USDOJ: FL Executives Plead Guilty to Large-Scale Visa Fraud Employment Scheme

 

Via USDOJ:

Two Florida business executives pleaded guilty today in the Southern District of Georgia to charges related to their roles in a scheme to recruit and hire foreign nationals who were not authorized to work in the United States to fill temporary housekeeping and food service positions and commit various other criminal immigration offenses for profit.

According to court documents, Educational World Inc. (Ed World), a visa processing company based in North Point; and Larisa Khariton, 73, and Jon Clark, 71, also of North Point, were indicted by a federal grand jury in Georgia on April 8. The 36-count indictment also contained allegations against Regal Hospitality Solutions LLC (RHS), a Louisiana-based staffing company, and seven current and former RHS employees. Each defendant was charged with one count of conspiracy to defraud and commit offenses against the United States, including encouraging and inducing an alien to reside in the United States, as well as alien harboring, alien transporting, and visa fraud. In addition, the RHS defendants were charged with wire-fraud related offenses.

Khariton and Clark pleaded guilty today to conspiracy to defraud and commit offenses against the United States.

According to the indictment and other court documents, the individual defendants enriched themselves by participating in a scheme to recruit and hire noncitizen laborers without authorization to work for RHS. RHS provided hospitality-related businesses with laborers to work in housekeeping, retail, and food service positions, using noncitizens who were unauthorized to work in the United States to fill the positions. In some cases, the RHS defendants arranged for and provided housing and transportation to the workers.

The defendants and other co-conspirators also encouraged and induced noncitizen laborers on expiring and expired J-1 exchange visitor visas to obtain B-2 tourist visas and to work in the United States for RHS, knowing that employing such laborers on B-2 visas was illegal. According to admissions made in connection with their guilty pleas, Khariton and Clark prepared and submitted applications for B-2 visas on behalf of the workers after charging noncitizen laborers approximately $650 per application. The application contained false and misleading statements indicating the noncitizens intended to obtain the B-2 visa for the purpose of engaging in tourism. In fact, Khariton and Clark knew that those noncitizens were already present in and intended to stay in the United States for employment, not tourism.

The indictment also alleges that Khariton and Clark submitted petitions for H-2B temporary work visas on behalf of defendant RHS that contained false and misleading information about the location where noncitizen laborers allegedly were to be employed. In connection with their guilty pleas, Khariton and Clark admitted that they engaged in deceitful and dishonest conduct to impede and obstruct the functioning of, among other things, the H-2 non-immigrant visa program. Khariton and Clark also admitted that they were paid a commission by RHS for noncitizens Ed World recruited to work for RHS, including those who were not authorized to work for RHS in the United States.

Khariton and Clark will be sentenced at a later date. Khariton and Clark face a statutory maximum penalty of five years in prison; A federal district court judge will determine the sentences after considering the U.S. Sentencing Guidelines and other statutory factors. Charges remain pending against defendant RHS and the individual RHS defendants who are considered innocent unless and until found guilty

The U.S. Department of State Office of Inspector General is investigating the case with assistance provided by U.S. Immigration and Customs Enforcement’s Homeland Security Investigations and U.S. Citizenship and Immigration Services.

Trial Attorneys Frank Rangoussis and John-Alex Romano of the Criminal Division’s Human Rights and Special Prosecutions Section and Assistant U.S. Attorney Steven Lee of the Southern District of Georgia are prosecuting the case.

 

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Former @StateDept Employee Pleads Guilty To Honest Services Fraud Scheme

 

This is a follow-up to the June 2, 2021 post we did — SDNY Charges @StateDept Contractor in Multimillion-Dollar Fraud Schemes, Then There’s “Insider-1” at OBO.

On September 20, 2021, the Justice Department announced that May Salehi, a former State Department employee, pled guilty today to conspiracy to commit honest services fraud.  See U.S. v. May Salehi.
Below is the USDOJ announcement: Former State Department Employee Pleads Guilty To Honest Services Fraud Scheme

May Salehi Provided Confidential Bidding Information to a Bidder and Received Lucrative Kickback Payments in Return

Audrey Strauss, the United States Attorney for the Southern District of New York, Michael Speckhardt, the Special Agent in Charge of the U.S. Department of State, Office of Inspector General (“State Department OIG”), and Thomas Fattorusso, Acting Special Agent in Charge of the Internal Revenue Service, Criminal Investigation, New York Field Office (“IRS-CI”), announced that MAY SALEHI, a former State Department employee, pled guilty today to conspiracy to commit honest services fraud.  SALEHI was a longtime State Department employee who was involved in evaluating bids for critical overseas government construction projects such as U.S. embassies and consulates.  SALEHI gave confidential inside bidding information to a bidder, and received $60,000 in kickback payments in return.  SALEHI surrendered today and pled guilty before United States Magistrate Judge James L. Cott.  SALEHI’s case is assigned to United States District Judge P. Kevin Castel.

