Defense News: US, ROK test unmanned vehicles in live fire exercise during RIMPAC 2024

Source: United States Navy

The exercise, a part of the ongoing RIMPAC 2024 operations around the Hawaiian Islands, served as a platform for testing the operational capabilities of the CUSV as a high-value unit escort. “With unmanned vehicles, Sailors are able to stay out of harm’s way and we can use unmanned craft to carry out a mission from relative safety,” said Lt. Cmdr. Janet VonEiff, the U.S. 3rd Fleet’s experimentation officer who leads the experimentation working group for RIMPAC.

​The CUSV was launched from the ROK tank landing ship ROKS Cheon Ja Bong (LST-687). The event also featured an unmanned aerial vehicle that provided aerial targeting information and visual confirmation, allowing the CUSV to fire its rockets at an afloat target. The UAV also performed battle damage assessments.

The live-fire exercise is part of the U.S. Navy’s experimentation program to evaluate the capabilities of the Poniard weapon system for potential adoption by the fleet.

Both navies established high-level unmanned scenarios for the exercise, which included unmanned detection, tracking, and analysis of unmanned targets, as well as the launch of guided rockets from CUSV. The exercise marked 100% system accuracy with all rockets hitting their intended targets.

Lt. Cmdr. VonEiff emphasized the importance of international collaboration in these trials. “It’s good for us to see what they are working on and for them to see what we are working on, and we can further advance our capabilities through diverse thinking,” she said. “We are always looking for partner nations to join in on the experimentation front.”

Twenty-nine nations, 40 surface ships, three submarines, 14 national land forces, more than 150 aircraft and 25,000 personnel are participating in RIMPAC in and around the Hawaiian Islands, June 27 to Aug. 1. The world’s largest international maritime exercise, RIMPAC provides a unique training opportunity while fostering and sustaining cooperative relationships among participants critical to ensuring the safety of sea lanes and security on the world’s oceans. RIMPAC 2024 is the 29th exercise in the series that began in 1971.

Defense News: CNO Delivers Remarks at the Opening of the “A Sea Change: Navy Women on Combatant Ships” Exhibit at the Military Women’s Memorial

Source: United States Navy

Below is a transcript of the remarks as delivered:

Thank you so much, and Phyllis, thank you very much for your kind words. I never could have imagined that we actually grew up in the same place. It is really an honor to be here. Thank you so much for the invitation. Secretary Dalton, thank you so much for your story, your leadership, for everything that you’ve done for our Navy. How about another big round of applause?

Mr. Secretary, Admiral Grady, Admiral Richardson, Admiral Howard, Deputy Under Secretary Gebhardt – so great to see you in that role – Vice Admiral, not here, Davids, but if you’re watching Admiral Davis, I hope you feel better, Admiral Lower, Ambassador Cabral, MCPON13 Stevens, interagency colleagues, industry partners, veterans, Sailors, families, all of our active, reserve, retired Sailors, DOD civilians, friends, family… hello, Jim and Isabelle, great to see you – my husband and daughter joining today. I am really thrilled to be back here at the Military Women’s Memorial to celebrate such a momentous occasion as we mark the 30 years of women serving on combatant ships.

I really want to thank you, Phyllis, I want to thank the Military Women’s Memorial Board of Directors and the entire team here for putting on this incredible event and curating, what I already got a sneak preview on, is a truly inspiring and memorable exhibit.

Again, Secretary Dalton, it is truly an honor to have you here with us today. Thank you for your leadership, your focus, and really your commitment to ensuring that women have the opportunity to serve at every single level of our Navy. We wouldn’t be here without you. I also want to say thank you, although they may have left, to our brass quartet for their wonderful music, they always add so much to our celebration. And I want to continue that vein of thanks by saying thank you to all of you for making the time to be here, for taking an interest in telling, sharing and preserving the stories of women past and present who serve our nation.

