USIS and Altegrity: Background Checks Submitted Without Required Quality Review

USIS and Altegrity agreed to forgo payment claims valued at least at $30 million to resolve allegations over background checks submitted without required quality review. The government alleged that USIS sent investigations to the Office of Personnel Management as complete before all their reports had received the promised review. For someone who knows how an investigation moved from fieldwork to review to release, that gap is the heart of the case.

The Justice Department announced the settlement on August 19, 2015. USIS performed background investigations under the agency’s fieldwork contracts, and Altegrity was its parent. The settlement’s value lay in giving up the right to collect money the companies said the agency owed them.

How Dumping and Flushing Worked

The government alleged that USIS bypassed required reviews and released cases as complete, a practice called “dumping” or “flushing” inside the company. Federal background investigations submitted without required quality review could bring in payments and contract incentives, according to the government’s account. It alleged that the deliberate bypass ran from at least March 2008 through at least September 2012 to increase revenues and profits.

An investigation case contained reports that required quality review. The Justice Department alleged that USIS represented cases as complete even though not all the reports in those cases had received that review. The Office of Personnel Management relied on those representations to issue payments and incentives it would otherwise have withheld, the government said.

The buyer was paying a company to investigate people, while allegedly having to trust an inaccurate account of the company’s own work.

The Review Was Part of What OPM Bought

The required quality review was part of the service USIS owed the Office of Personnel Management. USIS provided background-investigation services from its privatization in 1996 until September 2014. Those investigations concerned current and prospective federal employees.

This is the service-contract version of the government paying for something better than the contractor supplied. In the USIS allegations, having investigation reports ready did not mean the review of those reports was finished. The customer had purchased both the investigation and the required check on it.

For an insider, the point is the handoff: who treated the case as ready to leave the business while review work remained unfinished? Our work is to connect what happened at that handoff to the completion representation that supported payment. The allegation reached beyond the quality of an individual report to the company’s account of whether it had delivered the service it promised.

What Proof Do You Need as a Whistleblower?

For a background-investigation case like USIS, useful proof connects unfinished reviews with what the contractor told the government and the payments that followed. We work through the records behind those completion and payment claims with you, including the decisions behind them.

A former USIS executive brought the whistleblower case, and the United States joined it. Your knowledge of who could release a case, what reviewers were expected to finish and how completion was reported can show how the pieces fit. A contractor employee can know why the paperwork looks complete when the work behind it tells a different story.

The Settlement Gave up Money the Companies Wanted to Collect

The companies were in bankruptcy when they settled the False Claims Act allegations by surrendering claims for payments from the Office of Personnel Management. That agreement formed part of a broader settlement with the United States in the bankruptcy proceeding.

A whistleblower case under the False Claims Act can pay 15% to 30% of what the government recovers.

A Required Control Can Still Be Bypassed

A formal review requirement can exist while the work moves around it. That is the distinction a 2019 study in the Journal of Forensic and Investigative Accounting examined in occupational fraud: controls that are absent versus controls that people override.

Unique Characteristics of Management Override Fraud Cases compared those settings using fraud-examiner survey data. The paper put its finding about stronger anti-fraud environments plainly:

The study also points to management’s position in the business: the people who design and implement controls can be in a position to override them. It recommends attention to the authority and skills that let someone push past a control, including the ability to pressure others into violating policy.

That helps explain why an insider’s account matters when the government alleges deliberate circumvention, as it did at USIS. The useful question is who could move work past the control and what the customer was told afterward. A person who knows how work actually left the business can help us examine the decisions a formal review policy leaves out of view.

The Same Gap in Other Government Services

Foresee Results and Verint Americas faced allegations involving website assessments for the Interior Department’s Federal Consulting Group. The government alleged that they used a different method while representing that they used the American Customer Satisfaction Index methodology the contract called for. The agency had awarded a five-year contract in 2011 with that methodology as the expected basis for the assessments.

There, the alleged substitution concerned how an assessment was produced. At USIS, the alleged shortcut concerned whether the reports had passed the required review. In both accounts, the government’s purchase included a process the contractor represented it had followed.

UPS supplies a different comparison. In its domestic overnight-delivery case, which included General Services Administration contracts, the government alleged false scans, exception codes and performance reports concealed missed delivery commitments and impeded agency refunds. The performance record allegedly hid the government’s right to money back.

At USIS, the alleged completion representation helped obtain payment. At UPS, the alleged delivery records helped prevent refunds. Someone inside the business sees how the performance record is made, including decisions the contractor’s account to the government leaves out.

You Know What Happened Before Release

If you know how background-investigation cases reached the government before required reviews were finished, talk with our whistleblower experts about the work and decisions you saw. We build your strongest case with you and bring in federal procurement whistleblower lawyers who understand service-performance claims. We stay with you through the whole case, starting with the decisions behind those completion claims.