Manhattan U.S. Attorney Audrey Strauss said: “As a State Department employee, May Salehi was entrusted to serve the public.  Instead, she abused her position of trust to line her own pockets, as she admitted today.  Salehi revealed, and traded on, confidential information – corrupting the bidding process and receiving lucrative kickbacks in return.  Together with our law enforcement partners, this Office is committed to rooting out corruption.”

State Department OIG Special Agent in Charge Michael Speckhardt said: “The State Department OIG is dedicated to preserving the integrity of the Department’s programs and processes.  As government employees, we are entrusted to carry out our responsibilities with integrity and support an equitable process.  May Salehi did just the opposite.  She used her position of public trust to selfishly obtain a personal financial advantage by selling proprietary contracting information for profit.  Today’s plea, the culmination of extensive investigative and prosecutorial efforts, demonstrates that those who violate the public’s trust will be held accountable for their actions.”

IRS-CI Acting Special Agent in Charge Thomas Fattorusso said: “May Salehi violated the trust of the American taxpayer by putting her personal financial gain over her responsibilities to safeguard confidential information and government resources. Today’s guilty plea shows IRS-Criminal Investigation will continually work with our law enforcement partners to protect the American taxpayer from this type of abuse.”

According to the allegations in the Information, court filings, and statements made in court:

From 1991 until mid-2021, MAY SALEHI was a State Department employee.  For many years, SALEHI worked as an engineer in the State Department’s Overseas Building Operations division (“OBO”), which directs the worldwide overseas building program for the State Department and the U.S. Government community serving abroad.

In 2016, the State Department solicited bids for a multimillion-dollar construction project known as a compound security upgrade to be performed at the U.S. Consulate in Bermuda (the “Bermuda Project”).  The bidding process involved the submission of blind, sealed bids from various bidders.  Six companies submitted sealed bids, one of which was named Montage, Inc. (“Montage”).

SALEHI was involved in the Bermuda Project in several respects.  Among other things, SALEHI served as the Chair of the Technical Evaluation Panel (“TEP”) – a panel of experts that evaluates the technical aspects of bids, including whether they meet the State Department’s structural and security needs.  In connection with the Bermuda Project, the TEP disqualified one bidder, but determined that the other five bids (including Montage’s bid) were technically acceptable.

In September 2016, the State Department’s employees who evaluate the cost of bids gave the remaining five bidders (including Montage) the opportunity to re-bid, if they wished to do so.  Montage had two days to decide whether to submit a re-bid.  During that two-day window, Montage’s principal, Sina Moayedi, spoke with SALEHI by phone and sought confidential inside bidding information about the relationship between Montage’s bid and those of its competitors, which SALEHI supplied.  SALEHI knew that this information was confidential, and that it was unlawful to provide it to a prospective bidder.  After Moayedi received this inside information from SALEHI, Montage immediately increased its bid by $917,820.  In its revised submission to the State Department, Moayedi and Montage lied as to the reason it had increased its bid by nearly $1 million, falsely claiming that it had discovered “an arithmetic error” in its estimates.  Montage was ultimately awarded the Bermuda Project with a revised bid of $6.3 million.

In the months that followed, Moayedi paid SALEHI a total of $60,000 in kickbacks, which he paid in three installments.  In making these kickback payments, Moayedi used intermediaries to obscure the link between him and SALEHI.  To conceal the true purpose of the kickback payments, SALEHI also gave one of the intermediaries a Persian rug.  SALEHI did not report the $60,000 kickback payments on her State Department financial disclosure form.

* * *

SALEHI, 66, of Washington, D.C., pled guilty to one count of conspiracy to commit honest services fraud, which carries a maximum sentence of five years in prison.  The maximum potential sentence in this case is prescribed by Congress and is provided here for informational purposes only, as SALEHI’s sentence will be determined by Judge Castel.

Sina Moayedi was arrested on May 28, 2021, on three charges contained in a criminal Complaint: wire fraud, conspiracy to commit wire fraud, and bribery of a public official.  The charges against Moayedi are pending.

Ms. Strauss praised the outstanding investigative work of the State Department OIG, Special Agents from the United States Attorney’s Office for the Southern District of New York, and IRS‑CI.  She also thanked Special Agents from the United States Attorney’s Office for the District of Columbia and the Montgomery County, Maryland, Police Department.

The Office’s Complex Frauds and Cybercrime Unit is handling this criminal case.  Assistant U.S. Attorneys Michael D. Neff and Louis A. Pellegrino are in charge of the prosecution.

