State Dept to Renovate Kabul’s Pol-i-Charkhi (PIC) Prison. Again.

Posted: 2:52 am EDT


The State Department has issued a Pre-Solicitation Notice of the Government’s intent to issue a solicitation for the renovation of Pol-i-Charkhi (PIC) Prison in Kabul, Afghanistan.  The project includes renovations in Blocks 1, 2 & 3 and extensive infrastructure and satellite structure improvements to the facility.  Actual solicitation documents are only accessible using the restricted portion of, so we have not been able to read the details of this renovation.

This is, however, the same prison which is the subject of an October 2014 SIGAR report, Pol-i-Charkhi Prison: After 5 Years and $18.5 Million, Renovation Project Remains Incomplete (pdf) This is Afghanistan’s largest correctional facility, funded in its initial construction by the Soviet Union in 1973.  It is designed for approximately 5,000 prisoners but housed nearly 7,400 during SIGAR’s inspection last year. Extract below from the SIGAR report:

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  • In June 2009, in response to damage caused by 35 years of neglect, Soviet occupation, and warfare, the Department of State’s Regional Procurement Support Office (RPSO) awarded an INL-funded renovation contract to W (AWCC)—an Afghan firm—for $16.1 million. Following two modifications, the contract’s overall value increased to $20.2 million.
  • In November 2010, the RPSO terminated AWCC’s INL-funded renovation contract at the government’s convenience based on unsatisfactory performance.4 Following contract termination, INL awarded Batoor Construction Company—an Afghan company—a $250,000 contract to document AWCC’s work completed under the renovation contract.
  • More than 5 years after work began, renovation of Pol-i-Charkhi prison has not been completed, and the contract has been terminated for convenience. Following the RPSO’s termination of the INL-funded contract in November 2010, Batoor Construction Company reviewed and documented AWCC’s work completed under the renovation contract. In March 2011, Batoor reported that AWCC completed approximately 50 percent of the required renovation work. Batoor’s report also noted multiple instances of defective workmanship including the lack of backfilling of trenches, not repairing/replacing broken fixtures, lack of proper roof flashing and gutters, and soil settlement issues. For example, the report noted that there were no metal flashing or gutters installed on one of the prison blocks resulting in damage to surface paint and moisture penetration in supporting walls.
  • We conducted our prison inspection on April 19, 2014, but were limited by the fact that the renovation work had been completed more than 3 years prior to our site visit. We found that the prison holding areas had been reconfigured into maximum, medium, and minimum security cells, and the cells contained the required sinks and toilets. Our inspection of the renovated industries building and kitchen facilities did not disclose any major deficiencies. We also found that AWCC procured and installed the six back-up power diesel generators, as required by the contract. However, the generators cannot be used because they were not hooked-up to the prison’s electric power grid before the renovation contract was terminated. INL officials told us that the work necessary to make the generators operational—primarily installing paired transformers—will be done under the planned follow-on renovation contract, which they hope to begin in late 2014 or early 2015.
  • INL officials told us they anticipated an award of a follow-on contract by the spring of 2015 to complete the renovation work initiated in 2009 and a separate contract to construct a wastewater treatment plant. They estimated the renovation work would cost $11 million; the wastewater treatment plant, $5 million.
  • On November 5, 2010, the contracting officer issued a Stop Work Order which noted that AWCC’s performance was deemed unsatisfactory due to its lack of progress on the project, labor unrest at the work site, and a lack of supplies to maintain efficient progress. Then, on November 26, 2012, the RPSO contracting officer issued AWCC a termination for convenience letter.
  • After a 2-year negotiation that concluded in December 2012, RPSO agreed to an $18.5 million settlement with AWCC—92 percent of the $20.2 million contract value. RPSO agreed to the settlement despite INL and Batoor reports showing that AWCC only completed about 50 percent of the work required under the contract. The contracting officer who negotiated the settlement for the U.S. government told us that the final award amount reflected actual incurred costs and not any specific completion rate. The contracting officer noted that an RPSO contract specialist and an Afghan COR10 assisted her in lengthy negotiations with AWCC and joined her for the final round of discussions in Istanbul, Turkey, which concluded with the signed settlement agreement.
  • Although the contracting officer was able to execute some oversight and issue clear warnings to AWCC regarding its performance, INL’s oversight efforts were compromised by a U.S. employee who served as the COR for the AWCC renovation contract as well as the Basirat design and project monitoring contract. The COR served in this capacity until May 2010, when he was suspended after INL and State’s Office of Inspector General found that he had accepted money from Basirat to promote the company’s interests. The COR was convicted and sentenced by a U.S. District Court for accepting illegal gratuities from Basirat.9 As a result, in August 2010, State suspended Basirat from receiving any government contracts. In August 2010, State also suspended AWCC from receiving government contracts based on receiving confidential proposal information from Basirat concerning State solicitations.
  • The contracting officer added that during these final negotiations the COR [contracting officer’s representative] concurred with many of the contractor’s assertions. In June 2013, just 6 months later, the COR’s designation was suspended amid concerns that he may have colluded with another INL contractor, an issue discussed in our May 2014 inspection report on Baghlan prison.11 As noted in that report, INL suspected this COR of enabling a contractor to substitute inferior products and materials, failing to discover substandard construction, approving questionable invoices, and certifying that all contract terms had been met at the time of project turnover to INL even though construction deficiencies remained. The COR resigned in August 2013. SIGAR investigators are currently conducting an inquiry to determine whether the contractor or other U.S. government officials were complicit in these alleged activities.