I am so honored and humbled to be part of opening this exhibit, “Sea Change: Navy women on Combatant Ships”. Earlier I mentioned over 30 years into this very important sea change, made possible by the repeal of the combat exclusion law on November 30, 1993 – really the landmark piece of legislation that repealed laws that barred women from serving aboard combatant shifts and aircraft and opened the door for someone like me to be standing before you today as the 33rd Chief of Naval Operations.

And although 30th of November is the day we mark, I think it’s really important that we pause and reflect on the hard work and dedication of the many women – and men – trailblazers who spent decades paving the way for this piece of legislation, and for the generations of women leaders who lead our sea services today.

When I think of trailblazers, I think of Frieda Hardin, she’s the first panel in the exhibit that you will see today, and one of just 12,000 women who served our Navy-Marine Corps team as nurses, clerks, draftsmen, translators, camouflage designers and recruiters during World War One, She was a Yeomanette, a Yeoman “F” for female, on active duty from September 1918 to March 1919 at the Norfolk Naval Yard in Virginia, when a formal role for women in the Armed Forces was really hard to even conceptualize at a time when women could not even vote.

When I think about the trailblazers, I think of the more than 100,000 women who served in the Navy as WAVES (Women Accepted for Volunteer Emergency Service) during World War II, performing a variety of jobs from clerical work and weather forecasting to hospital work, engineering and even training male pilots to be able to fly their aircraft. A little over a week ago, we celebrated the 82nd anniversary of the WAVES legislation.

When I think of trailblazers, I think of Admiral Elmo or “bud” Zumwalt, our 19th Chief of Naval Operations, through his Z gram 116 which was released in 1972, and it was entitled “equal rights opportunities for women in the Navy”, he would initiate and direct the process of more fully integrating into the Navy so they could, and I quote, “contribute their extensive talents and achieve full professional status.” His message allowed the assignment of women on ships one day, it opened all Staff Corps and restricted line communities to women. It welcomed the acceptance of women midshipmen into the Naval ROTC program, and it improved pathways for women to progress to Flag rank. All of these trailblazers, many of whom you’ll see in the exhibit later tonight, understood that incorporating the talent and expertise of American women was necessary to ensure our nation’s warfighting advantage far into the future. They realized that just like men, women bring their critical skills and innovative ideas that we need to be the world’s most formidable fighting force, ready to deter, fight, and win whenever and wherever our nation asks us to do so.

I’m going to tell a little bit of a story about myself, my personal path to joining the Navy, because it really was all made possible because of Z gram 116. I commissioned through the ROTC program at Northwestern University back in 1985 when the Combat Exclusion Law was still in effect. At a time when there were a lot of things that women could not do, at a time when there were only 17 spots a year for women officers to serve on ships, and then only on noncombatant ships. Sadly, I did not get one of those spots, and I became a girl, GURL, a general unrestricted line officer. And I headed up from Great Lakes, where I served at Naval Reserve Readiness Command Region 13 for my very first tour. And after a few months there, my COO at the time, Captain Gary Bair, a Surface Warfare Officer, pulled me aside and told me that I had the makings of the division officer at sea. With his full support and the

encouragement from the rest of my command, they pushed me to pull every lever available to me to get the training and the qualifications I needed to prove my desire and my ability to serve at sea. Long story short, after taking a six-week course at the Boiler Tech Machinist’s Mate school at Great Lakes, qualifying Engineering Officer of the Watch at the Great Lakes “Hot Plant”, I put a package together, and I found a path forward. I could resign my active commission. I could take a reserve commission, and I could become a TAR, a Training and Administration Reserves Officer, and I could get one of the three spots that were held open for members of the Naval Reserve. So, with Captain Bair’s support and encouragement, I went for it, just like Rita said, and I was selected. Reported to Surface Warfare Officer School on the day I promoted to Lieutenant JG.