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State/OIG Audits CA’s Official and Diplomatic Passport Records

 

 

Via State/OIG:
(U) Treasury Inspector General for Tax Administration Concerns

(U) In September 2020, OIG received a referral from the Treasury Inspector General for Tax Administration (TIGTA). According to the referral, in 2019, during an audit of the Internal Revenue Service’s (IRS) passport management and security controls,19 TIGTA requested from CA information associated with diplomatic and official passports issued to IRS employees and appointees for the last 20 years, as of March 31, 2019. Specifically, for each passport issued, TIGTA requested the applicant’s name, passport number, passport type, issuance date, and passport status (e.g., cancelled, lost, or stolen).

(U) According to TIGTA officials, TIGTA received three separate passport datasets from CA. However, TIGTA found that the data provided in each dataset were incomplete. For example, some passport records had blank issuance and expiration date fields. Furthermore, the data identified onlyfive passports that were issued in 2016 and indicated that no passports were issued to IRS employees from 2017 through 2019. However, IRS records indicated that more than 200 official or diplomatic passports were issued to employees between 2016 and 2019. Lastly, one dataset included only Department of Treasury employees and not IRS employees. According to TIGTA officials, CA officials could not explain why the database was providing incomplete data. Based on the missing records and data fields, TIGTA deemed CA’s information as unreliable for use in its audit.
[…]
(U) In response to TIGTA’s concerns about receiving incomplete data from CA, OIG reviewed the  847,880 official and diplomatic passport records provided to OIG by CA and found that none of  the passport records had blank issuance or expiration date fields. Furthermore, the records  showed that CA issued 652 official and diplomatic passports to IRS employees and their family  members from FY 2017 through FY 2019 as opposed to the data provided to TIGTA, which showed that no passports were issued to IRS employees from FY 2017 through FY 2019.

The Special Issuance Agency (SIA) did not review the data!

(U) When asked about TIGTA’s concerns, CA officials stated that CA’s Office of Consular Systems and Technology ran a query in TDIS using sponsor codes28 that are associated with IRS to obtain the data requested by TIGTA. CA’s Office of Legal Affairs and Law Enforcement Liaison and the  Office of Passport Integrity and Internal Controls reviewed the data before the data were  released to TIGTA. SIA did not review the data. If SIA employees had reviewed the data, they  would have recognized that it was incomplete. SIA employees would know, because of  reimbursement data, the number of passports issued to IRS employees. CA officials also stated  that, although there are processes in place for reviewing and clearing data prior to release to Federal customers, there is not a formal written policy or standard operating procedures. CA officials are formalizing procedures to address this deficiency.

(U) CA officials indicated that requests for passport information from other agencies are infrequent—there have been none since TIGTA’s request in 2019. However, it is important that CA have effective internal control activities in place to ensure that quality data are provided to other Government agencies. Internal control is a process effected by an entity’s management that provides reasonable assurance that the objectives of an entity will be achieved.29 Management should establish control activities through policies and procedures to achieve objectives.30 Because CA had not implemented effective internal control activities to ensure that the data provided to TIGTA in response to its request were properly reviewed and validated, it failed to meet its objective of delivering a high level of customer service and earning customer trust, which consequently impacted TIGTA’s ability to conduct an audit of passport management and security at the IRS. Although OIG acknowledges that CA is developing internal control activities and associated procedures to help ensure that the incident with TIGTA is not repeated, OIG is making the following recommendation and will track its implementation through the audit compliance process to confirm that the identified deficiency has been fully addressed.

(U) Prior Office of Inspector General Reports

(U) During this audit, OIG was alerted that a former Department of State employee had  allegedly not surrendered their diplomatic passport upon separation from the Department.  Department employees’ entitlement to an official or diplomatic passport, in most instances,  ends when they separate from the Department, and the passport must be surrendered for  cancellation.

(U) OIG found that CA had not electronically cancelled one of the former employee’s diplomatic  passports. Based on that information, OIG performed additional steps to determine whether CA  had cancelled other diplomatic or official passports once an employee had separated from the  Department of State. OIG found that CA had not electronically cancelled 57 of 134 (43 percent)  passports tested.5 In addition, of these 57 passports, 47 (82 percent) had not expired as of  February 1, 2021, meaning they could still be valid. One reason for the deficiencies identified is  that bureaus and offices did not always maintain proper accountability of passports and could  not confirm whether separating employees had surrendered their passports for cancellation.  OIG made one recommendation that is intended to improve the accountability of official and  diplomatic passports of separating employees. As of June 2021, OIG considers the  recommendation resolved, pending further action.

