(Washington, DC) The US Attorney's office informed the District's Office of the Chief Financial Officer (OCFO) that it filed an Information against Saamir Kaiser, former general counsel to the OCFO. According to the Information, Kaiser committed fraud in the first degree against the District of Columbia for misrepresenting his credentials to obtain positions of employment. Additionally, the Information alleges that Kaiser violated federal law related to mail fraud for devising and intending to devise a scheme to defraud the DC Tobacco Settlement Financing Corporation of $248,000 from its administrative account, which is separate from any funds held in trust for the District's tobacco bondholders.
In early January, CFO Natwar M. Gandhi announced that he had referred Kaiser's case to the District's Inspector General. Kaiser resigned in December, after serving as the OCFO's general counsel for five months, when an internal investigation by the OCFO revealed that he had falsified his legal credentials and that he held neither a law degree nor a license to practice law. Following his resignation, an internal investigation was initiated by the OCFO to assess any organizational exposure as a result of his actions while serving as an attorney for the OCFO. One area of concern was Kaiser's involvement with the DC Tobacco Settlement Financing Corporation. After an internal review of the Corporation's only checking account, there were indications of an embezzlement, so the OCFO immediately referred this case to the Inspector General. The money held in trust for the District's tobacco bondholders was never at risk.
At Gandhi's direction, by mid-March, the Corporation initiated a series of safeguards to enhance its financial controls including, but not limited to, the following:
- Dual signatures for Corporation checks are now required.
- Check writing and bank account reconciliation responsibilities will be performed by two different individuals.
- All financial information will be entered into the District's accounting information system.
- All signature authority for Corporation check writing will be within the District's Office of Finance and Treasury (OFT). The OFT representatives handling the Corporation's funds are bonded for amounts up to $2,000,000, subject to a $20,000 deductible.
- Staff from OFT will be used for Corporation financial record keeping.
- Quarterly financial reports, which will include the Corporation's account balances and an itemization of expenditures, will be issued to the Corporation's Board of Directors.
- The Corporation has procured a Directors' and Officers' (D and O) liability insurance for the Corporation's directors and officers. The insurance policy protects the Corporation and each individual director and officer of the Corporation against claims arising from:
- Any actual or alleged wrongful act of any director or officer of the Corporation in his/her respective official capacity with the Corporation; and
- Any actual or alleged wrongful act of the Corporation itself. The policy covers liability of up to $5 million with a $75,000 retention (deductible). The policy is effective as of May 31, 2002.