US accuses firm that vetted Snowden of fraud

Former National Security Agency systems analyst Edward Snowden in a video released by WikiLeaks Oct. 11, 2013.
Former National Security Agency systems analyst Edward Snowden in a video released by WikiLeaks Oct. 11, 2013.

WASHINGTON — The company that handled a background check on National Security Agency leaker Edward Snowden allegedly defrauded the 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, US Investigations Services Inc., sent to the government over a four-year span, continuing through at least September 2012.

US Investigations was involved in a background investigation of Snowden in 2011, but his particular job does not figure in the lawsuit.


In a statement, US Investigations 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.’’

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The statement said the company first learned of the allegations nearly two years ago and that US Investigations 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 US Investigations, which has 6,000 employees.

The government said that US Investigations 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.

US Investigations senior management ‘‘was fully aware of and, in fact, directed the dumping practices,’’ the government complaint said. Beginning in March 2008, US Investigations’s president and chief executive established revenue goals for the company. US Investigations’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 US Investigations 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, US Investigations 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.


The company is a contractor for the federal Office of Personnel Management, which is responsible for performing background investigations of current or prospective federal employees and contractors.

‘These allegations . . . are inconsistent with the strong service record we have earned since our inception.’

US Investigations concealed its dumping practices from the Office of Personnel Management, according to the government’s court papers.

In April 2011, the Office of Personnel Management raised concerns with US Investigations after tests showed that a large number of investigation reports were identified as complete when computer metadata revealed that the reports had never been opened by a reviewer. In a response to the federal agency, US Investigations falsely attributed the problems to a variety of software issues, said the Justice Department filing.

In addition, US Investigations ensured that all dumping practices stopped when Office of Personnel Management was on site conducting audits — and then resumed after federal auditors were gone, the government alleged.

‘‘Most of the September miss should ‘flush’ in October,’’ an e-mail from US Investigations chief financial officer said to the vice president of the investigative service division.

Initially, the Justice Department said, US Investigations would dump cases manually. Later, it began using a software that enabled it to identify a large number of background investigations, quickly make an electronic ‘‘Review Complete’’ notation and then give the cases to the government. Dumping, the Justice Department said, occurred daily.