So  —  the previous contractor collected an $18.5 million settlement,  92 percent of the $20.2 million contract? But it only did 50 percent of the work required under the contract? Maybe we should all move to Kabul and be contractors?

And now, there will be a new $16M contract?  Which will have modifications, of course, and will not really top off at $16M.


Related items:

Here’s what it looks like in Afghanistan’s largest — and still incomplete — prison (WaPo)

America’s Unfinished Prison in Afghanistan Is a Filthy Nightmare (Medium)



Congressional Drama Features Ex-Clinton IT Staffer Bryan Pagliano, Good Excuse to Check Your PLI Coverage

Posted: 5:27 am EDT
Updated: 3:03 pm EDT


Bryan Pagliano worked on Hillary Clinton’s 2008 presidential campaign and reportedly helped manage her server at that time. When Clinton became secretary of state in 2009, Pagliano got a job at the State Department.  This report citing public federal records says that he was classified as a GS-15 in his job as a special advisor and deputy chief information officer at the State Department. He earned around $140,000 per year from 2010-2012.  He was also reportedly paid personally by the Clintons to continue managing the private server from 2009 to 2013.

The State Department confirmed on September 3, that Mr. Pagliano was employed by the State Department from May 2009 through February 2013 as an IT specialist, and that he currently serves as a contractor working in the Bureau of Information Resource Management (State/IRM). The State Department also said that it was not consulted on Mr. Pagliano’s decision to take the 5th.   “He has pleaded the Fifth, so to speak. It’s certainly not an admission of guilt, as we all know, but it’s his constitutional right, so we respect that,” the official spokesperson said.

That’s not the end of it, of course. The House Select Committee on Benghazi is reportedly requiring Mr. Pagliano’s presence, which prompted a stern letter Wednesday from Pagliano’s lawyer, who accused the panel and its chairman, Rep. Trey Gowdy (R-S.C.), of engaging in political theater and abusing its subpoena power, according to the Washington Post. Politico also has a report today noting that Pagliano’s lawyer, Mark MacDougall has said in a letter to two congressional panels that he did not ask any Congressional committees for immunity, but “in the event that any committee of the Congress” does authorize such a judicial order, “Mr. Pagliano will, of course, comply with such an order.”

Even if you’re in no danger of getting snared in the Clinton controversies, isn’t this case a good reminder to review one’s Professional Liability Insurance coverage? PLI covers not just admin and disciplinary matters, but also congressional and OIG investigations. For eligible employees, the State Department regulations allow the reimbursement of up to 50% of PLI cost (see 3 FAM 3840 – pdf).