I share that story because I think it really highlights how limited the opportunities for women were before the repeal the combat exclusion law. But after my first division officer tour onboard USS Shenandoah, a Destroyer Tender, I could see those opportunities were starting to increase, and in 1988, a policy change allowed women to be assigned to the Combat Logistics Force. So, I passed up ashore duty, and I took a second division officer tour on USS Monongahela, an oiler, to take advantage of this new opportunity and get some more experience, just in case.

After Monongahela, I went ashore, and while I was there, I started to hear rumblings that the combat exclusion law might be repealed. I headed to department head school with excitement and dreams of going to a combatant, and I really hoped that my timing would work out. But it didn’t. I took my T-O exam. I got the top score in my class, and then I went to my desk to open the little envelope that contained my next assignment. And I was the Chief Engineer on the USS Kiska, an ammunition ship, not a combatant, the law and policy changes were not complete.

So, with a very heavy heart and thoughts that my dreams of taking command of a combatant ship were over, I dutifully went through the steam engineer pipeline. But when I was just about to graduate, I was called to the CO’s office, and I was told exciting news. “You have new orders. You’re going to be the Operations Officer on the USS Moosbrugger, a destroyer out of Charleston, South Carolina. Congratulations.” I could not have been more shocked, more excited, or more happy. Immediately I got to work learning everything I could about being Operations Officer on the Spruance-class destroyer, mostly from my peers, and also how to lay the groundwork for this all-male ship to become co-ed.

When I arrived on Moos in 1994 there were three women, Radioman Senior Chief Petty Officer Douget, Lieutenant Junior Grade Pisani, and me. In addition to our normal jobs, it was also our responsibility to help prepare the crew to embark our first group of women. People were excited. They were scared and they were nervous, but our CO, Captain Steve Nimitz, set a positive tone. He welcomed our new teammates without any fanfare and set about fully integrating them into the team. The rest is literally history.

I understand that we have some women here from those initial groups, those who had their own personal journey alongside the combat exclusion law, those that were on the Eisenhower, the USS Moosbrugger, the hailer, the Briscoe, others, even aviation squadrons back then. So, I would like you all to stand so we can give you a round of applause.

And it was true that once women were able to serve on combatants, the doors to command, command ships, aircraft squadrons, destroyers squadrons, strike groups, fleets and even being the CNO were opened. All that we needed was time at sea, experience on staffs, and the opportunity to lead.

When I tell this story to Midshipmen and young Petty Officers now, they look at me like I’m crazy. They have absolutely no idea that there was a time where women were not on every single ship in the United States Navy. Even below the surface, since 2011, women have been serving on submarines, and today, Commander Amber Cowan and Master Chief Coover are leading their sailors for the USS, Kentucky Gold and the USS Louisiana as the first female XO and the first female Chief of the Boat on a nuclear-powered submarine.

But none of us got here alone, and I am just one small part of this history. Just as our young Sailors of today look up and learn from those ahead of them on their journey, I learned from those ahead of me. Trailblazers really cleared the path, two of whom are here tonight, the first Admiral Deb Loewer. Deb is one of the first women officers selected for shipboard duty and made history as the first warfare-qualified woman to achieve Flag rank in 2003. She was my XO onboard Monongahela and remains an exceptional mentor to this day. Deb, can you please stand so we can give you a round of applause.

And the second Admiral Michelle Howard, one of the first women to graduate from the Naval Academy, way back in 1982, Michelle was the first black woman to command a US Navy combatant ship, USS Rushmore in 1999 and was the first woman to command a Fleet, a four-star Fleet and be promoted to the rank of four-star Admiral in 2014. Upon her promotion, Michelle became the highest-ranking woman in the US Armed Forces history, and the highest-ranking black woman in Naval history. Michelle, please stand so we can give you a round of applause.

Without their hard work and example, and that of others like them, like commander Kathleen McGrath, the first woman to command a US Navy combatant the USS Jarrett, Master Chief Janice Ayers, the first woman to serve in Command Master Chief at sea, and I now know that Darlene Iskra is here, the first woman to ever command a Navy ship.

