects from several recent aviation industry trends. For example, departures declined in larger communities by roughly 12 percent and in smaller communities by about 34 percent. Connectivity—the ability to connect to and move throughout the national air system—declined by 16 percent in smaller communities, double the rate in larger communities; however, data limitations hindered our analysis of delays and cancellations. Similarly, competitive conditions improved in larger communities, but grew worse in smaller communities, where the cost to fly was also greater. Finally, we found that some airlines have dramatically increased their revenues from booking charges and other ancillary fees. However, the Department of Transportation (DOT) does not collect adequate data on ancillary fees, which reduces its ability to fully assess competition in the industry. Also, ancillary fees are not subject to the excise tax that funds the Airport and Airway Trust Fund (AATF). We conservatively estimate that certain carriers’ use of booking fees as a revenue source reduced AATF revenues by $60.6 million in 2019 alone.
 
Our Recommendations
We made three recommendations to address DOT’s data shortcomings and improve departmental clarity on the impact of ancillary fees on AATF receipts. The Department concurred with one of our three recommendations.
Requested By: 
Self-initiated
Project ID: 
EC2020036
Date: 
Wednesday, May 27, 2020
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  • May 29th 2020 at 16:04

Aspiring Aviation Mechanic Pleads Guilty To Bribing FAA Examiner

By Eric.Weems
On May 12, 2020, in the U.S. District Court for the Northern District of Georgia, Frank A. Jalion Amaro of Las Vegas, Nevada, pleaded guilty to bribery of a public official.
 
Amaro was an aspiring aviation mechanic. He was charged via a March 5, 2020, information that disclosed the following: Using an alias, Amaro offered an FAA Designated Mechanic Examiner (DME) $2,500 in exchange for a passing score on the examination required for all certified aviation mechanics. When the DME accepted the offer, Amaro sent $500 via a mobile payment service from Las Vegas and then traveled to the Atlanta area to hand over the rest of the cash.
Date: 
Tuesday, May 12, 2020
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  • May 28th 2020 at 13:52

FHWA Debars Pennsylvania Painting Company and Owner

By Eric.Weems
On May 11, 2020, the Federal Highway Administration (FHWA) debarred Hercules Painting Company, New Castle, Pennsylvania, and its owner, Maria Savakis, from participating in Federal nonprocurement and procurement transactions for 3 years.
 
In July 2017, Savakis was sentenced to 2 years of probation and $2,600 in fines following an earlier guilty plea to theft from a healthcare program. The theft was part of a $61,689 payroll scheme related to construction work on the federally funded George C. Platt Memorial Bridge Project in Philadelphia.
 
DOT-OIG is conducting this investigation with the FBI, Department of Labor OIG, Environmental Protection Agency–Criminal Investigation Division, Homeland Security Investigations, and Internal Revenue Service Criminal Investigation. FHWA provided substantial assistance.
 
Note: Exclusion actions (suspensions and debarments) are frequently for a specific period of time and the System for Award Management should be consulted to find out whether a company is currently excluded.
Date: 
Tuesday, May 26, 2020
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  • May 27th 2020 at 16:11
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