[Excerpt]I am pleased to submit this Semiannual Report to the Congress, which summarizes the significant activities and accomplishments of the Office of Inspector General (OIG) for the six- month period ending September 30, 2005. During this reporting period, our investigative work led to 353 indictments, 182 convictions, and over $182 million in monetary accomplishments. Our audits of Department of Labor (DOL) programs and operations resulted in $11 million in questioned costs.
One of the most notable achievements during this period was the first-ever civil complaint filed against the International Longshoremen’s Association using the Racketeer Influenced and Corrupt Organizations statute. This historic filing seeks to end corruption and mob domination of this important labor union and put its future back into the hands of the rank-and-file members that it was designed to serve.
The OIG’s work has identified vulnerabilities and fraud in DOL programs, such as the Foreign Labor Certification program. The recent prosecution of immigration attorney, Maqsood Mir, and his associates ended their scheme to profit by filing fraudulent labor certifications and visa petitions. Mir was sentenced to 78 months in prison and ordered to pay $25,000 in fines; his firm was ordered to pay $200,000 in fines.
Another significant case in our labor racketeering program led to the prosecution and guilty plea of Peter Wong on charges of insurance fraud and money laundering. Wong controlled a group medical association that failed with over $18 million in unpaid medical claims. He caused one of the largest health plan failures in Hawaii’s history by misappropriating and diverting funds to his family’s companies.
We also made significant findings and recommendations through our audit program. Our performance audit of the National Emergency Grant (NEG), which is used to provide interim health insurance coverage cost assistance under the Trade Adjustment Assistance Reform Act of 2002, found that less than 5% of the eligible population participated in the program. The audit also revealed that less than 7% of the appropriated funds were expended. In response to an OIG recommendation, ETA agreed to conduct an immediate needs assessment of NEG funds, and redirect funds as appropriate, for example allowing states with excess funds to redirect such funds to Hurricane Katrina response activities.
Another significant audit revealed that few states are using IRS 1099 data to identify employer misclassification of employees as independent contractors, thereby avoiding proper payment of unemployment insurance taxes.
Responding to a prior OIG evaluation of the Mine Safety and Health Administration’s (MSHA) handling of inspections, MSHA issued a proposed rule that would lower the permissible exposure limit of asbestos at several types of mines. This action satisfied a recommendation in our report and is consistent with the Occupational Safety and Health Administration’s asbestos standards.
Finally, in keeping with our efforts to prevent and recognize fraud, waste, and abuse in DOL programs, we are working collaboratively with government officials at all levels to provide oversight of funds dedicated to providing relief and recovery to those affected by Hurricanes Katrina and Rita.