U.S. brings fraud charges against firm that vetted Snowden

[January 23, 2014]  By Sakthi Prasad

(Reuters) — The Justice Department has accused United States Investigations Services (USIS), the private firm that also vetted Edward Snowden before he leaked documents about U.S. spying efforts, of bilking millions of dollars through improper background checks, a court filing showed.

USIS has a contract with the U.S. government since 1996 to vet individuals seeking employment with federal agencies. Such background checks include investigative fieldwork on each application.

The whistleblower lawsuit, filed in July 2011 by a former employee of USIS, is not about the firm's review of Snowden. The lawsuit alleges that USIS failed to perform quality control reviews in connection with its background investigations.

Blake Percival filed the lawsuit under the False Claims Act, which lets people collect rewards for blowing the whistle on fraud against the government.

In a filing made late on Wednesday, the Justice Department (DOJ) said USIS submitted background investigations that were not reviewed as per agreed standards.

DOJ said that due to its fraudulent conduct, USIS received millions of dollars that it otherwise would not have received had the government been aware that the background investigations had not gone through the quality review process required by the contract.

The DOJ said that between March 2008 and September 2012, USIS filed at least 665,000 flawed background checks, which was about 40 percent of the total submissions.

"USIS management devised and executed a scheme to deliberately circumvent contractually required quality reviews of completed background investigations in order to increase the company's revenues and profits," DOJ said in its filing.

The payments to the firm ranged $95 to $2,500, depending on the type of background investigation. The lawsuit requested for a jury trial and seeks to recover treble damages and penalties.

Through a software known as "Blue Zone," USIS was able to quickly make an electronic "Review Complete" notation without fully going through the mandated review process, DOJ said.

"By using Blue Zone, USIS was able to substantially increase the number of background investigations that could be dumped in a short time period," according to the filing.

USIS could not immediately be reached for comment by Reuters outside of regular U.S. business hours.

The case is United States Of America ex rel. Blake Percival vs U.S. Investigations Services, Case No. 11-cv-527, U.S. District Court, Middle District of Alabama (Northern Division)

(Reporting by Sakthi Prasad in Bangalore; editing by Supriya Kurane)

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