Security clearanceSecurity check firm USIS accepts $30 million fraud settlement

Published 20 August 2015

United States Investigations Services, the security firm which vetted Edward Snowden, has agreed to a fine of about $30 million to settle U.S. charges related to the way it conducted background checks on applicants for sensitive government jobs. The Justice Department said USIS engaged in practice internally called “dumping” or “flushing,” in which the company released the background checks of individuals to the U.S. Office of Personnel Management (OPM) and presented these cases as having been completed when, in fact, they were not.

United States Investigations Services, the security firm which vetted Edward Snowden, has agreed to a fine of about $30 million to settle U.S. charges related to the way it conducted background checks on applicants for sensitive government jobs.

The U.S. justice department yesterday (Wednesday) said that the settlement with USIS and its parent company, Altegrity Inc., addresses claims that USIS did not perform quality control reviews of its background investigations (see “Security check contractor defrauded U.S. of millions of dollars,” HSNW, 24 January 2014).

The Washington Business Journal reports that Altegrity filed for Chapter 11 in February, and the Justice Department said the settlement is part of the bankruptcy proceedings. The settlement resolves claims raised in a whistleblower lawsuit filed in 2011, which the Justice Department joined.

That case is note related to the background checks of Snowden, or Aaron Alexis, who killed twelve people at the Washington Navy Yard in 2014.

USIS had been the U.S. government’s largest private provider of security checks.

“Shortcuts taken by any company that we have entrusted to conduct background investigations of future and current federal employees are unacceptable,” Benjamin Mizer, head of the Justice Department’s civil division, said in a statement.

The Justice Department said that from March 2008 through at least September 2012, USIS circumvented quality reviews of completed background investigations in order to increase its profits. The Justice Department said USIS engaged in practice internally called “dumping” or “flushing,” in which the company released the background checks of individuals to the U.S. Office of Personnel Management (OPM) and presented these cases as having been completed when, in fact, they were not.

The Justice Department says that USIS received payments from the government for handling these cases even though, because the cases had not been completed, the company should not have been paid.

Under the settlement, Altegrity and USIS have agreed to give up payments, valued at least at $30 million, they claimed they were owed by OPM.

In 2011 a former USIS executive, Blake Percival, filed a suit against the company under the False Claims Act, in which he revealed the company’s fraudulent practices.