Investigative Reports

We investigated an allegation that Douglas Domenech, Assistant Secretary for Insular and International Affairs, U.S. Department of the Interior (DOI), violated his Federal ethics pledge under Executive Order No. 13770 by meeting with an official from his former employer, the Texas Public Policy Foundation (TPPF), during the required 2-year recusal period following Domenech’s resignation from the TPPF.Although we did not find that Domenech violated his ethics pledge as alleged, we found that he did violate Federal ethics regulations that prohibit Federal employees for 1 year from participating with their former employers in particular matters involving specific parties. Domenech, who began working for the DOI in January 2017 as a special Government employee (SGE), arranged and held two meetings with a TPPF attorney in April 2017 about issues in litigation between DOI bureaus and the TPPF. Domenech had a duty to consider whether his involvement in these meetings would cause a reasonable person to question his impartiality, and his failure to make that determination violated the regulation.Domenech did not violate his ethics pledge, however, because he was an SGE when the meetings took place and thus was not required to sign the pledge at the time. He signed the pledge in September 2017, after he became a permanent DOI employee.

The OIG investigated allegations that a gas marketing company, B. Charles Rogers Gas, Ltd. (BCR), underreported natural gas liquid volumes and overcharged companies producing gas from Federal wells in New Mexico, which resulted in a loss of Federal and tribal mineral royalties.We found that Billy Charles Rogers, Jr., and Wynon Rogers, co-owners of the BCR, and Thomas R. Lutner, III conspired to defraud approximately 30 oil and gas companies. From 2003 through 2015, the BCR purchased gas from companies with Federal, Indian, State, and private leases in the San Juan Basin area of New Mexico and Colorado. Lutner, who worked as a gas supply originator, then purchased aggregate gas packages from the BCR. The Rogerses and Lutner then provided producers false transaction statements in connection with the BCR’s gas purchases that underreported the volume and value of the natural gas liquids that the BCR purchased. Lutner and the Rogerses knew the true volumes and prices for the natural gas liquids, but the BCR provided producers with false monthly statements and paid them far less than what the BCR owed. The Rogerses then shared the fraudulent profits with Lutner.As a result of the BCR’s fraud scheme, the victim companies relied upon the false gas marketing statements issued to them by the BCR and unknowingly failed to properly calculate mineral royalties associated with Federal and tribal leases. The companies thus paid less in royalties than they should have.The United States Attorney’s Office for the Northern District of Texas criminally prosecuted this case, resulting in guilty pleas by all three co-conspirators for violating Title 18 U.S.C. § 371, conspiracy to commit wire fraud. Charles and Wynon Rogers were each sentenced to serve 6 months in prison and 2 years of probation and ordered to pay joint restitution totaling $7,718,876.60. Lutner was sentenced to serve 10 months in prison and 1 year of probation and ordered to pay restitution totaling $16,900,737.66. As a result, over $24.6 million was returned to the oil and gas companies victimized by this criminal conspiracy.Additionally, the three subjects paid approximately $4.375 million to settle a civil false claims act case with the Department of Justice’s Civil Division. The funds received recovered unpaid Federal mineral royalties the subjects owed to the Office of Natural Resources Revenue (ONRR).

Michael Hollingsworth, a resident of New York, pleaded guilty in U.S. District Court, Southern District of New York, on November 19, 2019, for accepting a gratuity in return for his involvement in falsifying an Amtrak pre-employment drug test. According to the indictment, Hollingsworth worked as a drug test sample collector. He received cash from an Amtrak job applicant to submit a fraudulent sample to ensure the applicant passed Amtrak’s drug screening requirement. Hollingsworth will be sentenced at a later date.

The OIG investigated an allegation that a Bureau of Land Management (BLM) employee may have accessed and viewed child pornography on a Government computer on multiple occasions.We found that the employee accessed and viewed adult pornography on the Government computer while inside a Government office but found no evidence the employee viewed child pornography. The employee admitted viewing adult pornography on multiple occasions but denied any involvement with child pornography. Accessing and viewing pornography on a Government computer violates DOI policy; the employee said he knew that DOI policy prohibited his actions.The employee retired during our investigation.

Alpha Painting & Construction Company, Inc., an industrial painting and construction company based in Baltimore, was sentenced November 14, 2019, in United States District Court, Eastern District of Pennsylvania, to five-years’ probation, a $500,000 fine, and forfeiture of $10.9 million. Alpha was previously found guilty of conspiracy, wire fraud, and false statements related to a multimillion-dollar fraud scheme.The scheme involved two Pennsylvania Department of Transportation contracts to rehabilitate bridges in the Philadelphia area including the 30th Street Station Bridge and Girard Point Bridge. The terms of the contracts required Alpha to use a qualified Disadvantaged Business Enterprise to provide supplies for the projects. Instead, Alpha used a now defunct DBE as a pass-through to create the appearance that DBE program requirements had been met. In exchange for participating in the scheme, the DBE received a percentage of funds garnered from falsified invoices it submitted, according to court documents. In addition, Alpha falsified invoices from out of state projects including an Amtrak bridge project to use as DBE credits.Agents from Amtrak’s Office of Inspector General, along with the U.S. Department of Transportation OIG, the U.S. Department of Labor OIG, and the FBI investigated the case.

Andre Wilburn, a resident of New York, pleaded guilty in U.S. District Court, Eastern District of New York, on October 24, 2019, to access device fraud and aggravated identity theft for his involvement in an Amtrak eVoucher scheme. Wilburn and his co-conspirators used stolen credit card information to make unauthorized purchases of Amtrak tickets and then cancelled or exchanged those tickets for eVouchers. Subsequently, they sold the fraudulently obtained eVouchers on the internet. Wilburn’s sentencing is pending.

An Amtrak supervisor resigned on November 14, 2019, for violating company policy by stealing company property and misusing his own and other employees’ company time for personal tasks. The case has been referred to the U.S. Department of Justice, and criminal proceedings are pending.

The OIG investigated allegations that Fort Peck Assiniboine & Sioux Tribal Police Officer Willard White stole $40,000 from the Tribe. White allegedly obtained the funds under the pretense of creating a youth diversion program but spent the money on personal purchases and did not create the program.We found the Tribe gave White $40,000 to create a youth diversion program. White, however, spent the entire amount on personal purchases, none of which supported the establishment of the proposed program. In addition, White did not report the $40,000 as income to the Internal Revenue Service (IRS).White pleaded guilty in U.S. District Court for the District of Montana to one count of18 U.S.C. § 1343, Wire Fraud, and one count of 26 U.S.C. § 7201, Income Tax Evasion. On October 9, 2019, White was sentenced to 6 months in prison and 2 years of supervised release and was ordered to pay $40,000 in restitution to the Fort Peck Tribe, $18,050 in restitution to the IRS, and a $200 special assessment.