And you know it’s very clear to me that our Navy today is very different from the Navy I joined when I was 22 years old, just as it was different from the Navy Frieda Hardin joined when she too was just 22 years old. As the Secretary said, today in 2024 all the doors of service have opened, and women not only serving, but they are leading Fleets, strike groups, destroyers, aircraft carriers, aviation squadrons,

submarines, air wings, destroyer squadrons, hospitals, supply depots, bases, shipyards and many, many more things. They have demonstrated their capability, determination, resilience and warfighting prowess. They are serving on the front lines of freedom, operating at the point of friction with our adversaries and the point of friendship with our Allies and partners all around the world. Performing just like we expect all our sailors to do in complex environments like those we see today in the Middle East.

Our ships and aircraft manned by highly skilled women and men have shot down hundreds of UAVs, USBs, cruise missiles, and for the first time in history, anti-ship ballistic missiles – saving countless lives, deterring escalation and upholding the rules-based international order and the values that we all hold so dear. One of those shifts USS Thomas Hudner was commanded by a woman – commander, Shelby M. Nikitin. And under her leadership, her team shot down cruise missiles in self-defense and in defense of Allies and partners to ensure that our sea lines of communication remained open and to guarantee our nation’s security and prosperity.

I’m here, and we are all here today, to recognize the contributions of our history-making women leaders, those who place the path, those who are on the path, and those who one day will be on the path and join our team. Because of them, and the reforms made by the Navy, the Department of Defense, Congress and the White House, our Navy is the most powerful fighting force in the world.

And as this exhibit reminds us, we have come a long way, and although there is never really a finish line, I am certainly glad that we are nearing the end of firsts, and that women serving at all levels of our military, whether they’re active, reserve, or civilian, they’re not a novelty. They’re not even an interesting milestone anymore, but just an everyday part of our DNA. I’ve been fortunate to have this front row seat to history, and while there will always be more work to do to unlock the full potential of our teams, I am confident that we have the right people in place to continue the momentum that has brought us thus far.

As we’re gathered here today to celebrate the launch of this new exhibit and the 30-year anniversary of women serving on combatant ships, I’m proud to say that women’s Sailors no longer ask the question, “What can I do?” The advancements made by and for needy women over the past 30 years have reframed that question, now it’s all about “what do I want to do?”

My story is just one ripple in the many waves of those who came before me, made possible by all the pioneering women and men who believed in equality and diversity, who believe in this sea change. I am grateful to the Military Women’s Memorial for everything they do to capture and share the incredible stories of bold and daring women, the ones in this exhibit and beyond. To preserve and celebrate the service of all women – in every branch of our military throughout our nation’s rich history.

So, before I finish and I ring that bell to open up an honorable exhibit, there is one final woman Trailblazer that I would like to recognize, who unfortunately is not here with us today, but is here in

spirit. And that woman is Air Force Brigadier General retired, Wilma L. Vaught. She is the driving force behind this tremendous Memorial, for without her efforts, we would surely not be gathered here today.

So, I’ll wrap up this evening with some words from Frieda Hardin the World War One yeomanette During the first remarks that she made here at the memorial in 1997, and I think this quote is as relevant today as it was back then. And this is what she said: “to those women who are now in the military service, I say go for it. To those young women who may be thinking about a career in the military service, I say go for it. You will find a world of opportunity waiting for you.”

So, in the words of freedom, let’s go for it and see what the next 30 years bring to our Navy and to our great nation. Thank you very much.

Company, Executive and Employee Indicted for $100M Price-Fixing Conspiracy Involving Publicly Funded Infrastructure Projects

Source: United States Department of Justice Criminal Division

A federal grand jury in Oklahoma City returned an indictment, which was unsealed today, charging Sioux Erosion Control, Inc. (Sioux), its vice president and another employee with a price-fixing conspiracy targeting over $100 million in publicly-funded transportation construction contracts across Oklahoma.