OPM Spends $133 Million on Credit Monitoring, Still No Credit Freeze

Posted: 12:34 am PDT


On September 1, OPM announced the $133M contract for identity thief protection and credit monitoring services for the 21.5 million individuals affected by the massive OPM breach that includes security clearance data. Our go-to expert on this says that “perhaps the agency should be offering the option to pay for the cost that victims may incur in “freezing” their credit files, a much more effective way of preventing identity theft.” Excerpt from Krebs on Security:

The only step that will reliably block identity thieves from accessing your credit file — and therefore applying for new loans, credit cards and otherwise ruining your good name — is freezing your credit file with the major credit bureaus. This freeze process — described in detail in the primer, How I Learned to Stop Worrying and Embrace the Security Freeze — can be done online or over the phone. Each bureau will give the consumer a unique personal identification number (PIN) that the consumer will need to provide in the event that he needs to apply for new credit in the future.

Here is part of the OPM announcement:

The U.S. Office of Personnel Management (OPM) and the U.S. Department of Defense (DoD) today announced the award of a $133,263,550 contract to Identity Theft Guard Solutions LLC, doing business as ID Experts, for identity theft protection services for 21.5 million individuals whose personal information was stolen in one of the largest cybercrimes ever carried out against the United States Government. These services will be provided at no cost to the victims whose sensitive information, including Social Security numbers, were compromised in the cyber incident involving background investigations.

“We remain fully committed to assisting the victims of these serious cybercrimes and to taking every step possible to prevent the theft of sensitive data in the future,” said Beth Cobert, Acting Director of the Office of Personnel Management. “Millions of individuals, through no fault of their own, had their personal information stolen and we’re committed to standing by them, supporting them, and protecting them against further victimization. And as someone whose own information was stolen, I completely understand the concern and frustration people are feeling.”

ID Experts will provide all impacted individuals and their dependent minor children (under the age of 18 as of July 1, 2015) with credit monitoring, identity monitoring, identity theft insurance, and identity restoration services for a period of three years. This task order was awarded under GSA’s Blanket Purchase Agreements (BPA) for Identity Monitoring, Data Breach Response and Protection Services which GSA awarded today.

The U.S. Government, through the Department of Defense, will notify those impacted beginning later this month and continue over the next several weeks. Notifications will be sent directly to impacted individuals.






Heard that? Crickets.


State Dept Honors Six Security Contractors Killed in 2014 Camp Gibson-Kabul Suicide Attack

Posted: 3:11  am EDT


On August 3, the State Department held a ceremony honoring six security personnel who were killed while working for DynCorp International on behalf of the Bureau of International Narcotics and Law Enforcement Affairs (INL) in Afghanistan.

All six honorees were security guards at Camp Gibson in Kabul and were killed on July 22, 2014, when a suicide bomber riding a motorcycle attacked the camp.  They hailed from four different countries – Fiji, India, Kenya, and Nepal.  Deputy Secretary Heather Higginbottom and INL Assistant Secretary William R. Brownfield will pay tribute to our fallen colleagues by laying a wreath at the INL Memorial Wall located within the State Department building at its 21st Street Entrance.

There are 93 names on the wall commemorating the individuals from 12 countries and the United States who lost their lives between 1989 and 2014 while supporting the Department’s criminal justice assistance programs abroad.  These individuals collaborated with host governments and civil society in challenging environments to enhance respect for rule of law around the world.  The Department is proud to recognize their service and sacrifice to our nation.

A virtual INL Memorial Wall is available at to pay tribute to the 93 honorees and their families.



The State Department announcement does not include the names of those honored at the INL ceremony. The New Indian Express identified the two Indian nationals as P V Kuttappan and Raveendran Parambath, as well as the two Nepali security guards as Ganga Limbu and Anil Gurung.  The security guards from Fiji and Kenya were not identified.


Bureau Tasks With Countering Violent Extremism: 96 Authorized Employees, Running on 17-23% Vacancies

Posted: 12:28  am EDT

Via GAO:

Terrorism and violent extremism continue to pose a global threat, and combating them remains a top priority for the U.S. government. State leads and coordinates U.S. efforts to counter terrorism abroad. State’s Office of the Coordinator for Counterterrorism was elevated to bureau status in 2012 with the aim of enhancing State’s ability to counter violent extremism, build partner counterterrorism capacity, and improve coordination. GAO was asked to review the effects of this change and the new bureau’s efforts.

