Microsoft Word dol-oig investigations Newsletter August September 2016 1110

Yüklə 422,84 Kb.
Pdf görüntüsü
ölçüsü422,84 Kb.



       Office of Inspector General for the U.S. Department of Labor 

OIG Investigations Newsletter 


August 1 – September 30, 2016 

Volume VI 







Texas Medical Providers and Former Federal Employees 

Sentenced in $9.5 Million Health Care Scheme 


Four individuals were sentenced in August 2016 for their 

involvement in a scheme to defraud The Office of Workers' 

Compensation Programs (OWCP). Former OWCP claims examiner 

Perry Rowell was sentenced to 15 months in prison. Retired OWCP 

supervisor Ifeanyi “Tim” Egbuchunam was sentenced to 51 months 

in prison and ordered to pay more than $2 million in restitution. 

Robert Mandell, MD, was sentenced to 36 months of probation and 

ordered to pay more than $450,000 in restitution. Willie Atkins, a 

licensed professional counselor, was sentenced to 9 months of 

home confinement and 36 months of probation, and ordered to pay 

approximately $300,000 in restitution.  


Rowell, Egbuchunam, Mandell, and Atkins, each of whom pled guilty 

in January 2016, are among 30 defendants charged in November 

2015 with various crimes related to their roles in a substantial health 

care fraud scheme that involved bribes, unnecessary medical 

treatment, fraudulent billing, and falsification of medical documents 

to fraudulently bill OWCP for more than $9.5 million. Lead defendant 

Larry Washington, of Desoto, Texas, was sentenced in May 2016 to 

78 months in prison and ordered to pay more than $7.7 million in 

restitution to OWCP.  


From January 2009 to September 2014, Washington ran Mind Spa, 

Inc., a Desoto, Texas–based clinic that purportedly provided OWCP 

claimants with counseling, pain management, chiropractic services, 

physical therapy, and massage services. Even though most of his 

OWCP patients had once suffered a work-related injury, Washington 

knew their injuries were not severe enough to warrant continued 

OWCP payments. 


Therefore, he enlisted the assistance of others to carry out a 

scheme to fraudulently bill OWCP on a continuing basis.  


Washington recruited Mandell, who submitted to OWCP medical 

reports that fabricated claimant medical conditions so as to establish 

eligibility for long-term treatment. Washington also recruited Atkins 

to provide counseling services to OWCP claimants. Washington,  





The Office of Inspector 

General (OIG) for the U.S. 

Department of Labor (DOL) is 

pleased to present the  

OIG Investigations Newsletter, 

presenting a bimonthly 

summary of selected 




The OIG conducts criminal, 

civil, and administrative 

investigations relating to 

violations of federal laws, 

rules, or regulations, including 

those performed by DOL 

contractors and grantees; as 

well as investigations of 

allegations of misconduct on 

the part of DOL employees. In 

addition, the OIG has an 

external program function to 

conduct criminal investigations 

to combat the influence of 

labor racketeering and 

organized crime in the nation’s 

labor unions. We conduct 

labor racketeering 

investigations in three areas: 

employee benefit plans, labor-

management relations, and 

internal union affairs.



OIG Investigations Newsletter



Volume VI,  August 1–September 30, 2016 



Report allegations of fraud, waste, and abuse concerning DOL programs and operations to the OIG 

hotline via 202-693-6999 or 




Mandell, and Atkins all routinely billed OWCP for services not rendered to patients.  


Washington also enlisted the help of Egbuchunam, paying him $10,000 a month to use his position as 

an OWCP claimant representative to direct claimants to seek their treatment at Mind Spa. Egbuchunam 

paid cash to Rowell, who used his position as an OWCP claims examiner to perform unauthorized case 

queries of OWCP claimant data, falsify claimant records, and expedite payments. Rowell’s employment 

was terminated following his conviction in January 2016. This is a joint investigation with the U.S. Postal 

Service –OIG and the U.S. Department of Veterans Affairs–OIG. United States v. Larry Washington et 

al. (N.D. Texas) 


Ringleader Sentenced to 90 Months in Prison for $1.4 Million Unemployment Insurance Scheme 


On August 29, 2016, Diameter Akala was sentenced to 90 months in prison and ordered to pay 

restitution and forfeiture of more than $1.4 million for his leading role in a fictitious employer scheme 

perpetrated against the Maryland and Pennsylvania Unemployment Insurance (UI) programs. Eight of 

Akala’s co-conspirators were previously sentenced to prison for their roles in the scheme. 



The defendant, Diameter Akala, conducting an  

ATM transaction using a fraudulently obtained  

Unemployment Insurance debit card 


From 2012 to 2015, Akala created at least nine fictitious companies in Maryland and Pennsylvania, and 

filed wage reports falsely stating that the bogus entities employed and paid wages to hundreds of 

individuals. Akala used personally identifiable information of individuals who had given permission to 

have their information used, as well as many who had not. He filed benefit applications by posing as 

individuals who had been laid off by the fictitious businesses, causing hundreds of UI debit cards to be 

mailed to various commercial and residential addresses controlled by Akala or a co-conspirator, 

including locations in Maryland, Virginia, New York, Pennsylvania, and the District of Columbia. Akala 

took steps to ensure continued weekly funding of the debit cards, which he and his co-conspirators used 

to withdraw cash and make personal purchases. Akala also filed paperwork to begin the execution of 

similar schemes in Connecticut and Massachusetts.  


