Fraud:

Characteristics, Sanctions, and Prevention at Agriculture, Labor, and GSA

AFMD-88-34BR: Published: Jun 23, 1988. Publicly Released: Aug 5, 1988.

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In response to a congressional request, GAO reviewed fraud investigations that Inspectors General (IG) at the Departments of Agriculture (USDA) and Labor (DOL) and the General Services Administration (GSA) referred to the Department of Justice (DOJ) for prosecution to determine the: (1) most prevalent types of fraud and the programs most affected; and (2) actions DOJ took against subjects referred for prosecution.

GAO found that: (1) 58 percent of the USDA cases involved food program fraud, 20 percent involved farm loan fraud, 12 percent involved commodity-price-support program fraud, and 9 percent involved accounting fraud; (2) program investigations decreased from 998 in 1983 to 226 in 1986; and (3) of the 3,333 cases USDA referred from 1983 to 1986, DOJ accepted 1,861 for prosecution, resulting in 2,328 convictions and $64 million in recoupments. GAO also found that: (1) 80 percent of the DOL cases involved claimant fraud in the unemployment compensation program, 13 percent involved contractor wage standards violations, and 7 percent involved provider fraud; (2) referrals involving unemployment compensation fraud rose from 33 in 1983 to 504 in 1985 after DOL IG rescinded an investigation agreement with the Federal Bureau of Investigation; and (3) reported convictions rose from 174 in 1983 to 850 in 1987, while recoupments increased from $6.6 million to $14.9 million over the same period. In addition, GAO found that: (1) GSA referred 492 fraud cases for prosecution from 1983 to 1985; (2) GSA categorized 48 percent as white-collar crime, 25 percent as theft, 5 percent as bribery or conflict of interest, and 22 percent as other activities, such as employee misconduct; (3) DOJ accepted 133 of the cases for prosecution, resulting in 164 legal actions against 189 subjects and settlements of $13.4 million; and (4) a GSA IG investigation revealed poor contract administration and inspection practices, emphasizing the need for full-time, on-site inspections.

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