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We summarized what we have determined to be the most significant management and performance challenges facing the DOI for FY 2022.
We audited costs claimed and grant compliance by the Mississippi Department of Marine Resources under grants awarded by the FWS.
LAS VEGAS – A former Special Agent assigned to the U.S. National Park Service, Lake Mead Resident Office in Boulder City, Nev., was sentenced today by U.S. District Judge Jennifer A. Dorsey for submitting false information about his work experience and education on his job application for a federal law enforcement officer position.
Daniel Joshua Carnow (46) pleaded guilty in June 2022 to false official writing. He was sentenced to one year probation, a $500 fine, and a restriction barring him from future employment as a federal law enforcement officer.
According to court documents, in April 2019, Carnow was a federal law enforcement officer with the U.S. Department of Homeland Security’s Immigration Customs Enforcement. He applied for a Special Agent position with the U.S. Department of the Interior’s National Park Service. As part of his application, he misrepresented on his resume that he had served as a Special Agent with the U.S. Department of State (DOS), Foreign Service Diplomatic Security Services (DSS), and that he had earned a Master of Forensic Science degree from the University of Central Oklahoma.
“Public service is a public trust and deceitfulness committed by law enforcement officers’ is especially egregious,” said Jamie DePaepe, Special Agent in Charge for the Office of Inspector General for the U.S. Department of Interior (DOI OIG). “Acts such as the conduct in this case also undermine the nation’s trust of law enforcement. By his actions that led to today’s sentencing, the defendant violated and undermined that trust. The OIG will remain steadfast in our efforts to investigate individuals who prove themselves unworthy of public service.”
U.S. Attorney Jason M. Frierson for the District of Nevada and Special Agent in Charge Jamie DePaepe for the DOI OIG made the announcement.
This case was investigated by the DOI OIG and the National Park Service – Office of Professional Responsibility. Assistant U.S. Attorney Steven Myhre prosecuted the case.
Anyone with knowledge of fraud, waste, abuse, misconduct, or mismanagement involving the DOI should file a complaint with the OIG at: www.doioig.gov/hotline.
We recommended the NPS obtain updated guidance on its authority to provide LWCF grants specifically program administration costs.
Today, the Council of the Inspectors General on Integrity and Efficiency (CIGIE) honored three teams and one individual from the U.S. Department of the Interior (DOI) Office of Inspector General (OIG) at the 25th Annual CIGIE Awards Ceremony. Featuring Interior Secretary Deb Haaland as this year’s keynote speaker, the annual awards ceremony honors exceptional work across the Federal inspector general community from the prior year.
“I am immensely proud of our teams for the honor and recognition that they are receiving today,” said Inspector General Mark Lee Greenblatt. “These prestigious awards highlight the fair, independent, and objective oversight that DOI OIG employees conduct on behalf of the American public and the positive changes that we are promoting in the Department of the Interior across a wide-ranging array of programs. Today’s awards honor teams in different disciplines and in different field offices, which reflects the high-quality work and talented professionals throughout our team.”
This year’s DOI OIG award winners are:
Office of National Resources Revenue Royalty Reporting and Adjustments Audit Team (Award for Excellence – Audits)
DOI collects billions of dollars annually from Federal oil and gas royalty revenue, one of the most significant nontax revenue generators for the U.S. Treasury. Oil and gas companies may reduce the amount owed by submitting royalty reporting “adjustments.” In its January 2022 audit, Better Internal Controls Could Ensure Accuracy of the Office of Natural Resources Revenue’s Royalty Reporting and Adjustments, the DOI OIG team identified improvements needed to strengthen internal controls over the adjustment process. Once implemented, the improved internal controls will, in turn, lower the risk of lost Federal revenue.
Office of Hopi and Navajo Indian Relocation Evaluation Team (Award for Excellence – Evaluations)
The DOI OIG team is being recognized for its substantive and meaningful achievements in assisting Congressional, Office of Management and Budget, and DOI decision makers plan for the future of the Office of Navajo and Hopi Indian Relocation (ONHIR). ONHIR is an independent Federal agency responsible for implementing the relocation of Navajo people and Hopi people living within each other’s boundaries as a result of U.S. Government partitioning of tribal land, pursuant to the Navajo-Hopi Land Settlement Act of 1974. Nine reports produced by this team provided critical information regarding an agency that has no inspector general of its Own, and thereby significantly enhanced Congress’ ability to enact legislation and perform oversight.
Lafayette Park Review Team (Award for Excellence – Investigations)
This special investigative review, Review of U.S. Park Police Actions at Lafayette Park, comprehensively examined the actions of the U.S. Park Police (USPP) in response to the protests in Lafayette Park in June 2020. The DOI OIG team provided a thorough, objective record of USPP’s decision making and operations, including a detailed timeline of relevant actions and an analysis of whether the USPP’s actions complied with governing policies.
Jeremy Spears, CIGIE Data Act Working Group Member (Award for Excellence – Audit)
DOI OIG auditor Jeremy Spears was a member of the CIGIE Data Act Working Group’s Common Methodology Subgroup that is being recognized with an Audit Award for Excellence. This multi-agency team’s pioneering efforts improved the quality, accuracy, and visibility of Government spending data, and identified efficiencies for pandemic-related spending and other Government-wide initiatives.
