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Feds Join Lawsuit Against Company Behind Government Background Checks

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WASHINGTON -- The Justice Department is jumping into a lawsuit against a company that runs background checks for the federal government, siding with a whistleblower who alleges the company, United States Investigative Services LLC, cut corners in investigations and charged taxpayers for background checks it didn't complete.

"We will not tolerate shortcuts taken by companies that we have entrusted with vetting individuals to be given access to our country’s sensitive and secret information," Stuart F. Delery, the assistant attorney general in charge of DOJ's Civil Division, said in a statement on Wednesday. “The Justice Department will take action against those who charge the taxpayers for services they failed to provide, especially when their non-performance could place our country’s security at risk.”

Blake Percival, an Alabama resident who started working for USIS in 2001, filed his lawsuit in 2011, just weeks after he was fired. After he took over as director of fieldwork services for part of Alabama in January 2011, overseeing 350 reviewers, Percival said he was told that his predecessor had engaged in a practice known as "dumping."

As part of the scam, USIS allegedly used a computer program to release from its system background investigations that had not gone through the entire review process. The company allegedly improperly billed the government's Office of Personnel Management for background checks that had not been completed.

USIS said Wednesday it's made changes since it first became aware of the allegations in Percival's suit a year and a half ago, including hiring new managers and implementing "enhanced oversight."

"The behavior by a small number of employees alleged in the complaint is completely inconsistent with our company values, culture and tradition of outstanding service to our government customers," a spokesperson said in a statement. "We have acted decisively to ensure the quality of our work and adherence to OPM requirements, as we continue to perform under our OPM contracts."

Percival alleged he was fired by USIS after less than six months because he refused to dump cases at the end of the month. He stands to collect some of the civil penalty recovered under the False Claims Act if his suit is successful. The law firm representing Percival did not immediately respond to a request for comment.

The claims made in Percival's complaint echo an allegation made in three other lawsuits USIS employees have recently brought against the firm: that the company's model fails to meet the basic standards for background checks laid out by the U.S. government. The firm, which ran the background checks into Washington Navy Yard shooter Aaron Alexis and NSA whistleblower Edward Snowden, has also come under scrutiny from congressional investigators and OPM's inspector general. OPM has since said that the firm's investigation of Snowden met its standards.

But in litigation and in numerous emails to HuffPost, USIS investigators have claimed that the firm's profit-driven model -- it's paid on a per-case basis by the federal government -- encourages employees to cut corners in the course of their investigations. In wage-and-hour lawsuits filed in California and Florida, workers say their managers essentially forced them to work unpaid hours in order to complete their investigations in the allotted timeframe and help the firm churn through cases. One of the suits was settled for $900,000.

The work performed by USIS used to be done in-house at the Office of Personnel Management. The Clinton administration, however, privatized those responsibilities, leading to the creation of USIS in the mid-1990's. The company, which was purchased by the private equity firm Providence Equity Partners for $1.5 billion in 2007, now has a $2.45 billion, 5-year contract with the federal government.

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