According to court documents, it is alleged that Vice President BG Dale Biscoe, Randall David Shelton and Sioux conspired with their competitors in the erosion control industry to raise and maintain prices for products and services from approximately September 2017 through April 2023. Erosion control products and services, including sod, are used to control runoff of soil or rock on highway construction and repair projects. In addition to conspiring to raise prices for sod, it is alleged that the defendants and their co‑conspirators agreed to divide up contracts across different areas of Oklahoma and rigged bids for particular projects by submitting intentionally high-priced bids or outright refusing to bid.

“Protecting competition for taxpayer-funded infrastructure projects remains a priority for the Antitrust Division,” said Assistant Attorney General Jonathan Kanter of the Justice Department’s Antitrust Division. “This indictment shows the Justice Department and its Procurement Collusion Strike Force partners’ commitment to protecting taxpayer dollars throughout Oklahoma and across the country from brazen collusion.”

“My office is committed to root out price-fixing, collusion and fraud in taxpayer-funded projects,” said U.S. Attorney Robert J. Troester for the Western District of Oklahoma. “We are proud to work with our law enforcement partners in this effort to protect integrity in publicly-funded ventures and preserve the public trust.”

“Today’s announcement represents the FBI’s commitment to protecting competitive markets from those who try to cheat the system,” said Acting Special Agent in Charge Joseph Skarda of the FBI Oklahoma City Field Office. “We will continue to work alongside our law enforcement partners to uncover these harmful schemes and hold the perpetrators responsible.”

“Violations of the nation’s antitrust laws will be taken seriously and those who circumvent federal bidding and contract regulations will be held accountable,” said Special Agent in Charge Joseph Harris of the Department of Transportation Office of Inspector General (DOT-OIG), Southern Region. “This investigation demonstrates our commitment to working with our law enforcement and prosecutorial partners to uproot and expose brazen fraud schemes devised purely for personal gain.”

Four individuals — including a former Sioux employee — previously pleaded guilty for their roles in the charged conspiracy. Those individuals have not yet been sentenced.

Biscoe, Shelton and Sioux are charged with a violation of Section 1 of the Sherman Act. The maximum penalty for individuals is 10 years in prison and a $1 million criminal fine. The maximum penalty for corporations is a $100 million criminal fine. If convicted, a federal district court judge will determine any sentence after considering the U.S. Sentencing Guidelines and other statutory factors.

The DOT-OIG and FBI Oklahoma City Field Office investigated the case.

Trial Attorneys Bethany Lipman, Matthew Grisier and Marc Hedrich of the Antitrust Division’s Washington Criminal Section and Assistant U.S. Attorney Charles Brown for the Western District of Oklahoma are prosecuting the case.

Anyone with information about this investigation or other procurement fraud schemes should notify the Procurement Collusion Strike Force (PCSF) at www.justice.gov/atr/webform/pcsf-citizen-complaint. The Justice Department created the PCSF in November 2019. It is a joint law enforcement effort to combat antitrust crimes and related fraudulent schemes that impact government procurement, grant and program funding at all levels of government – federal, state and local. For more information, visit www.justice.gov/procurement-collusion-strike-force.

An indictment is merely an allegation. All defendants are presumed innocent until proven guilty beyond a reasonable doubt in a court of law.

Former Finance Minister of Mozambique Convicted of $2B Fraud and Money Laundering Scheme

Source: United States Department of Justice Criminal Division

A federal jury in Brooklyn, New York, convicted the former Finance Minister of Mozambique for his role in a $2 billion fraud, bribery, and money laundering scheme that victimized investors in the United States and elsewhere.