State/OIG Reports to Congress: Investigations Into Mrs P’s Travels, Ambassadors, Senior Advisors, FSOs and More

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On June 1, 2021, State/OIG published online its Semiannual Report to the Congress (October 1, 2020 to March 31, 2021).
On  accountability and independence, the OIG reports:
“OIG did not encounter any attempts to interfere with Inspector General independence—whether through budgetary constraints designed to limit its capabilities, resistance or objection to oversight activities, or restrictions on or significant delays in access to information—for the reporting period from October 1, 2020, through March 31, 2021.
OIG encountered a three-month delay in scheduling an interview with Secretary Michael Pompeo as part of its review of allegations of misuse of Department resources. OIG initially requested an interview on September 11, 2020, but then-Secretary Pompeo did not agree to the interview (which was scheduled for December 23, 2020) until December 16, 2020.
During a mandated review of the Bureau of International Narcotics and Law Enforcement Affairs’ (INL) reporting related to National Drug Control Program activities, INL was not sufficiently responsive to OIG’s requests for information. At the conclusion of fieldwork, OIG determined that it could not complete its review because it did not have sufficient, appropriate evidence to be able to draw a conclusion about whether the Department’s management assertions in its Accounting and Authentication of FY 2020 Drug Control Funds and Related Performance Report were fairly stated.”
The Office of Evaluations and Special Projects (ESP):
“From October 1, 2020, to March 31, 2021, ESP issued one unclassified report on Department programs and operations. Management Assistance Report: Representational Travel by the Spouse of the Secretary of State (ESP-21-01, 12/2020) In 2019, OIG received a whistleblower complaint related to travel by the spouse of the Secretary of State that the Department considered official travel. To investigate this complaint, OIG requested and reviewed documentation related to official representational family travel by Susan Pompeo from April 2018 to April 2020. Generally, Department policy permits such travel by relatives of Department officials for appropriate representational purposes. However, both Department guidance and principles of internal control require documentation of both the official purpose and the approval of the travel. The Secretary’s spouse took eight trips that were declared official from April 2018 to April 2020. Of the eight trips, OIG found documentation of an authorized purpose for all eight trips, but only found written approval for two of the trips.
OIG recommended that the Office of the Secretary seek and gain written approval for all representational travel, and that the Under Secretary for Management or other authorizing official document in writing the approval for all representational trips by any family members. The Department concurred with these recommendations.”
ESP Substantiation of Allegations of Non-Criminal Misconduct Involving Senior Government Employees, 10/1/2020–3/31/2021
— A case closed in January 2021 involved a U.S. Ambassador. “OIG found that the official committed several violations of Department policy, including involving a household member in official duties, using personal social media accounts for official activities, and failing to comply with 3 FAM 1214.1 “Leadership and Management Principles for Department Employees” and “The Standards of Ethical Conduct for Employees of the Executive Branch,” issued by the U.S. Office of Government Ethics. OIG referred its findings to the Under Secretary for Political Affairs and the Bureau of African Affairs. Shortly after OIG issued its findings, the Ambassador left office as part of the presidential transition.”
— A case closed in March 2021 involved a USAGM Senior Advisor.  “OIG found that the official violated Federal recordkeeping regulations by instructing employees to communicate with her on official matters using a mobile messaging application and then deleting the messages without properly preserving them in agency recordkeeping systems. OIG referred its findings to USAGM, which reviewed the matter and notified the National Archives and Records Administration of the improper disposal of Federal records.”
The Office of Investigations conducts worldwide investigations of criminal, civil, and administrative misconduct related to programs and operations of the Department. During the reporting period, OIG conducted a number of investigations involving senior Government employees.
Investigations Involving Senior Government Employees Where Allegations Were Substantiated, 10/1/2020–3/31/2021
— On June 12, 2015, OIG opened an investigation based on information that a senior Administrative Officer and two of her subordinates violated procurement rules and regulations related to the use of U.S. Government purchase cards. The investigation substantiated the allegation and revealed the officer instructed her employees to engage in the practice of split purchasing. As there was no violation of criminal law, the case was not referred to DOJ. However, the officer resigned from the Department while under investigation. The case was closed in January 2021.
— On October 28, 2019, OIG opened an investigation based on information that the senior advisor to a U.S. Ambassador serving overseas may have received supplemental compensation from a private company while serving as a U.S. Government employee. The investigation revealed the advisor transmitted Sensitive But Unclassified information to non-U.S. Government personnel and received gifts of airfare and a gift card valued over $8,000 from a private business entity. As there was no violation of criminal law, the case was not referred to DOJ. However, the officer resigned from the Department while under investigation. The case was closed in February 2021.
— On May 29, 2019, OIG opened an investigation regarding multiple allegations of misconduct by a U.S. Ambassador. The investigation revealed the Ambassador inappropriately used his position to try to influence the move of a professional sporting event to a different venue. He also knowingly allowed his special assistant to conduct personal matters that fell outside of her scope of official duties, and while using non-Department email accounts, he did not courtesy copy or forward to his official Department email account at least 62 official emails in the span of approximately 6 months.As there was no violation of criminal law, the case was not referred to DOJ. However, the Ambassador resigned from the Department while under investigation. The case was closed in February 2021.
Under notable resolutions, State/OIG/INV’s list includes the following:
— In March 2021,  two Foreign Service Officers agreed to pay more than $13,033 to the U.S. Government to resolve issues related to fraud allegations regarding Department travel vouchers. OIG special agents determined that the married couple engaged in a scheme to defraud the Department by filing four travel vouchers that claimed lodging expenses they were not entitled to under Federal Travel Regulations. The fraud was committed from approximately September 2014 through April 2019. OIG’s Office of General Counsel coordinated the Program Fraud Civil Remedies Act action that resulted in the settlement.
–In October 2020, three individuals were indicted for using a business email compromise scheme, or BEC, to defraud the Department. OIG and Federal Bureau of Investigation (FBI) special agents determined the individuals tricked the Department and a nonprofit agency into wiring at least $575,000 into bank accounts they controlled for the purpose of enriching themselves and their co-conspirators.
Under employee misconduct:
— In November 2020, former Seabee Martin Huizar was sentenced to 109 months’ incarceration and ordered to pay $40,100 in fines and $10,000 in restitution, along with serving a 10-year term of supervised release, for transportation of images of child sexual abuse on his phones and tablet computer. The OIG Special Assistant United States Attorney assigned to the Eastern District of Virginia prosecuted the case.
 