While the bureau has undertaken efforts to assess its progress, it has not yet evaluated its priority Countering Violent Extremism (CVE) program and has not established time frames for addressing recommendations from program evaluations. Specifically, the bureau established indicators and targets for its foreign assistance–related goals and reported results achieved toward each indicator. The bureau has also completed four evaluations covering three of its six programs that resulted in 60 recommendations. The bureau reported having implemented about half of the recommendations (28 of 60) as of June 2015 but has not established time frames for addressing the remaining recommendations. Without specific time frames, it will be difficult for the bureau to ensure timely implementation of programmatic improvements. In addition, despite identifying its CVE program as a priority and acknowledging the benefit of evaluating it, the bureau has postponed evaluating it each fiscal year since 2012.

image from

image from

The bureau’s number of authorized FTEs grew from 66 in fiscal year 2011 to 96 in fiscal year 2015, which is an increase of more than 45 percent. Figure 6 shows the number of authorized FTEs within the bureau for fiscal years 2011 to 2015, along with the number of FTE positions that were filled. While the bureau’s current authorized level of FTEs for fiscal year 2015 is 96 positions, it had 22 vacancies as of October 31, 2014. The percentage of vacancies in the bureau has ranged from 17 percent to 23 percent in fiscal years 2011 to 2015. According to the CT Bureau, these vacancies have included both staff-level and management positions.

In addition to the authorized FTEs, the CT Bureau also has non-FTE positions, which include contractors; interns; fellows; detailees; and “When Actually Employed,” the designation applied to retired State employees rehired under temporary part-time appointments. For fiscal years 2013, 2014, and 2015, respectively, the CT Bureau had 92, 78, and 69 such positions, in addition to its authorized FTEs, according to the CT Bureau.


Related item:

State Should Evaluate Its Countering Violent Extremism Program and Set Time Frames for Addressing Evaluation Recommendations | GAO-15-684 | pdf


OPM Hit By Class Action Lawsuit, and Those Phishing Scams You Feared Over #OPMHack Are Real (Corrected)

Posted: 7:16 pm  EDT


The largest federal employee union, the American Federation of Government Employees, filed a class action lawsuit today against the Office of Personnel Management, its director, Katherine Archuleta, its chief information officer, Donna Seymour and Keypoint Government Solutions, an OPM contractor.


A couple of weeks ago, we thought that the “recipe” from the OPM email notification sent to potentially affected employees via email might be copied by online scammers.



Today, the United States Computer Emergency Readiness Team (US-CERT), part of part of DHS’ National Cybersecurity and Communications Integration Center (NCCIC) issued an alert on phishing campaigns masquerading as emails from the Office of Personnel Management (OPM) or the identity protection firm CSID.


Social Media Security Screening Is Here: OPM to Make Sole Source Award For Use in Background Investigation

Posted: 1:01 am  PDT


Last September, Mike Kelly, the Republican Representative for Pennsylvania’s 3rd congressional district introduced the Enhanced Security Clearance Act of 2014 (HR 5482) aimed at the implementation of enhanced personnel security programs which requires agency programs to “integrate information from government, publicly available, and commercial data sources, consumer reporting agencies, and social media.”

Mr. Kelly told ZDNet, “In particular, the bill will update government background checks to include an applicants’ publicly available electronic data including social media accounts such as Facebook and Twitter.” This bill was introduced on September 16, 2014, in a previous session of Congress, but was not enacted.

Well, the bill may have died but it was only a matter of time before social media content becomes part of the federal background investigation.

The Federal Investigative Services (OPM-FIS) provides investigative products and services for over 100 Federal agencies to use as the basis for suitability and security clearance determinations. OPM provides over 90% of the Government’s background investigations, conducting over two million investigations a year.

On June 17, the Office of Personnel Management, Federal Investigative Service (FIS), PIC Acquisitions Team, published a “Notice of Intent to Sole Source – PAEI Reports” to Social Intelligence, a company headquartered in California.  Social media content is now officially called Publicly Available Electronic Information (PAEI). If we’re reading this correctly, it looks like there already are pilot projects with the same company conducted with the U.S. Army, the Office of Director of National Intelligence (ODNI), the Department of State and the National Reconnaissance Office.

Below is the published notice via fedbiz:

It is the intention of the agency to award a firm-fixed price agreement to Social Intelligence for publicly available electronic information (PAEI) reports. This is not a solicitation for quotations, but rather a notice of the agency’s intent to make a sole source award to Social Intelligence.