This was a joint investigation with the U.S. Postal Inspection Service. United States v. Diameter Akala et 

al. (D. Maryland)  

OIG Investigations Newsletter



Volume VI,  August 1–September 30, 2016 



Report allegations of fraud, waste, and abuse concerning DOL programs and operations to the OIG 

hotline via 202-693-6999 or 



Kentucky Man Sentenced to Prison for Schemes to Defraud OWCP and Evade Taxes 


On August 30, 2016, former federal employee John Maddux was sentenced to 10 years in prison, 

ordered to pay more than $130,000 in restitution to DOL, and ordered to forfeit his interests in various 

properties worth at least $45 million. The sentence was imposed for Maddux’s criminal conduct relative 

to two separate but related schemes, the first involving false statements to DOL to obtain workers’ 

compensation benefits, and the second involving a large-scale tax evasion scheme. 


Maddux pled guilty in May 2016 to charges that he had made false statements to DOL as part of an 

ongoing effort to receive workers’ compensation payments to which he was not entitled as a result of his 

involvement with numerous business enterprises. He also pled guilty to numerous criminal charges 

related to his leading role in a scheme to evade at least $48 million in taxes through his operation of 

several mail-order and Internet businesses involved in illegal sales of cigarettes to customers in the 

United States and abroad.  


This was a joint investigation with the Bureau of Alcohol, Tobacco, Firearms and Explosives; IRS  

Criminal Investigation; and the Food and Drug Administration. United States v. Maddux et al. (E.D. 



Former New York Union Leader Sentenced to Prison for Racketeering and Hobbs Act Conspiracy 


On August 31, 2016, Mark Kirsch, former president and business manager of International Union of 

Operating Engineers Local 17 (IUOE Local 17), was sentenced to 36 months in prison and ordered to 

pay more than $198,000 in restitution for his role in leading a 10-year criminal enterprise, which had as 

its objective the extortion of property from various construction firms throughout western New York. In 

March 2014, after an eight-week trial, a federal jury convicted Kirsch of conspiracy to commit 

racketeering, conspiracy to commit extortion, and attempted extortion. 



Homemade metal “stars” used by Local 17 members  

to flatten tires of vehicles belonging to nonunion workers 


Under Kirsch’s leadership, officials of IUOE Local 17 targeted nonunion contractors who refused to sign 

their collective bargaining agreements with IUOE Local 17 by damaging their construction equipment, 

threatening and intimidating their employees, and causing property damage on picket lines by flattening 

tires and breaking windshields on construction vehicles owned by the nonunion contractors. 

OIG Investigations Newsletter



Volume VI,  August 1–September 30, 2016 



Report allegations of fraud, waste, and abuse concerning DOL programs and operations to the OIG 

hotline via 202-693-6999 or 




As a result of his conviction, Kirsch is barred from acting in any official capacity or exercising 

discretionary control over the assets of any labor organization or employee benefit plan for 13 years. 


This is a joint investigation with the FBI and New York State Police. United States v. Larson et al. (W.D. 

New York) 


South Carolina Restaurant Owner Sentenced to Prison for Scheme to Deceive Wage and Hour 



On August 26, 2016, Jose Jaime Villalpando, owner of Senor Tequila Mexican Restaurants in 

Charleston, South Carolina, was sentenced to five months in prison and ordered to pay more than 

$75,000 in restitution for submitting false statements in response to a DOL- Wage and Hour Division 

(WHD) investigation into whether Senor Tequila was paying its employees proper minimum wage and 

overtime pay in compliance with the Fair Labor Standards Act.  


In 2011, a WHD investigation found that Senor Tequila had failed to pay several employees more than 

$105,000 in minimum wage and overtime pay over approximately two years. In response to WHD 

findings, Villalpando agreed to pay full back wages to the affected employees. However, instead of 

paying all the back wages, he devised and executed a scheme to deceive WHD investigators and avoid 

payment of more than $75,000 of the back wages he had agreed to pay.  


The DOL-OIG investigation revealed that Villalpando issued back-wages paychecks to employees and 

then took the employees to a bank, where he had them set up accounts and deposit the paychecks. 