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SDNY Charges @StateDept Contractor in Multimillion-Dollar Fraud Schemes, Then There’s “Insider-1” at OBO

13 Going on 14 — GFM: https://gofund.me/32671a27

 

On May 28, 2021, USDOJ/Southern District of New York announced the arrest of SINA MOAYEDI, the owner of a construction company on charges of wire fraud, conspiracy to commit wire fraud, and one count of bribery of a public official. According to the announcement, “Sina Moayedi allegedly paid lucrative bribes to a State Department insider in exchange for confidential bidding information, and fraudulently induced the State Department to pay his company approximately $100 million.” Excerpt from the announcement:

Manhattan U.S. Attorney Audrey Strauss said:  “As alleged, Sina Moayedi made misrepresentations about his employees’ qualifications and his company’s ownership in order to induce the State Department into awarding approximately $100 million in lucrative construction contracts to Moayedi’s company, Montage, Inc.  Moayedi also allegedly cultivated a State Department insider, and paid the insider lucrative bribes in exchange for confidential State Department bidding information.  Moayedi must now be held accountable for his alleged brazen fraud on the government.”

Special Agent in Charge Michael Speckhardt said:  “As alleged, the defendant’s scheme to undermine the Department’s procurement process for personal gain caught up with him today and he will now be held accountable.  His alleged actions not only hurt other legitimate businesses competing for awards, but also damage the public’s trust in the effective and efficient utilization of taxpayer money.”

According to allegations in the Complaint[1]:

Montage, Inc. (“Montage”) is a U.S.-based business that is primarily involved in worldwide Government construction projects, including embassies, military posts, consulates, and similar overseas properties owned and operated by the United States Government.  Montage has performed over $220 million in contracting work for the U.S. Government, including for the Department of Defense, the Department of Justice/Federal Bureau of Investigation, the State Department, the Department of the Interior, the Department of Agriculture, the National Aeronautics and Space Administration (“NASA”), the Equal Employment Opportunity Commission (“EEOC”), and the Department of Veterans Affairs.  Since 2014, Montage appears to have focused primarily on competing for and obtaining contracts with the State Department.  During that period, the State Department has awarded Montage approximately six overseas U.S. Embassy/Consulate construction project contracts totaling $100 million, in locales such as Ecuador, Spain, Sudan, the Czech Republic, and Bermuda.  The founder of Montage is SINA MOAYEDI.

Montage engaged in at least two fraud schemes.  The first scheme alleges that, from approximately 2014 to September 2020, MOAYEDI and Montage lied that it was a female-owned business in order to secure unmerited advantages in the bidding process.  By way of context, it is advantageous to a company, when bidding for federal government contracts, to be majority-owned by an individual from a socially or economically disadvantaged community.  In fact, certain contracts (or portions of contracts) are “set aside” for – i.e., only available to – such companies.  MOAYEDI and Montage repeatedly represented falsely in submissions to the State Department that Montage was female-owned, or female-owned and minority-owned, in order falsely to induce the State Department to award Montage lucrative construction contracts.  In actuality, MOAYEDI repeatedly lied about Montage being a female-owned business, and indeed, MOAYEDI controls Montage and makes all material decisions on Montage’s behalf.  As MOAYEDI revealed to a bank that inquired about Montage’s ownership status, “I am the sole owner and president of Montage and have always been.”  Montage and MOAYEDI also repeatedly misrepresented, and significantly overstated, the qualifications of Montage employees.  MOAYEDI made these misrepresentations in order to, among other things, meet State Department and contractual requirements for minimum experience in certain key positions.

