Case 1:11-mj-00172-JMF Document 1

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UNITED STATES DISTRICT COURT FOR THE DISTRICT OF COLUMBIA UNITED STATES OF AMERICA v. CHERYL L. FERRARA, Defendant. : : : : : : : : Magistrate No. Violations: 18 U.S.C. 1341 (Mail Fraud) and 2(b) (Causing an Act to be Done); 22 D.C. Code 2405(a) (False Statement) and 1805 (Aiding and Abetting); and 22 D.C. Code 3221(b), 3222(b)(2) (Fraud in the Second Degree)

INFORMATION The United States Attorney hereby informs the Court that: COUNT ONE A. Introduction 1. At all relevant times, defendant CHERYL L. FERRARA (FERRARA) was the Deputy Assistant Inspector General for Audits of the District of Columbia Office of the Inspector General (DC OIG). 2. At all relevant times, Anurak Duangphut (Duangphut) was a non-resident of the District of Columbia, residing with her husband, children and mother-in-law in Silver Spring, Maryland. FERRARA knew Duangphut because Duangphut had babysat FERRARAs young daughter for three years and subsequently the two kept in touch, in part because their two children played together. 3. At all relevant time, the Association of Inspectors General (AIG) was a national organization founded in 1996 whose mission it was to foster and support the work and training of Inspectors General and professional staff across the country. In part, its Mission statement provided that it sought to foster and promote public accountability and integrity in the general areas of prevention, examination, investigation, audit, detection, elimination and prosecution of fraud, waste

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and abuse[.] FERRARA was the Treasurer of the local District of Colombia chapter of AIG in 2007 until late-2008. In 2009, FERRARA became Treasurer of the National AIG organization. 4. The AIG had an account with Bank of America, account # ... 1570, which was opened in 2007 and was intended for legitimate expenses of the organization. While FERRARA was Treasurer for AIG, she had access and control of this bank account and was the authorized signature on the account, but she was not authorized to write checks to herself from this account. 5. At all relevant times, District of Columbia Personnel Regulations provided that where two or more applicants for a position in the District of Columbia Career Service are equally qualified, the applicant with residency preference shall be listed and selected ahead of the equally qualified non-preference candidate. 6. On or about December 6, 2007, the District of Columbia posted Vacancy Announcement 8815, for the position of Staff Assistant in the Audit Division of the DC OIG. This posting noted that an applicant who was a bona fide resident of the District of Columbia at the time of application would be entitled to claim a hiring preference over a non-resident applicant. B. The Purpose of the Scheme and Artifice 7. From in or about December of 2007, until in or about November of 2009, in the District of Columbia and elsewhere, defendant FERRARA and Duangphut knowingly and willfully devised and intended to devise a scheme and artifice to insure that Duangphut was hired and remained employed by the District of Columbia, and thereby to obtain money (Duangphuts salary) from the District of Columbia, by means of false and fraudulent pretenses and representations as to Duangphuts residency.

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C. The Scheme and Artifice 8. Between in or about December of 2007, and in or about November of 2009, defendant FERRARA and Duangphut used a number of artifices and devices to falsely represent that Duangphut was a resident of the District of Columbia. These artifices and devices included the actions set forth below. 9. When the above job announcement was posted, FERRARA notified Duangphut about it and told Duangphut she should apply for the position. 10. On or about December 13, 2007, Duangphut signed an Employment Application for the position of Staff Assistant in the Audit Division of the DC OIG, vacancy announcement 8815. In the Application, Duangphut falsely stated that she resided at XXXX, Washington, D.C. (hereinafter XXXX). When Duangphut applied for the position, FERRARA told Duangphut that FERRARA had to pick a District of Columbia resident for the job. FERRARA knew Duangphut did not live in the District of Columbia at any time relevant to this Information. 11. The Residency Preference Form signed by Duangphut on or about December 13, 2007, and submitted or caused to be submitted on or about December 17, 2007, as part of her signed Employment Application, was submitted to an instrumentality of the District of Columbia government, that is, the D.C. Department of Human Resources, under circumstances in which Duangphut could reasonably expect her statement as to residency to be relied upon as true. The Residency Form signed by Duangphut indicated that the making of a false statement was punishable by criminal penalties, in that the Employment Application stated as follows: I understand that the making of a false statement on this form or materials submitted with this form is punishable by criminal penalties pursuant to D.C. Official Code 22-2405 et seq. (2001). The Residency