For more information about CIGIE and the role of Inspectors General in promoting efficiency and effectiveness and addressing fraud, waste, and abuse, visit the CIGIE website at www.ignet.gov.
For more information about DOI OIG, visit www.doioig.gov.
We audited costs claimed and grant compliance by the Texas Parks and Wildlife Department under grants awarded by the FWS.
We determined that the Three Affiliated Tribes did not follow applicable requirements in an agreement with the BIA.
We audited three grant agreements the BIE and BIA awarded to the Turtle Mountain Band of Chippewa Indians between July 2017 and June 2019.
The DOI has made progress in meeting 10 of the 13 Geospatial Data Act requirements we reviewed but we found areas for improvement.
Acting United States Attorney Nicholas Vassallo announced today that two men were sentenced to prison after being convicted of fraud and identity theft crimes arising from a securities fraud involving NuTech Energy Resources Inc. The sentencing hearing took place on August 22, 2022, before United States District Court Judge Alan B. Johnson. JUSTIN WALLACE HERMAN, age 51, of Canonsburg, Pennsylvania, was sentenced to serve a total of 87 months in prison with three years of supervised release and was further ordered to pay a $700 special assessment and $158,878.86 in restitution. CHARLES “CHUCK” WINTERS, JR., age 61, of Bradenton, Florida, was sentenced to serve a total of 54 months in prison with three years of supervised release and was ordered to pay a $500 special assessment and $158,878.86 in restitution. Herman and Winters were convicted by a jury of conspiracy, securities fraud, and aggravated identity theft on October 8, 2021, following a 3-week trial in the United States District Court for the District of Wyoming.
According to court documents and evidence presented at trial, Herman and Winters conspired to “pump and dump” the common stock of NuTech Energy Resources. A “pump and dump” is a form of securities fraud where the conspirators manipulate demand for a stock and the stock’s price, and then sell their worthless shares of the stock to the public at the artificially high price. In this case, the conspirators bought control of a publicly traded shell company called EcoEmissions Solutions Inc. in January 2015 and changed the company’s name to NuTech Energy Resources. The company’s stock then was sold under the ticker symbol NERG. The conspirators released information online to portray NuTech as a company located in Gillette, Wyoming, that was operating gas wells using a patented technology. In reality, NuTech had no business, no revenue, and no paid employees in Wyoming or elsewhere. Herman and Winters used altered, backdated and forged documents to acquire 13 billion free-trading shares of NuTech common stock. Herman, Winters, and their co-conspirators then artificially inflated the market price of NuTech common stock by manipulative trading and by releasing to the public false and misleading information about NuTech’s stock and business. The false promotional information included a website, press releases, and emails containing misleading information about the company. When the market price increased based on this false information, the conspirators sold their worthless NuTech shares to innocent investors in the public market, including investors in the United States and other countries. This fraud caused over $1.5 million in aggregate losses to investors.
Co-defendant Robert “Bob” Mitchell was charged with Herman and Winters. Mitchell pled guilty to mail fraud and conspiracy to commit securities fraud and was sentenced in October 2021 to 65 months in prison for his role in the NuTech fraud and a related investment fraud. Florida attorney Ian Horn was charged and tried with Herman and Winters. Horn was acquitted of fraud crimes but convicted of perjury for making a material false statement while testifying before the grand jury investigating the NuTech fraud. In January 2022, Horn was sentenced to two years’ probation with six months’ home confinement and fined $5,000.
“The convictions and sentences imposed on the defendants are the result of a six-and-a-half-year investigation and prosecution, involving multiple federal law enforcement agencies, that showed these defendants defrauded investors in Wyoming and around the world,” said Acting United States Attorney Nicholas Vassallo. “Our securities laws are designed to give investors the truthful disclosures they need and deserve to make their individual investment decisions. These sentences send a clear message that defrauding investors and undermining faith in our Nation’s securities markets by manipulating markets and disseminating false information about a stock will be investigated thoroughly and punished severely.”
“The sentences imposed on defendants Herman and Winters serve as a fitting capstone to a lengthy investigation and prosecution of a complex scheme,” said Ruth Mendonça, Inspector in Charge of the Denver Division of the U.S. Postal Inspection Service, which includes Wyoming. “We hope that anyone who considers using the U.S. Mail to further their criminal schemes looks to this case as an example of the effort the U.S. Postal Inspection Service will devote to protecting the U.S. Mail. Together with the Department of Justice and our federal, state, and local law enforcement partners, we will bring cases worthy of lengthy federal prison sentences,” said INC Mendonça.
Ron Gonzales, Special Agent in Charge for the Interior Department Office of Inspector General’s Energy Investigations Unit stated, “The convictions resulting from this joint investigation are an excellent example of multiple federal law enforcement agencies working with the Department of Justice, collaboratively and effectively, to ensure that individuals who victimize private citizens and government programs are held accountable for their illegal conduct."
This case was investigated by the U.S. Postal Inspection Service and the U.S. Department of Interior’s Office of Inspector General. Assistant United States Attorney Eric Heimann and former Assistant United States Attorney Thomas Szott prosecuted the defendants. The Criminal Prosecution Assistance Group of the Financial Industry Regulatory Authority (FINRA) provided invaluable assistance in the investigation and prosecution.