The second scheme charged in the Complaint is a bribery scheme during at least 2016 and 2017.  Insider-1 is employed in the State Department’s Overseas Building Operations (“OBO”), which, according to OBO’s website, “directs the worldwide overseas building program for the Department of State and the U.S. Government community serving abroad.”  Specifically, Insider-1 works for the State Department’s OBO Project Development and Coordination Division, European division.  
[…]
MOAYEDI, 66, of Chevy Chase, Maryland, is charged with one count of wire fraud, and one count of conspiracy to commit wire fraud, each of which carries a maximum potential prison sentence of 20 years, and one count of bribery of a public official, which carries a maximum potential prison sentence of 15 years.  
[…]
[1] As the introductory phrase signifies, the entirety of the text of the Complaint and the description of the Complaint set forth below constitute only allegations, and every fact described should be treated as an allegation.

Download U.S. v Sina Moayedi complaint (21 mag 5598).pdf
Excerpt from complaint:

15. Based on my review of State Department records, I am aware that between approximately 2014 and 2017, Montage was awarded six U.S. embassy/consulate construction projects with the State Department, worth a total of approximately $100 million.
[…]
26. Based on information derived from witness interviews, I reviewed resumes submitted by Montage for various State Department projects. Department requirements referenced in the contract specify certain levels of experience in order to serve as “key personnel” (i.e., personnel whom the State Department has deemed critical to the safe, successful, and timely completion of a project).
[…]
In the course of my review, I identified numerous deficiencies regarding the resumes of key personnel submitted to the State Department for the Guayaquil, Ecuador project.

a. For example, Montage submitted an individual for the key role of Project Controls Engineer and Site Health Project Manager. In the claimed experience for this individual, it stated that he was employed at Montage since 2008 and had “inspected emergency egress and life/safety issues” and conducted “inspections of asbestos containment.” In fact, this individual had only been employed at Montage for approximately one year, and served in an office staff capacity, performing none of those duties.
[…]
[O]ne Montage employee’s resume claimed that he had earned a bachelor’s Degree in Civil Engineering and also claimed years of full-time complex work in the construction field in various capacities over several years. Neither representation was true. In fact, this individual testified at a deposition that they did not graduate; and this individual’s SF-86 security clearance application noted that this individual had actually sold meat as a door-to-door salesman, was a landscaper, and built swimming pools for several years during the period that they had claimed years of full-time complex work in the construction field.
[…]
39. I am aware, from my personal participation, that a judicially authorized search warrant was executed at the residence of Insider-1, on or about May 20, 2021. On that date, Insider-1 was informed, in substance, that she was not in custody, she was free to go, and she was not required to speak with law enforcement agents. She then participated in a voluntary interview with myself and an SDNY Special Agent on her back porch, and she made the following statements, in substance and part:

a. At first, Insider-1 claimed to have sold a large green rug to SINA MOAYEDI, the defendant, for about $60,000, but she said that the payment for the rug came from MOAYEDI’s friend.

Read more here.
The Daily Beast has identified the OBO insider in their May 27 report as well as provided the link to the Salehi Search Warrant; she has not been charged.
The document is 145 pages, the allegations spans many years and the government appears to be looking at multiple embassy projects.  The project in Guayaquil, Ecuador gets top mention. The search warrant executed includes “Records and information relating to forged submittals for the Guayaquil Consulate Project in Ecuador, and other State Department or other Government construction projects” and “Records and information that constitute evidence concerning persons who either (i) collaborated, conspired, or assisted (knowingly or unknowingly) the commission of the criminal activity under investigation; or (ii) communicated with MOAYEDI or other MONTAGE employees about matters relating to the criminal activity under investigation, including records that help reveal their whereabouts.”

Related news:

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State/OIG: Accountability of Official and Diplomatic Passports Needs Improvement

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State/OIG issued its Management Assistance Report: Accountability of Official and Diplomatic Passports of Separating Employees Needs Improvement this week.
According to the OIG, in December 2020, after it announced an audit of official and diplomatic passport records, the Office of Inspector General (OIG) was alerted that a former Department of State employee, a political appointee, allegedly kept their diplomatic passport after separating from the Department and wanted to use it in their new role with another U.S. Government organization.

Specifically: “A politically appointed Senior Advisor separated from the Department in November 2019. In 2020, President Trump appointed the former advisor to a role with another U.S. government organization. A representative from the new organization contacted the appointee’s former Department bureau because the political appointee was in possession of a diplomatic passport. The representative wanted to know whether the appointee could travel on behalf of the new organization using this diplomatic passport. The representative was informed by a bureau official that the appointee should not use the diplomatic passport.”

