Background check firm in hot water for 'flushing' records

Thursday - 1/23/2014, 1:29pm EST

The Justice Department has accused the company that performed background investigations of both National Security Agency leaker Edward Snowden and Navy Yard shooter Aaron Alexis of defrauding the government, making false statements and breach of contract.

DoJ's civil complaint filed Wednesday in U.S. District Court in Alabama alleges the company, which is the government's largest contractor for background-investigation services, submitted at least 665,000 background investigations to the Office of Personnel Management that hadn't been properly reviewed.

DoJ's complaint alleges the company began "dumping" or "flushing" cases — transmitting cases to OPM and falsely representing them as completed — in 2008 to maximize the company's revenues and profits. All told, 40 percent of the cases USIS submitted to OPM over a four-year period beginning in March 2008 were the result of "dumping," according to DoJ's most recent filing.

USIS, headquartered in Falls Church, Va., came under fire last year when it was revealed the company performed background investigations of both Snowden and Alexis. However, DoJ's complaint is not related to the investigation of either man.

In a statement provided to Federal News Radio, a USIS spokeswoman said the alleged conduct in DoJ's complaint "is contrary to our values and commitment to exceptional service." The company has appointed a new leadership team and increased oversight and is fully cooperating with the government's investigation, according to the statement.

USIS is the largest private supplier of background investigations for the federal government and has been performing work for OPM under a series of contracts since 1996.

DoJ: Senior management directed dumping

The dumping of cases was primarily undertaken by a USIS workload leader at the company's facility in western Pennsylvania, according to DoJ's complaint.

According to the filing, the work leader and other designated employees began dumping cases in March 2008 as a way to keep pace with internal company goals for submitting cases to OPM.


"Shelves are as clean as they could get. Flushed everything like a dead goldfish."

— May 25, 2010 email from USIS employee to the company's director of National Quality Assurance and the Quality Control Manager


Eventually, though, the practice became more frequent. USIS management upped its monthly goals, which in turn led to more dumping. The company even took to using a software program called "Blue Zone," which helped the company easily identify a large number of cases for dumping, according to the filing.

The filing also alleges that senior management at the company knew of the practice.

"USIS senior management was fully aware of and, in fact, directed the dumping practices," the filing states, citing internal company documents.

Internal emails show the the workload leader in western Pennsylvania would send email updates to supervisors detailing the number of cases transmitted to OPM by the company each day, which would often contain details about the number of cases that had been dumped.

For example, an April 2010 email from the workload leader to the company's director of national quality assurance, cited in the filing, stated: "Shelves are as clean as they could get. Flushed everything like a dead goldfish."

DoJ's complaint contains a slew of internal emails suggesting that dumping cases was a frequent and accepted practice at the company.

An Oct. 2010 email again from the workload leader to the director of national quality assurance stated: "t'is Flushy McFlushershon at his merry hijinks again!! **leprechaun dance**...I'm not tired..."

Another email sent in late December 2010 referenced "Dick Clark's Dumpin' New Year's Eve" and stated: "Have a bit of a backlog building, but fortunately, most people are off this week so no one will notice."

DoJ: 40 percent of cases dumped

The filing also alleges that the high-level officials sought to conceal the company's dumping practices from OPM.

OPM became concerned in April 2011 with the substantial number of cases being submitted by a small group of USIS employees, according to the filing. A data review conducted by the agency that month also showed that a large number of cases were coming into OPM with the label of "Review Complete," even though metadata analysis showed that the cases had never been opened by a USIS reviewer. After OPM sent a letter to the company outlining these concerns, USIS's response — signed by USIS' vice president of field operations — blamed the issues on software glitches, according to the suit.


t'is Flushy McFlushershon at his merry hijinks again!! **leprechaun dance**...I'm not tired...

— Oct. 29, 2010 email from USIS employee to to the company's director of National Quality Assurance and the Quality Control Manager


USIS also held off on dumping cases when OPM conducted on-site visits. The filing cites an October 2011 email from the president of USIS Investigative Services Division to USIS' president and CEO and chief financial officer showing concern about the company's dumping practices while OPM was on the company's premises conducting an audit.

All told, USIS submitted at least 665,000 background investigations to OPM between March 2008 and September 2012 that were falsely represented as complete when, in fact, they hadn't received proper review, according to the suit.

That's about 40 percent of the total background investigations conducted by USIS during that time and includes investigations of current and potential employees at most government agencies including the departments of Justice, Health and Human Services, Homeland Security and Defense.

Last October, the Justice Department joined a whistleblower lawsuit filed by former USIS employee Blake Pervical under the federal False Claims Act.

Under the act, the company is liable for three times the amount of damages sustained by the company plus a penalty.

The amount OPM paid per completed background investigation varied from $95 to $2,500 depending on the type of investigation. USIS also received bonus payments in 2008, 2009 and 2010 totaling more than $11.7 million for meeting OPM's goals for timeliness, quality and program management.

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