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Office of the Inspector General

OIG Press Release: U.S. Department of Labor Contract Employee and Co-conspirator Pled Guilty to Embezzling More than a Half Million Dollars from the Division of Longshore and Harbor Workers' Compensation Program [06/24/1998]

For more information call: (202) 219-9301

A contract employee for the U.S. Department of Labor and a co-conspirator pled guilty on June 24th in the United States District Court to embezzling over half a million dollars from the Department of Labor's Division of Longshore and Harbor Workers' Compensation. The two women, Jennifer M. Spraitz, 28, of Waldorf, Maryland, and Rachel Lea Gratton, 30, of Temple Hills, Maryland, each pled guilty to conspiracy to commit mail fraud and theft from a federal program.

The Division of Longshore and Harbor Workers' Compensation administers a program, that provides compensation benefits, medical payments and vocational rehabilitation services to injured workers. It is funded by the federal government and by private employers. One of the defendants, Jennifer M. Spraitz, had been employed by Orkand Corporation and had been assigned as a contract employee to the Division. Ms. Spraitz was in charge of submitting vocational rehabilitation counselor invoices for approval and payment. Beginning in October 1993, she began to fraudulently create false vocational rehabilitation counselor invoices, making up the names of allegedly injured workers who were supposedly receiving services she listed on the invoices. Ms. Spraitz used the name of her friend and co-conspirator, Rachel Lea Gratton, as the fictitious rehabilitation counselor on the invoices, and listed addresses that were under their control.

From October 1993 through November 1997, Ms. Spraitz created and submitted approximately 150 fraudulent invoices for rehabilitation counselor services. In response to these false invoices, the United States Treasury issued checks totaling $524,722, and mailed the checks to the addresses listed on the invoices. Typically, Ms. Spraitz would retrieve the checks and mail to Ms. Gratton, who early in the scheme had moved to Florida. Ms. Gratton would then mail back to Ms. Spraitz a personal check for half the amount of the treasury check. Ms. Spraitz and Ms. Gratton used the money to pay personal expenses and to buy cars.

United States Attorney Wilma A. Lewis praised the investigative work of Special Agent Daniel Wager of the United States Department of Labor, Office of Investigations, Postal Inspector L. Deahl Frazier, of the U.S. Postal Inspector Service, and agents of the Federal Bureau of Investigation. United States Attorney Lewis also commended Assistant U.S. Attorney Miriam Smolen who prosecuted the case.

Sentencing for Ms. Spraitz is scheduled for September 17, 1998, and for Ms. Gratton for September 22, 1998. Both defendants face a possible ten-year imprisonment, a fine of $250,000, and an order to complete restitution. Pending sentencing, they were both remanded to the custody of a half-way house.

Office of Inspector General
June 24, 1998
Media Contact: David Roberts
Phone Number