Artist’s rendering of WGS-11+

Air Force Office of Special Investigations

The Air Force Office of Special Investigations here at Patrick Space Force Base and Cape Canaveral needs your help in identifying and reporting fraudulent activities.

Aside from the general crime, counterintelligence, research and technology protection missions, a significant amount of OSI’s resources are assigned to investigate and counter fraud within our weapon systems and programs.

We’ve all heard of fraud, but would you really know what it is if you saw it and, if so, do you know how to report it? Let’s start off with the definition.

What is fraud?

Fraud is defined as the crime of obtaining money or some other benefit by deliberate deception, usually for financial gain. Simply put, fraud is theft.

Unfortunately, it’s not always going to be that simple or obvious. Fraud comes in many forms (schemes) and can often be difficult to identify. A few examples of these schemes are:

• Public corruption (bribery)
• Product substitution
• Cost mischarging
• Defective pricing

These can be complicated and are often concealed. Perpetrators of fraud often go to great lengths to carry out their actions without alerting co-workers or authorities to their misdeeds.

In order to help you become more aware of what to look for, the following are some indicators of these schemes:

Public corruption (bribery) - Involves unnecessary or inappropriate purchases; questionable, improper or repeated selection of a particular supplier; unexplained increase in wealth standard of living by officials; and/or questionable, undocumented or frequent change orders awarded to a particular contractor.

Product substitution - Could include an above average number of test or operations failures, early replacements, or high maintenance and repair costs. Other signs may include product tests performed or compliance certificates signed by unqualified or inappropriate personnel, test records reflect no failures, contractor selects samples for testing programs, photocopies submitted to government offices rather than originals, altered invoice or test records, or improper sourcing for materials.

Cost mischarging - Can occur through shifting various costs associated to a contract (labor, overhead, fringe benefits, etc.) to another portion of a contract or another contract the contractor has with the USG. Other signs include observing a difference between initial billings for actual material and the agreed upon cost, poor documentation, illegible copies of supporting documentation for costs incurred, an increase in labor hours with no corresponding increases in materials used or units shipped, and charging costs to the buyer as warranty costs for the correction of a known defect.

Defective pricing - Happens when there is a discrepancy between quoted prices and actual prices; different people work on the contract than are named in the proposal or contract; materials, supplies and components used in production are different from those actually used in the proposal or contract.

Now that you have a general understanding on how to detect fraudulent activities, how can you report fraud or other criminal activity?

How can you report it?

Contact AFOSI, Detachment 802 at 321-213-8482 or email AFOSI.FRAUD.TIPLINE@us.af.mil.