A Defense Department employee in Virginia managed to scam the government out of $1.4 million in overtime pay, eluding detection for more than 17 years while claiming to have worked a near-impossible 90 hours a week, 52 weeks a year.
The fraud has sent government agencies scrambling to try to figure out how she did it — though they clammed up Thursday when The Washington Times asked why they missed the scheme for so long and whether they’ve been able to plug the holes.
Michelle M. Holt pleaded guilty Wednesday to computer fraud and theft of government property. She faces up to 15 years in prison, though prosecutors said she’s likely to get less and her lawyer said she has been fully cooperating with investigators to explain how she did it.
“She’s just very apologetic, very upset, knows that she’s done wrong,” said William Eric Johnson, her lawyer. “At the end of the plea hearing yesterday she gave the U.S. attorney a hug. She’s been fully cooperative.”
Ms. Holt, 52, worked as a civilian secretary for the Air Force at Joint Base Langley-Eustis in Hampton, Virginia. As, far back as 2001, she was padding her time sheets with extra overtime.
In 2002, she claimed nearly $14,800 in overtime, on top of her base pay of about $29,000. By 2004, her overtime pay was more than her regular wages, and by 2009 she was collecting an extra $100,000 a year, tripling her regular pay of less about $45,000.
In 2017, the last full year of the scam, she claimed nearly $120,000 in overtime and holiday pay on top of her $51,324 salary.
*Over the last 10 years she averaged claims of 90 hours of work every two-week pay period, and in one pay period claimed 137 hours of overtime, according to court documents.
Government officials refused to say Thursday how they failed to spot that impossible claim.
The Pentagon referred calls to Langley, which referred calls late in the day to the Defense Criminal Investigative Service, which didn’t respond.
Court documents said the Defense Department’s inspector general finally clued in to the scam during a “research project” in June. The office also declined to comment to The Washington Times about what it found.
But Mr. Johnson said what Ms. Holt did was use a superuser login credential — apparently assigned to a colleague who supervised her time sheets — and go in after pay periods were closed to back-fill extra overtime and holiday pay. The checks were cut without anyone ever having to approve her changes.
“It’s unbelievable really,” the lawyer said. “I think everybody involved in this case was trying to figure out how she did it. Suddenly everybody looked at it and it was just so simple.”
Government officials wouldn’t tell The Times if they have been able to plug the hole, but Mr. Johnson said Ms. Holt sat down with a government accountant to lay out her activities.
“One would certainly hop they have dotted this ‘i,’ crossed this ‘t,’” he said.
Curtis Kalin, communications director at Citizens Against Government Waste, said it was an “outrageous fraud,” but added it was too common in a federal government woefully unable to spot financial shenanigans by employees.
“The fact that this crime continued for 17 years underscores the incredibly lax internal controls at DOD and should light a fire underneath all federal agencies to beef up scrutiny of their overtime systems so that fraud on this scale can never happen again,” he said.
Prosecutors said when Ms. Holt was confronted, she admitted she committed fraud for one pay period, claiming 127 hours worked. They then confronted her with records dating back 10 years.
“I’m in trouble,” she told them.
She quit her job soon after.
“Federal service is a public trust that demands of employees the highest degree of integrity in the workplace,” said G. Zachary Terwilliger, U.S. attorney for the Eastern District of Virginia, which prosecuted the case. “As stewards of that trust, we must ensure that those in such positions are held fully accountable for breaches that put personal enrichment in place of public service.”
* (Correction: This updated version of the article has been changed to correct an inaccurate description of the pay period.)