The U.S. Office of Personnel Management (OPM) Federal Investigative Services (FIS) seeks to award a firm-fixed price agreement to Social Intelligence who will conduct searches of multiple sources of PAEI in an automated manner and provide complete, accurate, standardized reports to OPM-FIS when searches result in information pertinent to Subjects of Investigation.

OPM-FIS is participating in a set of pilot projects with other federal investigative service providers to evaluate the use of PAEI in the background investigative process. This acquisition will provide 400 PAEI reports over a period of approximately 6-9 months for a sample population of investigations to assess the OPM-FIS operational end-to-end process and relevancy to the investigation along with the effects of quality, costs and timeliness. The vendor must also provide high level training on how to review and analyze the PAEI reports and also provide customer and technical support 24×7 until 400 PAEI reports have been provided to OPM-FIS.

Social Intelligence is the only source that possesses knowledge and expertise obtained through participation in other high level government PAEI pilot projects, to include pilots with the U.S. Army, the Office of Director of National Intelligence (ODNI), the Department of State and the National Reconnaissance Office. Social Intelligence is the only one available whose product will result in a consistent and accurate comparative analysis between results of the OPM-FIS pilot and other government agencies’ pilots. This vendor’s personnel have experience with and have received training on the personnel security process and the thirteen adjudicative guidelines due to participation in previous government pilots. Such experience is required in order to appropriately identify issues containing relevant adjudicative information. Only data that meets the adjudicative guidelines will be collected and retained by OPM-FIS.

This vendor was deemed a consumer reporting agency (CRA) by the Federal Trade Commission, as defined by the Fair Credit Reporting Act. As of January 2013, the vendor was the only social media background screening company designated as a CRA. This designation is important as the FTC has ruled that CRAs must take reasonable steps to ensure the maximum possible accuracy of the information reported from social media sites. All of the above make Social Intelligence a unique source that would provide the best solution with the least risk to the government for this pilot.

According to its website, Social Intelligence ( “provides social media data, tools, and reports to commercial and Government organizations. Headquartered in Santa Barbara, Calif., the company has developed a unique suite of products including employment background screenings, insurance claims investigations, corporate due diligence, and Government services. … Social Intelligence was created to provide companies and governmental organizations publicly available online information, while ensuring this data is used appropriately and legally.” It provides the following services:

  • Social Intelligence’s Social Monitoring & Evaluation solutions provide a powerful and cost-effective way to monitor and evaluate an individual’s ongoing online activity across the deep web.
  • Social Intelligence’s groundbreaking research into online identity science and its implications allows companies to confidently rely on social media and internet data. A fully automated capability, Social Intelligence’s proven, proprietary Identity Resolution algorithm identifies, matches, and scores aggregated publicly available online information, the first of multiple steps to solidify data veracity.

On it’s website, the company talks about “the opportunity at hand”  — apparently 64 million people are unscorable by traditional credit scores and 55% of millennials are willing to share their data in exchange for discounts.


Burn Bag: If a T-wall tips over in Baghdad but there’s no media around to hear it, will it make a sound?

Posted: 10:31 am EDT

Via Burn Bag:

“If a T-wall tips over in Baghdad but there’s no media around to hear it, will it make a sound?  What if it crushes a local national contractor working on a USG facility— will anyone mention the man’s death, or can we expect radio silence as usual?  It’s becoming clear that no one back home really cares about what’s going on over here….it’s like 2004 all over again.”

U.S. Soldiers of Headquarters and Headquarters Company, Brigade Special Troops Battalion, 3rd Brigade Combat Team, 82nd Airborne Division, guide a concrete barrier into a new position at Joint Security Station Loyalty, eastern Baghdad, Iraq, on May 17, 2009

U.S. Soldiers of Headquarters and Headquarters Company, Brigade Special Troops Battalion, 3rd Brigade Combat Team, 82nd Airborne Division, guide a concrete barrier into a new position at Joint Security Station Loyalty, eastern Baghdad, Iraq, on May 17, 2009. Photo by Staff Sgt. James Selesnick

Note: “T-Walls” or Texas barriers can reached upwards of 12 to 18 feet in height. Some of the tallest reach 24 feet. According to, t-walls of the larger variety became symbols of life in Iraq although several variations of shapes and sizes also abound around Iraq.  Read more here.


