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Vendor Tina Nails, MAC

Agency

National Science Foundation

Various online dating services and pornographic sites

USPS

Malev Hungarian Airlines

Department of State

Compromised account

4

Internet dating services

Fraudulent card use

5

Airline ticket Fraudulent charge

Amount 1,800

1,100

890

Additional facts

The government purchase card was used to transact over $1,800 in fraudulent purchases at a nail salon and women’s accessory and specialty store.

After discovering the fraudulent charges, the cardholder properly disputed the charges and obtained a credit for the purchases.

The account was closed subsequent to the fraudulent activity.

Over a 15-month period, a postmaster used the government purchase card to subscribe to two Internet dating services.

The cardholder also used a government computer to access pornographic sites.

The dating service charges were the only charges on this card during our audit period, yet the activity went unnoticed by the agency for over 1 year.

The USPS Office of Inspector General conducted an investigation and issued a demand letter, and the cardholder paid restitution in full.

In supporting documentation provided to GAO, embassy officials stated that the airfare was fraudulently charged to the cardholder’s account.

However, embassy officials could not provide evidence that the cardholder disputed the charge and that a credit was received.

An embassy official also stated that purchase reviews and approvals were not performed on a consistent basis during the time of the charge.

During the same period, the cardholder disputed and obtained credits for over $9,000 in other fraudulent charges.

The cardholder did not close the account until August 2006, when a second string of fraud occurred on this account.

Case 3

Description of activity

Cosmetics

Page 22

GAO-08-333 Governmentwide Purchase Cards

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