Excerpt from the MAR:

(U) During an audit of CA’s official and diplomatic passport records, OIG was alerted that a former Department employee had allegedly not surrendered their diplomatic passport upon separation from the Department and wanted to use it in a new role with another U.S. Government organization.24 According to the FAM, entitlement to an official or diplomatic passport ends when the employee separates from the Department, and the passport must be surrendered for cancellation.25

U) OIG found that the former employee’s diplomatic passport was listed as “issued” in ACRQ and had not been electronically cancelled by SIA. Based on that information, OIG performed additional steps to determine whether SIA had cancelled other employees’ official and diplomatic passports once separated from the Department. Specifically, OIG selected a sample of 134 official and diplomatic passports issued to employees who subsequently separated from the Department between November 2017 and September 2020. OIG found that 57 of 134 (43 percent) passports had not been electronically cancelled by SIA after the employee separated. Moreover, of the 57 that had not been electronically cancelled, 47 (82 percent) of the passports had not expired as of February 1, 2021, meaning they could still be valid.

(U) One reason for the deficiencies identified is that Department bureaus and offices did not always maintain proper accountability of passports and could not confirm whether separating employees had surrendered their passports for cancellation. When an employee’s entitlement to an official or diplomatic passport ends, but the passport is not surrendered or cancelled, the individual could misuse the passport, such as misrepresenting themselves as a representative of the U.S. Government. Doing so is a criminal offense.26

(U) Separated Employees’ Official and Diplomatic Passports

(U) Based upon a Bureau of Global Talent Management list of employees who had separated from the Department between November 2017 and September 2020, OIG identified 4,714 official and diplomatic passports associated with those employees. OIG selected a sample of 134 passports to test. 27 OIG found that 57 of 134 (43 percent) passports had not been electronically cancelled by SIA. In addition, of those 57 passports, 47 (82 percent) had not expired, as of February 1, 2021, meaning they could stil l be valid. 28 For example, one employee separated from the Department in December 2017, but the employee’s diplomatic passport was not scheduled to expire until April 2022- more than 4 years after separating from the Department.

OIG apparently followed up with 3 bureaus and 1 office to determine whether 17 former Department employees had surrendered their passport(s) and whether the bureaus or office had requested that SIA cancel the passports in accordance with the FAM. The follow-up revealed the following:

Two former CA employees:  “OIG identified two former CA employees who had diplomatic passports listed as “issued” in ACRQ. According to CA’s employee check-out list, employees are required to return special-issuance passports to SIA that were issued to them and to their family members upon separation and obtain the signature of an SIA staff member. SIA has no record of either of these two passports being returned for cancellation after the employees separated.”

Two former Office of the Secretary employees: “OIG identified two former Office of the Secretary employees who had diplomatic passports listed as “issued” in ACRQ. These two individuals had four passports issued to them. The Office of the Secretary’s employee check-out form requires departing employees to return their special-issuance passports and have the form initialed by the Office of the Secretary’s budget and travel office staff. An Office of the Secretary official stated that the office would have been in possession of three of the identified passports because the office maintains the diplomatic passports of people who travel with the Secretary of State. Because the three passports could not be found in the office, the official assumed that they were physically cancelled and returned to the individual. The Office of the Secretary could not provide information on the fourth passport. The Office of the Secretary official stated that a memorandum would have accompanied each passport to SIA for cancellation, but copies of the memoranda were not maintained .”(what the what? italics added).

Eleven former DS employees:  “OIG identified 11 former Bureau of Diplomatic Security (DS) employees who had diplomatic passports listed as “issued” in ACRQ. These 11 individuals had 16 passports issued to them, including 2 that were issued to a former Assistant Secretary. DS’s employee check-out form requires employees to return to the Employee Services Center or contact SIA about special-issuance passports that were issued to them and to their family members upon separation. A DS official stated that the two passports issued to the former Assistant Secretary were collected before he separated from the Department, but DS had not returned them to SIA. The DS official stated that a former employee, who returned as a PSC, claimed to have lost one passport but there was no comment on her second passport and another employee’s passport had been returned to CA. Three former DS employees had returned four passports in total to their DS offices; however, DS could not locate an additional passport for one of these individuals and an additional two passports for another of these individuals. The DS official further stated that DS did not have records for two of the people associated with two passports. DS may have facilitated the issuance of these passports, but they were not DS employees. DS did not provide information on the remaining 2 of 16 passports.”

OIG recommends that the Bureau of Consular Affairs “improve accountability over special-issuance passports by updating the Foreign Affairs Manual and any other relevant policy documents to require that (a) all Department of State bureaus and offices that participate in the Special Issuance Passport Program either (1) physically cancel special-issuance passports (including secondary passports) issued to a separating employee and email the Special Issuance Agency (SIA) a copy of the physically cancelled data page requesting that the passport(s) be electronically cancelled (along with returning the passport to SIA for destruction if not returned to the separating employee) or (2) if appropriate, file the special-issuance passport with SIA and (b) the Special Issuance Agency confirm that all special-issuance passports issued to the separating employee have been included in the cancellation request and electronically cancel all additional passport(s) as appropriate.”
Consular Affairs concurred with the recommendation, stating that it “will propose updates to the FAM and to the Special Issuance Passport Program.”  The bureau will also “update SIA’s cancellation and destruction SOP to confirm that all special-issuance passports issued to a separating employee have been included in the cancellation request and electronically cancel all additional passports as appropriate.”