Conspired to Defraud Uncle Sam? Be Very Afraid. We’re Gonna Put You in Home Confinement!

Posted: 9:40 am EDT


Remember the USAID nonprofit contractor IRD? (See Dear USAID OIG — That Nonprofit Contractor Mess Really Needs a Fact Sheet). Well, here’s another one.  This is a case where the CEO of a major USAID contractor gets feather-slapped by the court.

A 2011 ranking of private USAID partners by lists LBG as the third largest USAID private-sector partner that has contracted some of the government’s largest post-conflict redevelopment projects in Iraq and Afghanistan. According to Bloomberg, Louis Berger International, a unit of Louis Berger Group, got about $736 million to modernize a power system and rehabilitate the Kajakai Dam in Afghanistan.  Whoa! We thought that dam only cost $305.5 million! Plus cost of fuel that  US taxpayers also had to shoulder.

What is missing from this announcement? How much was the total contracts that LBG received in the last 20 years? Who’s paying the independent monitor? And for heaven’s sake, what lessons are we sending to other reconstruction capitalists doing awesome work for love of god and country?


The former president, chief executive officer, and chairman of the board of a New Jersey-based international engineering consulting company was sentenced today to 12 months of home confinement and fined $4.5 million for conspiring to defraud the U.S. Agency for International Development (USAID) with respect to billions of dollars in contracts over a nearly 20-year period, U.S. Attorney Paul J. Fishman announced.

Derish Wolff, 79, of Bernardsville, New Jersey, previously pleaded guilty before U.S. District Judge Anne E. Thompson to a superseding information charging conspiracy to defraud the government with respect to claims. Judge Thompson imposed the sentence today in Trenton federal court.

According to documents filed in this case and statements made in court:

Wolff, the former president and CEO of Morristown, New Jersey-based Louis Berger Group Inc. (LBG), and the former chairman of LBG’s parent company, Berger Group Holdings Inc. (BGH), led a conspiracy to defraud USAID by billing the agency on so-called “cost-reimbursable” contracts – including hundreds of millions of dollars of contracts for reconstructive work in Iraq and Afghanistan – for LBG’s overhead and other indirect costs at falsely inflated rates.

USAID, an independent federal government agency that advances U.S. foreign policy by supporting economic growth, agriculture, trade, global health, democracy, and humanitarian assistance in developing countries, including countries destabilized by violent conflict, awarded LBG hundreds of millions of dollars in reconstruction contracts in Iraq and Afghanistan as well as in other nations. LBG calculated certain overhead rates and charged USAID and other federal agencies these rates on cost-reimbursable contracts, which enabled LBG to pass on their overhead costs to the agency in general proportion to how much labor LBG devoted to the government contracts.

From at least 1990 through July 2009, LBG, through Wolff and other former executives, intentionally overbilled USAID in connection with these cost-reimbursable contracts. The scheme to defraud the government was carried out by numerous LBG employees at the direction of Wolff.

Wolff targeted a particular overhead rate, irrespective of what the actual rate was, and ordered his subordinates to achieve that target rate through a variety of fraudulent means. From at least as early as 1990 through 2000, Wolff ordered LBG’s assistant controller to instruct the accounting department to pad its time sheets with hours ostensibly devoted to federal government projects when it had not actually worked on such projects.

At an LBG annual meeting in September 2001, Salvatore Pepe, who was then the controller and eventually became chief financial officer (CFO), presented a USAID overhead rate that was significantly below Wolff’s target. In response, Wolff denounced Pepe, called him an “assassin” of the overhead rate and ordered him to target a rate above 140 percent, meaning that for every dollar of labor devoted to a USAID contract, LBG would receive an additional $1.40 in overhead expenses supposedly incurred by LBG.

In response, Pepe and former controller Precy Pellettieri, with Wolff’s supervision, hatched a fraudulent scheme from 2003 through 2007 to systematically reclassify the work hours of LBG’s corporate employees, including high-ranking executives and employees in the general accounting division, to make it appear as if those employees worked on federal projects when they did not. At his plea hearing on Dec. 12, 2014, Wolff admitted that Pepe and Pellettieri, at Wolff’s direction, reclassified these hours without the employees’ knowledge and without investigating whether the employees had correctly accounted for their time, and at times did so over an employee’s objection.