According to court documents and evidence presented at trial, Manuel Chang, 68, of Mozambique, received $7 million in bribes in exchange for signing guarantees on behalf of the Republic of Mozambique to secure funding for three loans for maritime projects. As part of the scheme, Chang and his co-conspirators falsely told banks and investors that the loan proceeds would be used for the projects and not to pay bribes to government officials. In fact, however, Chang and his co-conspirators diverted more than $200 million of the loan proceeds that were used, among other things, to pay bribes and kickbacks to Chang and others.

“While serving as Finance Minister of Mozambique, Manuel Chang obtained $7 million in bribe payments in exchange for signing guarantees to secure more than $2 billion in loans,” said Principal Deputy Assistant Attorney General Nicole M. Argentieri, head of the Justice Department’s Criminal Division. “Not only did Chang’s abuse of authority betray the trust of the Mozambican people, but his corrupt bargain also caused investors—including U.S. investors—to suffer substantial losses on those loans. Chang’s conviction today demonstrates that the Criminal Division is committed to combatting foreign corruption in violation of U.S. law, no matter where these schemes occur or whom they involve.”

The trial evidence showed that, between approximately 2013 and 2015, Chang, together with his co-conspirators—including executives of Privinvest Group, a United Arab Emirates-based shipbuilding company—ensured that a United Kingdom subsidiary of Credit Suisse AG and another foreign investment bank arranged for more than $2 billion to be extended to companies owned and controlled by the Mozambican government: Proindicus S.A. (Proindicus), Empresa Moçambicana de Atum, S.A. (EMATUM), and Mozambique Asset Management (MAM). The proceeds of the loans were intended to fund three maritime projects for which Privinvest was to provide the equipment and services.

“Today’s verdict is an inspiring victory for justice and the people of Mozambique who were betrayed by the defendant, a corrupt, high-ranking government official whose greed and self-interest sold out one of the poorest countries in the world,” said U.S. Attorney Breon Peace for the Eastern District of New York. “Chang now stands convicted of pocketing millions in bribes to approve projects that ultimately failed, laundering the money, and leaving investors and Mozambique stuck with the bill.”

Chang and his co-conspirators illegally facilitated Privinvest’s diversion of more than $200 million of the loan proceeds to bribes and kickbacks. These funds included more than $150 million that Privinvest used to bribe Chang and other Mozambican government officials to ensure that companies owned and controlled by the Mozambican government entered into the loan arrangements, and that the government of Mozambique guaranteed those loans. The loans were subsequently sold in whole or in part to investors worldwide, including in the United States. In so doing, the participants defrauded these investors by misrepresenting how the loan proceeds would be used. Ultimately, Proindicus, EMATUM, and MAM each defaulted on their loans and proceeded to miss more than $700 million in loan payments, causing substantial losses to investors.

The jury convicted Chang of one count of conspiracy to commit wire fraud and one count of conspiracy to commit money laundering. He faces a maximum penalty of 20 years in prison on each count. A federal district court judge will determine any sentence after considering the U.S. Sentencing Guidelines and other statutory factors.

In October 2021, Credit Suisse AG and CSSEL (together, Credit Suisse) admitted to defrauding U.S. and international investors in the financing of an $850 million loan for the EMATUM project. CSSEL pleaded guilty to conspiracy to commit wire fraud and Credit Suisse AG entered into a deferred prosecution agreement with the Criminal Division’s Fraud Section and Money Laundering and Asset Recovery Section (MLARS), and the U.S. Attorney’s Office for the Eastern District of New York. As a part of the resolution, Credit Suisse paid approximately $475 million in penalties, fines, and disgorgement as part of coordinated resolutions with criminal and civil authorities in the United States and the United Kingdom.

The FBI New York Field Office investigated the case. 

Trial Attorney Peter Cooch of the Criminal Division’s Fraud Section, MLARS Trial Attorney Morgan Cohen, and Assistant U.S. Attorneys Hiral D. Mehta, Genny Ngai, and Jonathan Siegel for the Eastern District of New York are prosecuting the case.

