Using extraordinary secretive sleuthing techniques, the Commerce Department’s Inspector General concluded that thousands of employees in the federal Patent and Trademark Office scammed taxpayers of at least $18.3 million – and probably a lot more -- by falsely claiming nearly 289,000 hours of work they never put in.
The 15-month probe in late 2014 and 2015 was described in a new IG report on Wednesday. The investigation involved a “minute-by-minute” review of workers’ time sheets, turnstile badge swipes, work and home computer logins and other means of determining whether they actually worked the hours they claimed. The fraudulent activity was carried out by workers both from home under a tele-work policy and at the agency’s headquarters in suburban Virginia.
The USPTO is the federal agency responsible for granting U.S. patents and registering trademarks. It also advises the president, the secretary of commerce, and U.S. government agencies on intellectual property policy
The probe stemmed from an earlier report in August 2015 that an unidentified patent and trademark examiner received $25,500 by falsely claiming to have worked at least 730 hours in fiscal 2014. That finding immediately raised questions about the quality of the agency’s internal controls and whether the fraudulent activity was much more widespread.
To find the answers, investigators in the inspector general’s office undertook a comprehensive review of data related to more than 8,400 of the office’s 10,000 workers, covering both nine and 15-month periods. Investigators identified 288,479 unsupported hours of work claimed.
The report said that investigators adopted “a conservative approach” in weighing the evidence, in order to give the targeted employees the benefit of the doubt. “Based on certain examiner records, however, the OIG found that the total unsupported hours over the 9- and 15-month periods could be twice as high as reported in this investigation,” the report stated.
The report offers an array of recommendations for cracking down on future time sheet fraud. However, the IG did not treat this as a criminal investigation and has not referred the findings to the Justice Department for any criminal action.
Part of the reason for that is that federal officials are restricted under the Computer Matching and Privacy Protection Act of 1988 from comparing multiple datasets to identify misconduct by employees and pursue either criminal or administrative action.
“The USPTO takes its obligation to meet our critical missions very seriously,” Patrick Ross, the agency’s communications director, said in a statement. “We appreciate the work of the Department of Commerce’s Office of Inspector General (OIG), as we continue to focus on time and attendance compliance among USPTO employees. This report serves as a resource in our ongoing efforts to improve.”
Ross also noted that the fraud uncovered amounted to just two percent of the total hours claimed by the examiners – and that percentage “continued to shrink following the introduction of new USPTO controls and during the IG review.”