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Preference Form signed by Duangphut was materially false in that Duangphut claimed a residency preference, and gave her then-current address as XXXX N.W., when in fact she did not reside in the District of Columbia, at that address or anywhere else in D.C., and was not entitled to a residency preference. 12. In support of her false representation that she resided at XXXX N.W., Duangphut had asked defendant FERRARA for assistance in the process, and FERRARA gave Duangphut a list of the documents she needed, including, among others, a lease and rent payments. 13. As to the lease, FERRARA pulled a sample lease off the Internet and gave it to Duangphut. Duangphut needed a lease to show residency in the District and needed to show payment of rent. FERRARA suggested that Duangphut use the name of someone with whom FERRARA had done business as the purported landlord and his company as the purported owner of the property. Thereafter, Duangphut signed a fabricated lease for apartment #4. Signed by Duangphut on November 14, 2007, and covering the term 12/1/07 through 12/31/08, the lease purports to be entered into with DARYL Enterprises, Inc., and to be signed by one Dallas J. Rausch as the authorized representative of DARYL Enterprises, Inc. This document was entirely false, in that neither DARYL Enterprises, Inc., nor Dallas Rausch, had any connection whatsoever with the building at XXXX N.W., and, nonetheless, Duangphut did not live at that address. 14. When Duangphut initially submitted the lease as proof of residency, it was not accepted by the D.C. government. In order to make it look more authentic, FERRARA placed a false notarization on the lease. That is, FERRARA, using another document with a notary seal, copied the notary seal onto the last page of the lease document, and altered it to change the date on which it was signed and the address at which it was notarized.

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15. In order to show rent payments by Duangphut, FERRARA and Duangphut opened a checking account at Wachovia Bank, account # ... 5584, in the District of Columbia for Duangphut. FERRARA told Duangphut to make out the rent checks to Darryl Enterprises from this account and give them to FERRARA. Because Duangphut did not have sufficient funds, FERRARA put money in this account for Duangphuts rent checks and to make it appear Duangphut had income from a job. Some of the money placed in this account by FERRARA was from AIGs Bank of America account, and some from FERRARAs personal account. Although the account was in the name of Duangphut, FERRARA had ready access to it, that is, she had the PIN number for it and she had Duangphut write several blank checks from this account for FERRARA to use. After a few months of writing rent checks, Duangphut and FERRARA stopped doing so because no one from the D.C. government had checked to determine if Duangphut was actually a D.C. resident. 16. Four checks drawn on Duangphuts Wachovia account, # ... 5584, each in the amount of $1,250 and each made payable to Daryl Enterprises, were deposited by FERRARA into AIGs Bank of America account, # ... 1570. These four checks purported to be rent payments for a residence of Duangphut in the District of Columbia. The checks are dated, respectively,

December 9, 2007 (check #093: FERRARA signed Duangphuts name), January 5, 2008 (check #1024; FERRARA wrote and signed Duangphuts name on the check), February 2, 2008 (check #1018; FERRARA wrote the check and signed Duangphuts name), and March 5, 2008 (check #1007; FERRARA wrote check and signed Duangphuts name). In addition, two checks were drawn on AIGs Bank of America account, # ... 1570, each in the amount of $1,389.42 and dated, respectively, January 25, 2008 (check #0991; FERRARA wrote the check and endorsed the back of the check for deposit), and February 16, 2008 (check #0093; FERRARA wrote and signed the