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Indictments For Alleged Large-Scale Visa Fraud Employment Scheme

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On April 20, USDOJ announced the indictment of two businesses and nine of their officers and managers for an alleged large-scale visa fraud employment scheme. Excerpt from the announcement:

An indictment returned by a federal grand jury in the Southern District of Georgia has been unsealed charging two businesses and nine of their officers and managers located across the country for their roles in an alleged conspiracy to defraud the U.S. government and commit various fraud and criminal immigration offenses for profit.

According to court documents, Regal Hospitality Solutions, LLC; Educational World, Inc.; Karen Makaryan, 42, Sargis Makaryan, 42, and Samvel Nikoghosyan, 40, of Destrehan, La.; Artur Grigoryan, 38, of Biloxi, Miss.; Armen Ayrapetyan, 37, of Duluth, Ga.; Jason Hill, 28, of Virginia Beach, Va.; Fremie Balbastro, 49, of Myrtle Beach, S.C.; and Larisa Khariton, 73, and Jon Clark, 71, of North Port, Fla., were charged in a 36-count indictment returned by a federal grand jury on April 8. Each defendant was charged with one count of conspiracy to defraud and commit offenses against the United States, including encouraging and inducing an alien to reside in the United States, alien harboring, transporting aliens, and visa fraud.  Each defendant also was charged with substantive counts of encouraging and inducing an alien to reside in the United States, alien harboring, and transportation of aliens. In addition, Regal Hospitality Solutions, LLC; Karen Makaryan; Sargis Makaryan; Samvel Nikoghosyan; Artur Grigoryan; Armen Ayrapetyan; Fremie Balbastro; and Jason Hill were also charged with one count of conspiracy to commit wire fraud and 10 counts of wire fraud.

“The defendants in this case allegedly engaged in an expansive conspiracy to enrich themselves by exploiting both the immigration system and noncitizen workers,” said Acting Assistant Attorney General Nicholas L. McQuaid of the Justice Department’s Criminal Division. “Systemic fraud and abuse of U.S. visa programs and processes designed to protect American workers and businesses will not be tolerated, and offenders will be held accountable.”
[…]
“The Department’s Bureau of Educational and Cultural Affairs aims to increase mutual understanding between the people of the United States and the people of other countries by means of educational and cultural exchange,” said Acting Assistant Inspector General for Investigations Robert Smolich of the U.S. Department of State, Office of Inspector General, Office of Investigations. “When bad actors corrupt these programs for personal gain, it not only diminishes an important tool of diplomacy, it harms the thousands of individuals who participate in these programs hoping to gain skills and experience to make a better life. Today we took a step forward in restoring integrity back to those programs.”

“These defendants’ alleged scheme to game the immigration system and defraud the government has backfired and they will now be held accountable,” said Special Agent in Charge Katrina W. Berger of Homeland Security Investigations (HSI), Georgia and Alabama. “Schemes like this not only exploit the noncitizen workers involved, they also damage the other legitimate businesses in the community. Protecting the integrity of the visa program and immigration system is vital to the security of our nation.”
[…]
Individual defendants have made their initial court appearances and the arraignment of all defendants will be scheduled before U.S. Magistrate Judge Benjamin W. Cheesbro of the U.S. District Court for the Southern District of Georgia. If convicted, the individual defendants face maximum potential statutory penalties of five years in prison on the count of conspiracy to defraud and commit offenses against the United States; 10 years in prison on the counts of encouraging and inducing an alien to reside in the United States, alien harboring, and transportation of aliens; and 20 years in prison on the counts of wire fraud conspiracy and substantive wire fraud. The organizational defendants are subject to a maximum fine on each count of conviction of $500,000 or twice the gross amount of gain or loss resulting from the offense. A federal district court judge will determine any sentence after considering the U.S. Sentencing Guidelines and other statutory factors.

The U.S. Department of State Office of Inspector General is investigating the case with assistance provided by HSI and U.S. Citizenship and Immigration Services.

Trial Attorneys Frank Rangoussis and John-Alex Romano of the Criminal Division’s Human Rights and Special Prosecutions Section and Assistant U.S. Attorney Alejandro V. Pascual IV of the Southern District of Georgia are prosecuting the case.

An indictment is merely an allegation and all defendants are presumed innocent until proven guilty beyond a reasonable doubt in a court of law.

Read the full announcement here.

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Foggy Bottom’s Humongous Professional Ethos Poster Board Deserves a New Life

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State/OIG Releases Report on Pompeos Personal Use of USG Resources During Foggy Bottom Tenure

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It’s a wonder they did not create an Office of the First Lady of the State Department in Foggy Bottom.

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