State Auditor, U.S Attorney, other entities gather to announce nearly $1 million uncovered in an ongoing fraud investigation (2024)

CHARLESTON, W.Va. — West Virginia has recently made a nearly $1 million dollar recovery of funds that had previously been stolen from the state amid an ongoing check fraud investigation.

State Auditor J.B. McCuskey and United States Attorney for the Southern District Will Thompson were joined by West Virginia State Police and representatives from Truist Bank Friday at the state capitol for a news conference regarding the successful recovery efforts.

The check fraud scheme remains under investigation, but through the collaborative efforts made by the State Auditor’s Office, the Treasurer’s Office, the U.S Attorney’s Office, the Governor’s Office, West Virginia State Police Bureau of Criminal Investigators and Truist Bank, approximately $966,083.04 has thus far been recovered and deposited back into a state account.

McCuskey said through this collaboration of entities, they are making sure money coming into the state is going exactly where it’s supposed to go.

“In a world where fraud is running rampant, nothing is more important than having a coalition of law enforcement, be it the U.S Attorney’s Office, State Police, or our Public Integrity and Fraud Unit working hand-in-hand to make sure all of the citizen’s dollars are protected,” McCuskey told MetroNews.

McCuskey said the case involves two checks in question totaling roughly $1 million that had been mailed to a vendor in Texas. They were sent to a Department of Health and Human Resources vendor as part of a Medicaid contract, but at some point, fell into the hands of some bad actors.

However, he said they were very quickly able to identify that the checks were not deposited into the vendor’s account, thus beginning the investigation.

So far, the amount recovered in the ongoing investigation represents roughly 85% of what is owed to the vendor.

U.S Attorney Will Thompson said it involves a check washing scheme where the payee’s name on the check was washed off using a chemical agent and a new payee was put in their place on the check.

Thompson said it’s a particular fraud tactic that’s happening more and more.

“It’s pretty prevalent, it has been increasing in recent years, and it’s a situation where we’re not only seeing states being defrauded but corporations and private individuals,” he said.

However, he said while it is happening to individual people, fraud schemes like this one typically occur across a larger platform.

State Auditor, U.S Attorney, other entities gather to announce nearly $1 million uncovered in an ongoing fraud investigation (2)

Will Thompson

“I’m aware of some individuals who’s checks have been stolen and the payee has been wiped out, however, most of the fraudsters are looking at larger-scale like corporations or states, because, obviously the checks are generally larger,” said Thompson.

McCuskey said the Auditor’s Office formed the Public Integrity and Fraud Unit 7 years ago, and in doing so, they created the first-of-its-kind group that works with county prosecutors to prosecute government fraud on a large-scale.

He said so far, the unit has convicted and arrested a total of 46 people with fraud-related felonies and has more than 90 open ongoing cases.

McCuskey said while fraud and its prominence in the state has somewhat been overlooked throughout the years, the established coalition is now changing the game in fraud scheme accountability.

“For most of my lifetime, government fraud was at the bottom of the stack for county prosecutors, because they were dealing with murders, and rapes, and drug charges, and things that are a real public safety issue, but what we did was, we knew our prosecutors wanted to prosecute fraudsters but probably didn’t have enough time,” he said.

Fraud prosecution is a top matter in his office, Thompson said, as they work to try and prosecute as much fraud as possible, but it remains a difficult undertaking.

“It’s very time consuming, these investigations require a lot of work and prosecutors are dealing with very tough issues such as violent crime, drugs, things of that nature, some of which my office is dealing with, as well, but we are pretty well equipped to handle fraud cases, so I think the more we look into it the more fraud we will uncover,” said Thompson.

In addition, McCuskey said he has been pushing to eliminate check payments to vendors since he took office in 2017, because he said they pose a greater risk of fraud. Instead, he has been advocating for Electronic Fund Transfer (EFT) payments, which is a faster and more secure form of payment.

McCuskey said the state was issuing 22,000 checks to vendors per week on average when he took office, but now those checks being issued have been reduced to an average of just 9,000 per week.

The team is still working to recover all of the stolen funds in the particular fraud investigation announced Friday, so specific details in the case remain confidential. No arrests have yet been made.

State Auditor, U.S Attorney, other entities gather to announce nearly $1 million uncovered in an ongoing fraud investigation (2024)

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