The Justice Department’s Office of International Affairs provided substantial assistance. The Justice Department also appreciates the assistance of South African authorities, particularly those in the South African Department of Justice and Constitutional Development, as well as authorities in the United Kingdom, Switzerland, Spain, and Portugal.

MLARS’ Bank Integrity Unit investigates and prosecutes banks and other financial institutions, including their officers, managers, and employees, whose actions threaten the integrity of the individual institution or the wider financial system.

The Fraud Section is responsible for investigating and prosecuting Foreign Corrupt Practices Act (FCPA) and Foreign Extortion Prevention Act (FEPA) matters. Additional information about the Justice Department’s FCPA enforcement efforts can be found at www.justice.gov/criminal/fraud/fcpa.

Five Point Enterprises Agrees to Pay the United States Over $2M for Submitting False Claims to VA for Post-9/11 GI Bill Education Benefits

Source: United States Department of Justice Criminal Division

The Justice Department announced today that Five Point Enterprises LLC (5PE) has agreed to pay the United States $2,049,159 to resolve allegations that it submitted false claims to the Department of Veterans Affairs (VA) for educational assistance benefits under the Post-9/11 Veterans Educational Assistance Act of 2008 (Post-9/11 GI Bill). Until 2021, 5PE was a for-profit company based in Austin, Texas, that operated vocational schools across the country offering non-college degree programs to students, including veteran students, under a franchise agreement with New Horizons Inc.

“The Post-9/11 GI Bill educational assistance benefits are part of our promise to the brave women and men who have served our country,” said Principal Deputy Assistant Attorney General Brian M. Boynton, head of the Justice Department’s Civil Division. “Today’s settlement demonstrates our commitment to safeguarding the integrity of this important program.”

“My office is committed to protecting the integrity of our federal programs and the education benefits military veterans and their families have earned by serving this country,” said U.S. Attorney Jaime Esparza for the Western District of Texas. “We and our partners stand ready to hold accountable those who take advantage of them through fraudulent practices.”

The Post-9/11 GI Bill provides educational assistance benefits for eligible veterans and members of the armed services who enroll in qualified education or training programs. The VA restricts the number of veterans that schools may enroll in their courses, requiring that no more than 85% of students enrolled in a course have all or part of their tuition, fees, or other charges paid for them by the school or the VA. This is known as the “85/15 Rule.” The 85/15 rule ensures that educational institutions offer quality programs with a substantial number of non-supported students enrolled, which weeds out any institutions that survive only by the influx of federal benefits. For veteran students properly enrolled in a course, the VA pays the actual net cost for tuition and fees charged by the school after it has applied any scholarships, waivers, grants or other assistance designed to defray the cost of tuition and fees, which is known as the “Last Payer Rule.” The government contends that, between 2015 and 2020, 5PE knowingly enrolled Post-9/11 GI Bill funded veterans in courses at 20 New Horizons franchises across the country where 85% or more of the students were already veterans or supported students, in violation of the 85/15 Rule, and failed to report to the VA the tuition reductions it provided to veterans, in violation of the Last Payer Rule. As a result, the government contends that 5PE submitted false claims for educational assistance benefits to the VA and false certifications of compliance with the Post-9/11 GI Bill’s requirements material to those false claims.

“This settlement demonstrates that violations of Post-9/11 GI Bill benefits regulations will not be tolerated,” said Acting Special Agent in Charge Molly King of the Department of Veterans Affairs Office of Inspector General (VA OIG) Northwest Field Office. “The VA OIG will continue to work with our law enforcement partners to protect the integrity of VA’s education benefits program.”

The Civil Division’s Commercial Litigation Branch, Fraud Section and the U.S. Attorney’s Office for the Western District of Texas handled the matter. VA OIG provided substantial assistance in the investigation.

Senior Trial Counsel Christopher Wilson of the Civil Division and Assistant U.S. Attorney Thomas A. Parnham Jr. for the Western District of Texas handled the matter.

The claims asserted against defendants are allegations only. There has been no determination of liability.