In addition to padding employees’ work hours with fake hours supposedly devoted to USAID work, Wolff instructed his subordinates to charge all commonly shared overhead expenses, such as rent, at LBG’s Washington, D.C., office to an account created to capture USAID-related expenses, even though the D.C. office supported many projects unrelated to USAID or other federal government agencies.

On Nov. 5, 2010, Pepe and Pellettieri both pleaded guilty before then-U.S. Magistrate Judge Patty Shwartz to separate informations charging them with conspiring to defraud the government with respect to claims. Also on that date, LBG resolved criminal and civil fraud charges related to Wolff’s and others’ conduct. The components of the settlement included:

  • a Deferred Prosecution Agreement (DPA), pursuant to which the U.S. Attorney’s Office in New Jersey suspended prosecution of a criminal complaint charging LBG with a violation of the Major Fraud Statute; in exchange, LBG agreed, among other things, to pay $18.7 million in related criminal penalties; make full restitution to USAID; adopt effective standards of conduct, internal controls systems, and ethics training programs for employees; and employ an independent monitor who would evaluate and oversee the company’s compliance with the DPA for a two-year period;
  • a civil settlement that required the company to pay the government $50.6 million to resolve allegations that LBG violated the False Claims Act by charging inflated overhead rates that were used for invoicing on government contracts; and an administrative agreement between LBG and USAID, which was the primary victim of the fraudulent scheme.

In the settlement, the government took into consideration LBG’s cooperation with the investigation and the fact that those responsible for the wrongdoing were no longer associated with the company.

Click here for the original announcement (pdf).


Related posts:

Related items:

U.S. Passport Agency Contractor, Two Others Indicted for Alleged Use of Stolen Passport Information

Posted: 3:57 pm  PDT


A Grand Jury in the Southern District of Texas indicted three women charged with nine counts of wire fraud, conspiracy to commit wire fraud and aggravated identity theft in connection with the alleged use of U.S. passport information in Houston.  One of the women has been identified by media reports as a contractor working for the State Department. Both the AP and local news say that the Houston and Atlanta passport offices were targeted.

Beginning on or about the year 2010 until on or about March 2, 2015, in the Houston Division of Southern District of Texas and elsewhere,


defendants herein, did knowingly combine, conspire, confederate, and agree with others known and unknown to the Grand Jury to devise and intend to devise a scheme and artifice to defraud and to obtain money and property by means of false and fraudulent pretenses, representations, and promises, and in execution of said scheme and artifice, transmit or cause to be transmitted by means of wire in interstate commerce, writings, signs, signals, pictures and sounds for the purpose of executing said scheme or artifice to defraud in Violation of Title 18, United States Code, Section 1343.

According to charging documents, the accused were alleged to have done the following: 1) obtain personal identifying information (PII) of others from the Department of State, Passport Administration; 2) transmit the stolen PII to and from each other, 3) use the stolen PII to create counterfeit identification documents, 4) recruit accomplices to assume the stolen identities and use the counterfeit documents to obtain commercial lines of credit and to purchase iPhones, iPads, and other electronic merchandise, 5) cause commercial entities to transmit the stolen PII to assist in the establishment of commercial lines of credit.

An AP report citing authorities identifies McClendon as the contract employee for the State Department passport office.  A quick social media search indicates that the accused is a Senior Customer Service Tech for a federal contractor.

Initial appearance hearing for Chloe Alyse McClendon and Domonique Rashad Thomas was set for today, 5/7/2015 at 02:00 PM before Magistrate Judge Frances H. Stacy.  Prosecutors told the AP that Alicia Myles remains a fugitive but Click2Houston reports that all three appeared before the judge on Thursday afternoon and were released on bond. Clip below from

Click here if you are unable to view the embedded video.

The case is  USA v. McClendon et. al. criminal case #: 4:15-cr-00233-1.

This looks related to our recent post: Bringing Cellphones to Work Ends For Federal Employees in 22 Domestic Passport Offices.

In related news, the Passport Office will reportedly start banning cell phone usage for PPT in SA-17.  We’re told that the apparent hold up is due to storage facilities for cellphones outside the  workspace.  Our source says he/she  can’t see how they will let the rest of SA-17 bring cell phones in, since they look at the same PII information, like  passsport applications. Keep us posted.