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Directorate for Management

  • New Jersey Man Indicted in Fraud Scheme to Steal California Unemployment Insurance Benefits

    For Information Contact

    Public Affairs (202) 254-4100

    For Immediate Release

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    SACRAMENTO, Calif. — A federal grand jury returned a 15-count indictment today against Eric Michael Jaklitsch, 40, of Elizabeth, New Jersey, charging him with wire fraud and aggravated identity theft, U.S. Attorney Phillip A. Talbert announced.

    On Dec. 8, 2021, Jaklitsch was arrested on a federal criminal complaint at his home in New Jersey. He made his initial appearance in the District of New Jersey and was ordered detained for transport to the Eastern District of California.

    According to court documents, between October 2020 and December 2021, Jaklitsch executed a scheme to defraud the California Employment Development Department (EDD) by filing at least 78 fraudulent unemployment insurance claims with EDD, seeking Pandemic Unemployment Assistance and other benefits under the Coronavirus Aid, Relief, and Economic Security (CARES) Act. During the scheme, Jaklitsch collected personal identifying information of numerous individuals — including names, birth dates, and Social Security numbers — and used their identities to file fraudulent unemployment insurance claims. The filings represented, among other things, that the claimants had recently lost employment or were unable to find employment due to the COVID-19 pandemic. These unemployment insurance claims were fraudulent because, for example, the claimants were not unemployed, they were not eligible for California unemployment insurance benefits, or Jaklitsch did not have authority to file claims on their behalf.

    Since at least October 2021, EDD has partnered with ID.me — a private company used by the EDD for ID verification of claimants — to implement a system for verifying claimant identities before EDD can process unemployment insurance claims. An internal investigation conducted by ID.me identified Jaklitsch as a person conducting a fraud scheme and referred the case to federal law enforcement. In executing his fraudulent scheme, Jaklitsch also submitted false information to ID.me that allowed his fake and stolen identities to be verified. This false information included images of fake driver’s licenses that contained photos of Jaklitsch and the names of the purported claimants. He also submitted live photos of himself that were used to verify the photos on the fake driver’s licenses. Once these false identities were verified, Jaklitsch filed the fraudulent unemployment insurance claims with EDD under the same identities. In executing his fraudulent scheme, Jaklitsch also submitted false information to ID.me that allowed his fake and stolen identities to be verified. This false information included images of fake driver’s licenses that contained photos of Jaklitsch and the names of the purported claimants. He also submitted live photos of himself that were used to verify the photos on the fake driver’s licenses. Once these false identities were verified, Jaklitsch filed the fraudulent unemployment insurance claims with EDD under the same identities.

    In the fraudulent unemployment insurance applications, Jaklitsch requested that the unemployment insurance benefits be mailed to various addresses under his control, including his residence in New Jersey. EDD approved dozens of the fraudulent claims and authorized Bank of America to mail out EDD debit cards containing unemployment insurance benefits. Jaklitsch then activated the EDD debit cards and used them to withdraw the benefits at ATMs throughout New Jersey. The scheme sought over $2,500,000 in unemployment insurance benefits and caused EDD and the United States to incur actual losses exceeding $900,000.

    This case is the product of an investigation by the Federal Bureau of Investigation, the Department of Labor – Office of the Inspector General, the Department of Homeland Security – Office of the Inspector General – Covid Fraud Unit, and the California Employment Development Department (EDD) – Investigation Division. Assistant U.S. Attorney Robert J. Artuz is prosecuting the case.

    If convicted, Jaklitsch faces a maximum statutory penalty of 20 years in prison and a $250,000 fine on each of the 14 wire fraud counts. He also faces a two-year mandatory prison sentence if convicted of aggravated identity theft, which must run consecutive to any sentence received on the wire fraud counts. Any sentence, however, would be determined at the discretion of the court after consideration of any applicable statutory factors and the Federal Sentencing Guidelines, which take into account a number of variables. The charges are only allegations; the defendant is presumed innocent until and unless proven guilty beyond a reasonable doubt.

    DHS Agency
  • Former Acting Inspector General for the U.S. Department of Homeland Security Pleads Guilty to Scheme to Defraud the U.S. Government

    For Information Contact

    Public Affairs (202) 254-4100

    For Immediate Release

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    Charges Involve Theft of Proprietary Software

    A former Acting Inspector General for the U.S. Department of Homeland Security, Office of Inspector General (DHSOIG)
    pleaded guilty today to federal charges stemming from the theft of proprietary software and sensitive databases
    from the U.S. government.

    According to court documents, Charles K. Edwards, 61, of Sandy Spring, Maryland, executed a scheme to steal
    confidential and proprietary software from the government. Edwards worked for DHS-OIG from February 2008 until
    December 2013, including as Acting Inspector General. Prior to DHS-OIG, he worked at the U.S. Postal Service Office
    of Inspector General (USPS-OIG). At both agencies, Edwards had access to software systems, including one used for
    case management and other systems holding sensitive personal identifying information of employees.

    After leaving DHS-OIG, Edwards founded Delta Business Solutions Inc., located in Maryland. From at least 2015 until
    2017, he stole software from DHS-OIG, along with sensitive government databases containing personal identifying
    information of DHS and USPS employees, so that his company could develop a commercially-owned version of a case
    management system to be offered for sale to government agencies.

    Edwards pleaded guilty in the U.S. District Court for the District of Columbia to conspiracy to commit theft of
    government property and theft of government property. A second defendant in the case, Murali Y. Venkata, 56, of Aldie,
    Virginia, has pleaded not guilty to charges and his case remains pending. Edwards will be sentenced at a later date. A
    federal district court judge will determine any sentence after considering the U.S. Sentencing Guidelines and other
    statutory factors.

