Amtrak OIG Identifies Fraud Risks as Agency Begins Large Acquisitions and Infrastructure Programs

Jim Blaze photo

WASHINGTON – Amtrak’s Office of Inspector General released a report this week outlining fraud risks Amtrak could face as it leverages significant federal investments for major acquisitions and capital projects.

According to the report, historic levels of federal funding from the Infrastructure Investment and Jobs Act will, in part, advance the company’s long-term, large-scale infrastructure goals and significantly expand its traditional passenger rail operations mission to now include a major capital delivery mission. The sheer size and nature of this expansion will, however, increase the company’s fraud risk, the report said.

You can read the Amtrak OIG report here.

The report identified four high-risk fraud areas the company faces: contracts and procurements, health care, employee wrongdoing, and cybercrime. It includes examples of how such fraud manifests, and potential fraud mitigations for consideration. For example, the OIG’s prior work exposed contract steering and bid rigging schemes, overcharging by contractors, schemes in which employees conspired with doctors to bill Amtrak’s health care plan, employee theft, and cybercrimes involving Amtrak’s e-voucher program.

Amtrak OIG pointed out in another news release that “If history is any indicator, funding from the Infrastructure Investment and Jobs Act—like other large spending bills—will be targeted by criminals through a variety of unlawful fraudulent schemes.”

To develop the report, the OIG leveraged its experience from 99 fraud-related investigations and 22 audits conducted since 2017, as well as industry research on fraud schemes and best practices to prevent and detect fraud.

The OIG credits Amtrak for establishing its Integrated Risk and Compliance Program (IRCP) to monitor fraud risks and establish capabilities to proactively identify fraudulent activity. The report notes that the IRCP could bolster Amtrak’s enterprise-wide fraud defenses, a culture of integrity, and employee awareness of fraud schemes and indicators.

For its part, the OIG committed in the report to “aggressively continuing [its] oversight mission, which includes actively investigating and prosecuting fraud cases, identifying opportunities to improve related internal controls, and proactively sharing [its] insights on fraud risks for company consideration.”

Reports of fraud, waste, or abuse; criminal or unethical acts affecting Amtrak’s property or operations; or mismanagement in Amtrak programs or operations can be made 24 hours a day via the Amtrak OIG Hotline at 1-800-468-5469 or online at https://direc.to/hPAu.

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From the Editor: In the November 2021 issue of RT&S, I prepared an editorial on the need for dedicated funding for Amtrak and the need for the windfall of infrastructure money to be spent wisely. You can read that editorial here. I also expressed concern that if great care wasn’t taken, Amtrak could easily blow the money on misplaced priorities and shiny objects. That was my opinion. While the news story from Amtrak’s OIG is not an example of what I referred to in my editorial, it is a concern that’s been raised because Amtrak has so much money coming its way. DCL