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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, U.S. Investigations Services Inc., sent to the government over a four-year span, continuing through at least September 2012.
USIS was involved in a background investigation of Snowden in 2011, but his particular job doesn't figure in the lawsuit.
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 CEO 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 CEO.
According to the complaint, USIS would dump reports of investigations knowing that there could potentially be quality issues associated with those reports.
"If the allegations are true, allowing somebody who is not qualified to access classified information is just simply awful, and is potentially dangerous," said Alexander Brittin, a government contracts attorney for the past 30 years. "If this company is not doing background checks correctly, who knows what's getting through?"
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.
USIS concealed its dumping practices from OPM, according to the government's court papers.
In April 2011, OPM raised concerns with USIS 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 OPM, USIS falsely attributed the problems to a variety of software issues, said the Justice Department filing.
In addition, USIS ensured that all dumping practices stopped when OPM was on site conducting audits — and then resumed after OPM's auditors were gone, the government alleged.
"Most of the September miss should 'flush' in October," an email from USIS's chief financial officer said to the vice president of the investigative service division.
Initially, the Justice Department said, USIS would dump cases manually. Later, it began using a software program called Blue Zone which enabled USIS 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.
Falls Church, Va.-based 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.
Associated Press writer Jack Gillum contributed to this report.