    Assistant Attorney General Kenneth A. Polite Jr. of the Justice Department’s Criminal Division, U.S. Attorney Matthew
    M. Graves for the District of Columbia, Inspector General Dr. Joseph V. Cuffari of DHS-OIG and Inspector General
    Tammy Whitcomb of USPS-OIG made the announcement.

    Senior Litigation Counsel Victor R. Salgado of the Criminal Division’s Public Integrity Section and the Public Corruption
    and Civil Rights Section of the U.S. Attorney’s Office for the District of Columbia are prosecuting the case.
    An indictment is merely an allegation, and Venkata is presumed innocent until proven guilty beyond a reasonable doubt
    in a court of law.

    DHS Agency
  • Independent Auditors' Report on DHS' FY 2021 Financial Statements and Internal Control over Financial Reporting

    Executive Summary

    KPMG LLP (KPMG), under contract with the Department of Homeland Security Office of Inspector General, conducted an integrated audit of DHS’ fiscal year 2021 consolidated financial statements and internal control over financial reporting.  KPMG issued an unmodified (clean) opinion on the financial statements, reporting that they present fairly, in all material respects, DHS’ financial position as of September 30, 2021.  However, KPMG identified material weaknesses in internal control in two areas and other significant deficiencies in four areas.  Consequently, KPMG issued an adverse opinion on DHS’ internal control over financial reporting.  KPMG also reported noncompliance with two laws and regulations.  KPMG made 19 recommendations to improve the Department’s internal control over financial reporting.

    Report Number
    OIG-22-08
    Issue Date
    Document File
    DHS Agency
    Fiscal Year
    2022
  • FLETC's Actions to Respond to and Manage COVID-19 at its Glynco Training Center

    Executive Summary

    FLETC implemented robust protocols to respond to and mitigate COVID-19 at its Glynco training facility.  Before reopening in June 2020, FLETC developed a formal plan to resume in-person training.  Through this plan, along with other policies and procedures, FLETC established protocols in accordance with Centers for Disease Control and Prevention guidance and medical expertise.  DHS students and component officials we spoke with confirmed that these protocols were in place and told us that, overall, they were effective.  However, they also raised concerns related to students socializing inappropriately, and not following some requirements such as mask-wearing.  In instances such as these, FLETC was largely reliant on students’ home agencies to take action to reinforce compliance among their students with safety protocols, or to take disciplinary action, if necessary.  As a result of its measures, FLETC’s rate of positive COVID-19 tests was lower than that of its surrounding county.  We also found, however, that FLETC did not always follow its own protocols for housing assignments related to COVID-19.  For example, some students who were not positive for COVID-19 or were not quarantined for exposure to COVID-19 were still housed in the isolation dormitory.  Some of the students we spoke with who were incorrectly assigned to the isolation dormitory told us that they did not feel safe.  We made one recommendation to the FLETC Director to improve COVID-19 student-housing protocols.  FLETC concurred with the recommendation. 

    Report Number
    OIG-21-73
    Issue Date
    Document File
    DHS Agency
    Fiscal Year
    2021
  • Evaluation of DHS' Information Security Program for Fiscal Year 2020

    Executive Summary

    In May 2020, the Deputy Under Secretary for Management formally documented the Department’s risk acceptance to allow the Coast Guard to meet FISMA requirements according to Department of Defense, rather than DHS’ reporting requirements.  The Deputy Under Secretary for Management’s decision adversely affected our ability to evaluate the Department’s enterprise-wide information program under this year’s OIG reporting metrics.  Nonetheless, when evaluating the overall effectiveness of DHS’ information security program for FY 2020 FISMA, our rating does not include the Coast Guard.  DHS’ information security program earned a maturity rating of “Managed and Measurable” (Level 4) in three of five functions.  DHS can further improve the effectiveness of its information security program by ensuring components execute all its policies and procedures.  We made four recommendations in our report, with one to the DHS Chief Information Officer, one to the S&T Chief Information Officer, one to the Secret Service Chief Information Officer, and one to the FEMA Chief Information Officer.  The Department concurred with all four recommendations.

    Report Number
    OIG-21-72
    Issue Date
    Document File
    DHS Agency
    Fiscal Year
    2021
  • The Office of Inspector General Completes Investigation of Mexican National who Died in U.S. Border Patrol Custody in El Paso, TX

    For Information Contact

    Public Affairs (202) 254-4100

    For Immediate Release

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    The Department of Homeland Security (DHS) Office of Inspector General (OIG) initiated an investigation after information was received from the U.S. Customs and Border Protection, Office of Professional Responsibility that a Mexican national passed away from medical related issues. The individual was apprehended by the U.S. Border Patrol in El Paso, TX, on March 17, 2019, was transferred to Las Palmas Medical Center on the evening of March 17, 2019, and died on March 18, 2019.

    DHS OIG reviewed video from the Paso del Norte Processing Center and interviewed undocumented noncitizens, Border Patrol Agents, medical personnel, and Emergency Medical Technicians to ascertain the circumstances surrounding the individual’s death.

    The County of El Paso, Office of the Medical Examiner and Forensic Laboratory deemed that the individual died of natural causes, and cited streptococcus pneumonia and influenza A/H3 pneumonia with hypertensive cardiovascular disease as a significant contributing factor.

    During the course of our investigation, we found no evidence that actions taken by DHS personnel or contractors contributed to the death of the individual.

    For more information visit our website, www.oig.dhs.gov

    DHS Agency