Over the next several weeks, Villalpando instructed the employees to withdraw the amounts of their 

back-wages paychecks in increments and give the money back to him. Villalpando then mailed letters to 

WHD stating that he had paid the employees, and he attached copies of the canceled back-wages 

paychecks in an attempt to deceive WHD that he had in fact paid the employees. United States v. Jose 

Jaime Villalpando (D. South Carolina) 


Colorado Woman Sentenced for Defrauding Health Care Clients  


On August 29, 2016, Kimberly Cileno, former owner and operator of EZ Flex, Inc., was sentenced to 24 

months in prison and ordered to pay more than $230,000 in restitution for embezzling health care plan 



EZ Flex was a third-party administrator responsible for administering a flexible spending plan that 

offered benefits to approximately 36 participating employers and more than 500 participating 

employees. Participating employers forwarded designated payroll deductions to EZ Flex, and 

participants submitted claims for reimbursement of eligible expenses directly to EZ Flex. The 

investigation revealed that between January 12, 2011, and December 10, 2012, Cileno embezzled more 

than $230,000 in EZ Flex client funds, which she used on personal purchases, including home 

renovations and a vacation. 


This was a joint investigation with the Employee Benefits Security Administration. United States v. 

Kimberly S. Cileno (D. Colorado) 

OIG Investigations Newsletter



Volume VI,  August 1–September 30, 2016 



Report allegations of fraud, waste, and abuse concerning DOL programs and operations to the OIG 

hotline via 202-693-6999 or 



Ohio Labor Recruiters and Minnesota Farm Owner Convicted of Visa Fraud Conspiracy 


Three individuals have been found guilty of conspiring to collect illegal fees and kickbacks from foreign 

workers on H-2A visas. On August 8, 2016, after a one-week jury trial, labor recruiter Sandra Lee Bart 

was found guilty of wire fraud, mail fraud, and conspiracy to commit visa fraud for her role in the 

scheme. Bart’s business colleague, Wilian Socrate Cabrera, and farm owner John Svihel had previously 

pled guilty on July 14, 2016, and June 16, 2016, respectively, to conspiracy to commit fraud in foreign 

labor contracting.  


From 2010 through 2015, Bart and Cabrera operated Labor Listo, an unregistered business, which they 

used to recruit employers like Svihel, who ran Svihel Vegetable Farm in Foley, Minnesota, to use their 

services to hire temporary foreign workers under DOL’s H-2A visa program. DOL’s H-2A visa program

which provides temporary visas to agriculture workers, requires that employers pay for workers’ housing 

and travel expenses to and from their home country, and prohibits employers from collecting recruitment 

fees or wage kickbacks. Nevertheless, Bart, Cabrera, and Svihel devised and executed a scheme to 

collect cash kickbacks from Svihel’s H-2A workers, including a wage kickback for every hour worked at 

Svihel Vegetable Farm and a kickback equal to the cost of the workers’ flights to and from the United 

States. In total, workers were forced to pay illegal fees in excess of $198,000. As part of his plea 

agreement, Svihel agreed to pay more than $575,000 in civil monetary penalties for unpaid wages to H-

2A workers affected by the scheme. 


This is a joint investigation with WHD, the Bureau of Diplomatic Security, and HSI. United States v. 

Cabrera (D. Minnesota)    


Southern California Man Found Guilty in $5 Million Unemployment Insurance Fraud Scheme 


On August 15, 2016, after a six-day trial, a federal jury in Sacramento, California, found Andre Walters 

guilty of four counts of mail fraud for his involvement in a scheme to defraud the California 

unemployment insurance program of at least $5 million.  


According to evidence presented at trial, Walters was a “manager” in the scheme, which Walters and 

others carried out from approximately 2008 to 2011. The scheme involved registering fictitious 

businesses with the State of California, listing “employees” as having earned wages at those fictitious 

businesses when in fact they never worked there, and then filing for unemployment benefits on behalf of 

those employees. Walters recruited people to pose as these “employees,” managed their 

unemployment claims once filed, and split the resulting proceeds of the unemployment claims. Walters 

is the sixth individual to be convicted for participating in this fraud scheme. This is a joint investigation 

with the FBI and the California Employment Development Department. United States v. Parks et al. 

(E.D. California) 




OIG Investigations Newsletter



Volume VI,  August 1–September 30, 2016 



Report allegations of fraud, waste, and abuse concerning DOL programs and operations to the OIG 

hotline via 202-693-6999 or 



Illinois Businessman Pleads Guilty to $1.9 Million Union Fraud Scheme 

On August 11, 2016, former Chicago construction company president Yashvant Patel pled guilty to mail 

fraud and making false statements in connection with a scheme to defraud the benefit funds of the 

Construction and General Laborers’ District Council of Chicago and Vicinity of approximately $600,000. 


From January 2009 through October 2010, while serving as president of My Baps Construction Corp., 

Patel underreported approximately 33,000 hours worked by employees of My Baps and a sister 

company, Vijay Construction Corp., resulting in lower employer contributions to the union’s benefit 

funds. Patel also underpaid his workers by approximately $1.3 million during the same time frame and 

paid off-the-books cash wages to many individuals who were not legally authorized to work in the United 



This is a joint investigation with the FBI. United States v. Yashvant C. Patel (N.D. Illinois) 


Yüklə 422,84 Kb.

Dostları ilə paylaş:

Verilənlər bazası müəlliflik hüququ ilə müdafiə olunur © 2024
rəhbərliyinə müraciət

    Ana səhifə