U. S. Department of Transportation: Office of Inspector General Office of Investigations and Illinois Department of Tran

1. U. S. Department of Transportation: Office of Inspector General Office of Investigations and Illinois Department of Transportation: Financial Review and Investigation Section Office of Quality Compliance & Review Shah Engineering Inc. Todd Kath Special Agent Telephone 312-353-0106 Todd.O.Kath@oig.dot.gov Gene Gansz Supervisory Auditor Telephone 217-785-4592 Gene.Gansz@illinois.gov

2. Per FBI statistics dated between 2006 and 2008, the average dollar loss per offense for: • Identity theft was $6,383 • Car theft was $6,751 • Bank robbery was $4,854 • Burglary was $2,079

3. How would you like to end your career after you caught: • 1,481 Car Thieves, or • 1,566 Identity Thieves, or • 2,060 Bank Robbers, or • 4,810 Burglars???

4. You might think that this might be that retiree...

5. In reality it could be any one of you!!! • Program managers, • Project executives, • Contracting officials, • Analysts, • Engineers, • Attorneys, • Auditors, and • Law enforcement personnel • The Shah Engineering Inc. investigation resulted in a settlement of $10 MILLION .... equaling 4,810 burglars or 160 burglars per year for a 30 year career, nearly one burglar caught every other day.

6. Shah Engineering, Inc. (SEI) • Engineering firm located in Chicago, Illinois • Manu Shah was the sole shareholder and was solely responsible for the billing and management of contracts • SEI provided a full range of engineering and architectural services to public and private sector clients with over 20 years in Consulting/Engineering.

7. Illinois Department of Transportation (IDOT) Audit • January 12, 2004 – IDOT audit • Initial Conference/Conferences • Claimed no Job cost information • Partial records released to auditors • Field Testing • Timesheets unsigned or unapproved • Timesheet corrections not initialed • Shifting hours between jobs or office work • Invoices with little or no detail • Assets depreciated and leased by various Shah-owned companies • Employee lists did not match up with payroll summary

8. Example of shifting hours (with instructions)

9. No invoice support and child’s company

10. Payments to GCM at end of year (from warrant)

11. Illinois Department of Transportation (IDOT) Audit • January 12, 2004 – IDOT audit – Continued • Observations • Employee worker caught creating a timesheet • Blank timesheets found on copy machine • Related Companies – owned by children • Noticing number of alterations on timesheets • Accounting contact could not provide information without the owner’s review • Fresh copies of old invoices • Conclusion • Based on initial review, IDOT believed SEI had received in excess of $1,500,000 more than its entitlement and referred the audit to DOT/OIG, FBI, and the USAO

12. IDOT analysis of timesheet alterations

13. Search Warrant

14. Search Warrant • IDOT committed to work with investigators • IDOT gave detailed information on search sites • Simultaneous warrant of SEI corporate office and Manu Shah’s residence • Interviews of employees including Manu Shah at residence • IDOT auditors brought in to sites as experts • Identification of relevant paperwork

15. Investigation / Analysis • Investigation / analysis took approximately 2 years • Team Approach • IDOT audit spent time calculating amount of fraud versus normal audit adjustments • Agents used this information to extend the reach of the investigation • US Attorneys supported efforts with use of grand jury tools, subpoenas, immunity for non-targets • Interviews of relevant parties

16. Additional Documentation • Dozens of Subpoenas issued • Personal and corporate bank records • Review of banking/investment documents • Individuals for testimony under oath • Multiple transfers to friends, family, personal contacts • Checks endorsed by Manu Shah and deposited back into SEI or Manu’s accounts • Extensive transfers into trust accounts for tax and disadvantaged business enterprise (DBE) purposes

17. Investigation / Analysis • Obtained evidence of the following: • Mail Fraud, 18 U.S.C. § 1341 • Direct billing fraud • Overhead fraud • DBE certification • Money laundering, 18 U.S.C. § 1956 & 1957 • False documents / statements, 18 U.S.C. § 1001 • Witness tampering, 18 U.S.C., § 1512 • RICO, 18 U.S.C. § 1962 • Examples….

18. Original Invoice

19. Fake Invoice

20. SEI Outbound Check to Bipin

21. Manu’s Summary

22. SEI Inbound Checks from Bipin Total of $17,160.00

23. Summary of Dirigo Transactions

24. Original Invoice From Dirigo

25. Manu’s Fake Invoice

26. Investigative Results • Manu Shah • Pled to 2 counts of mail fraud • Inflated hours • False SEFC • Pled to 1 count of false statements* • Initial escrow of $5.5 million stock toward loss • Sentenced to 41 months in prison, starting August 20, 2009 • SEI • Pled to 1 count of mail fraud • $500,000 fine • Manu Shah and SEI debarred • $10 million restitution ordered to 12 State and municipal entities • Actual Overbilling as much as $12,366,947.45

27. Indictment --Count 2 …During the course of the audit, Manu Shah was requested to supply documentation for certain direct labor and overhead expenses claimed for IDOT and other contracts in prior years. On or about February 24, 2004, in the Central District of Illinois, MANU SHAH … submitted a false writing or document, knowing the same to contain a materially false, fictitious and fraudulent statement and entry including an invoice purportedly from “Associated Engineering and Technology,” which had been altered to read “office rent” (which was listed as an overhead expense) from the original invoice which was actually for the delivery of other services. ..in violation of Title 18, United States Code, § 1001.

28. Lessons Learned/Fraud Prevention Stay Alert!!! Verify with sources (documents & people) Document Red Flags Communicate with Audit or Investigative counterparts Get angry – this is YOUR money!

29. Manu Shah’s residence – July 1, 2007

30. Manu Shah’s Residence, October 6, 2010 -- ASHLAND FCI MANU SHAH, 15384-026, 74-Asian-M , Release date 08-10-2012

31. Robert Sullinger’s residence October 6, 2010 1. ROBERT G SULLINGER 15508-026 61-White-M 05-02-2012 MARION USP

32. CATCH the Biggest Robbers & Thieves! • Contract fraud • Grant fraud • Embezzlement • Etc. Remember..... You can “save” the taxpayer the equivalent of: Millions of $$$$$$ (Or More!) Thousands of cars Thousands of Identities

33. A little visual of the “savings”

34. Questions Todd Kath Special Agent Telephone 312-353-0106 todd.o.kath@oig.dot.gov U. S. Department of Transportation: Office of Inspector General Office of Investigations and Illinois Department of Transportation: Financial Review and Investigation Section Office of Quality Compliance & Review Gene Gansz Supervisory Auditor Telephone 217-785-4592 Gene.Gansz@illinois.gov