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check). These two checks were signed by FERRARA and deposited into Duangphuts Wachovia account, # ... 5584, as discussed above. 17. In the hiring process, Duangphut was in fact given a residency preference. Under District of Columbia Personnel Regulations, discussed above, if Duangphut had not had residency preference, any qualified applicant with residency preference would have to been hired ahead of her. 18. FERRARA said she was one of the individuals at DC OIG that interviewed potential applicants for this position, and, in that role, she said she interviewed a number of District residents. 19. Duangphut was hired, effective March 17, 2008. After Duangphut was hired, she worked under FERRARA. 20. On or about April 11, 2008, Duangphut went to a UPS Store at 1718 M Street N.W., submitted a form she had signed for the rental of mailbox 255, and obtained the key to the box. She had her mail forwarded from the XXXX address to the M Street mailbox, which was merely a post office box. FERRARA had recommended to Duangphut that she open a P.O. Box close to the DC OIG office. D. Use of the Mails in Furtherance of the Scheme and Artifice 21. Between in or about March of 2008 and in or about November of 2009, in the District of Columbia and elsewhere, defendant FERRARA and Duangphut, having devised the abovedescribed scheme and artifice to defraud and to obtain money or property by means of false and fraudulent pretenses, for the purpose of executing and attempting to execute the scheme and artifice, did cause to be placed in an authorized depository for mail matter envelopes, containing pay stubs from Duangphuts employer, the DC OIG, sent by the District of Columbia, in Washington, D.C.,

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to Duangphut, at XXXX N.W., and then at 1718 M Street N.W., in Washington, D.C. (Mail Fraud and Causing an Act to be Done, in violation of Title 18, United States Code, Sections 1341 and 2(b)) COUNT TWO 22. Paragraphs one through twenty of this Information are incorporated herein as if set forth in full. 23. On or about December 17, 2007, defendant FERRARA, aided and abetted by

Duangphut, submitted or caused to be submitted a materially false Residency Preference Form, as part of Duangphuts Employment Application, to an instrumentality of the District of Columbia government, that is, the D.C. Department of Human Resources, under circumstances in which they could reasonably expect Duangphuts statement as to residency to be relied upon as true. 24. The Residency Preference Form signed by Duangphut on or about December 13, 2007, and submitted or caused to be submitted on or about December 17, 2007, as part of her signed Employment Application, was materially false in that Duangphut claimed a residency preference, and gave her address as XXXX, Washington, D.C. 20009, when in fact she did not then reside in the District of Columbia, at that address or anywhere else in D.C., and was not entitled to a residency preference. 25. The Residency Preference Form signed by Duangphut on or about December 13, 2007, and submitted or caused to be submitted on or about December 17, 2007, as part of her signed Employment Application, indicated that the making of a false statement was punishable by criminal penalties, in that the Employment Application stated as follows: I understand that the making of a false statement on this form or materials submitted with this form is punishable by criminal

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penalties pursuant to D.C. Official Code 22-2405 et seq. (2001). (False Statements, in violation of Title 22, D.C. Code Sections 2405(a), and 1805 (aiding and abetting)) COUNT THREE 26. Paragraphs one through twenty of this Information are incorporated herein as if set forth in full. 27. Between in or about October of 2007, and in or about February of 2009, within the District of Columbia and elsewhere, defendant CHERYL L. FERRARA engaged in a scheme and systematic course of conduct with intent to defraud and to obtain property of the Association of Inspectors General by means of false or fraudulent pretenses, representations, and promises, and the value of the property which was the object of the scheme was of some value, consisting of funds from the Bank of America account for that Association. (Fraud in the Second Degree, in violation of Title 22, D.C. Code, Sections 3221(b), 3222(b)(2)) RONALD C. MACHEN JR. UNITED STATES ATTORNEY D.C. Bar # 447889

By:

______________/s/_______________________ Daniel P. Butler United States Attorney D.C. Bar # 417718 555 4th Street, N.W., Room 5231 Washington, D.C. 20530 (202) 252-7881 Daniel.Butler@USDOJ.Gov