oversight

Fraud Indictment for Legal Center California, July 12, 2001

Published by the Department of Education, Office of Inspector General on 2001-07-12.

Below is a raw (and likely hideous) rendition of the original report.

OIG Investigative Reports, Hermandad Legal Center Indicted on Charges of Defrauding Government by Overbilling for Services
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PRESS RELEASE:
Central District of California, CA July 12, 2001
Thomas Mrozek, Public Affairs Officer:
(213) 894-6947
thom_mrozek@usdoj.gov
Hermandad Legal Center Indicted on Charges of Defrauding Government by Overbilling for Services
A non-profit community-based organization that provided various services to the Latino community was Indicted today on six counts of defrauding the Government.
Hermandad Mexicana Nacional Legal Center was indicted today by a federal grand jury in Los Angeles. The six-count indictment alleges that Hermandad defrauded the Federal Emergency Management Agency and the United States Department of Education.
Hermandad was initially charged on June 21 in an indictment that alleged the agency committed mail fraud in relation to a contract it had with FEMA to provide services after the Northridge earthquake of 1994. The grand jury alleged that Hermandad submitted false time sheets relating to a grant it received to do crises counseling and community outreach after the earthquake. Hermandad allegedly submitted time sheets of individuals who had nothing to do with counseling or outreach activities, or, for that matter, anything to do with the project related to the earthquake. Those three counts are part of the new indictment returned today.
The remaining three counts of the indictment accuse Hermandad of making false statements in the jurisdiction of a federal agency. The charges relate to Hermandad's receipt of grant funds to provide adult education courses, including courses in adult basic education, English as a Second Language, and ESL	citizenship. The United States Department of Education grants that supplied the funding were administered by the California Department of Education.
The indictment alleges that Hermandad significantly misrepresented the number of hours students attended classes that it was teaching and the amount of program-related expenditures, For the three fiscal years beginning in July 1995 and ending in June 1998, Hermandad received grant funds of approximately $6,6 million, but the agency allegedly only spent approximately half of that on allowed program expenses.
If convicted of all six counts in the indictment, Hermandad could be sentenced to pay fines of up to $3 million and be required to pay full restitution.
This case is the result of an investigation by the United States Department of Education - Office of Inspector General, the Federal Bureau of Investigation, and the Federal Emergency Management Agency - Office of Inspector General.
Contact: Assistant United States Attorney Lee S. Arian (213) 894-0627
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Last Modified: 02/28/2005
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