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
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,
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
Therefore, he enlisted the assistance of others to carry out a
Washington recruited Mandell, who submitted to OWCP medical
eligibility for long-term treatment. Washington also recruited Atkins
to provide counseling services to OWCP claimants. Washington,
The Office of Inspector
Department of Labor (DOL) is
pleased to present the
OIG Investigations Newsletter,
presenting a bimonthly
summary of selected
The OIG conducts criminal,
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
investigations in three areas:
employee benefit plans, labor-
management relations, and
internal union affairs.
Report allegations of fraud, waste, and abuse concerning DOL programs and operations to the OIG
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
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.
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
On August 30, 2016, former federal employee John Maddux was sentenced to 10 years in prison,
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
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
On August 31, 2016, Mark Kirsch, former president and business manager of International Union of
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.
Under Kirsch’s leadership, officials of IUOE Local 17 targeted nonunion contractors who refused to sign
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.
As a result of his conviction, Kirsch is barred from acting in any official capacity or exercising
This is a joint investigation with the FBI and New York State Police. United States v. Larson et al. (W.D.
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
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
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
EZ Flex was a third-party administrator responsible for administering a flexible spending plan that
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.
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
From 2010 through 2015, Bart and Cabrera operated Labor Listo, an unregistered business, which they
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.
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
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.
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.,
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)