Snowden background check company accused of defrauding gov't

WASHINGTON -- The company that handled a background check on National Security Agency leaker Edward Snowden allegedly defrauded the U.S. government by submitting at least 665,000 investigations that had not been properly completed, and then tried to cover it up when the government suspected what was going on.

The number of investigations, the Justice Department said Wednesday in a civil complaint, amounts to 40 percent of the cases that the company, U.S. Investigations Services Inc., sent to the government over a four-year span, continuing through at least September 2012.

In a statement, USIS said "these allegations relate to a small group of individuals over a specific time period and are inconsistent with the strong service record we have earned since our inception in 1996."

The statement said the company first learned of the allegations nearly two years ago and that USIS has appointed a new leadership team, enhanced oversight procedures and has fully cooperated with the government's investigation. The company said that "integrity and excellence are core values" at USIS, which has 6,000 employees.

The government said that USIS engaged in a practice known inside the company as "dumping" or "flushing." It involved releasing uncompleted background cases to the government and representing them as complete in order to increase revenue and profit.

The government paid the company $11.7 million in performance awards from 2008 to 2010, according to the Justice Department court filing.

USIS senior management "was fully aware of and, in fact, directed the dumping practices," the government complaint said. Beginning in March 2008, USIS' president and chief executive established revenue goals for the company. USIS's chief financial officer determined how many cases needed to be reviewed or dumped to meet those goals, the complaint added.

The number of cases that needed to be reviewed or dumped to meet revenue goals was conveyed to the firm's vice president of field operations and to the president of investigative service division, the complaint said.

According to one internal company document, a USIS employee said, "They will dump cases when word comes from above, such as from" the president of the investigative service division and the president and chief executive.

According to the complaint, USIS would dump reports of investigations knowing that there could potentially be quality issues associated with those reports.

The background investigations that were dumped spanned most government agencies - including the Justice Department, the Department of Homeland Security, the Defense Department, the Defense Intelligence Agency, the Department of Health and Human Services, the Transportation Department and the Treasury Department.

The background investigations involved checks of applicants' credit histories, legal records and checks of government agency files such as FBI files and fingerprint records. The investigations also included interviews of employers and co-workers and others associated with the subject of the investigation.

USIS concealed its dumping practices from OPM, according to the government's court papers.

USIS conducts hundreds of thousands of background checks for government employees and has more than 100 contracts with federal agencies. One employee it screened was Aaron Alexis, the gunman accused of killing 12 people and himself at the Washington Navy Yard last September. Alexis had been given a security clearance in 2008.