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Agencies band together in Phila. to probe stimulus fraud

The FBI will be there. So will agents from the Army and the Navy. So, too, will inspectors from SEPTA, the City of Philadelphia, the Postal Service, the U.S. Department of Commerce.

The FBI will be there. So will agents from the Army and the Navy. So, too, will inspectors from SEPTA, the City of Philadelphia, the Postal Service, the U.S. Department of Commerce.

From 80 to 100 representatives of agencies with investigative powers in Pennsylvania, New Jersey, and elsewhere will gather this morning at the U.S. Attorney's Office in Philadelphia to begin working together on preventing and prosecuting potential fraud in the federal stimulus program.

The show of force is meant to indicate that the feds - and others - are closely watching over the three-year, $787 billion American Recovery and Reinvestment Act.

The program, now 10 months old, was like a fat man getting off the couch. It took a while to reach its feet, but now it's up and rolling.

So far, there have been no major scandals nationally.

"This is to get in front of what we anticipate may be efforts by unscrupulous persons to take advantage of opportunities to defraud the government," said John J. Pease, chief of the government fraud section in the U.S. Attorney's Office.

"This is not the result of fraud we're seeing," Pease said. "This is to try to get in front of what we expect may come in the year or two ahead. What we don't want is a situation two or three years down the road where we have to look back to see what happened."

The Obama administration is urging cooperation among federal, state and local agencies in the formation of regional oversight groups around the country.

Pease said the one that meets today in Philadelphia will include officials from U.S. Attorney's Offices in several states, along with the regional representatives of most federal departments that are handling stimulus funds. State and local groups will also participate.

About 20 agencies will be represented.

New Jersey and Pennsylvania already have stimulus oversight groups charged with tracking the funds that pass through their hands.

Both states expect to have jurisdiction over about $10 billion, with additional tens of millions of dollars going directly to recipients of some stimulus grants.

Ronald J. Naples, chairman of the Pennsylvania Stimulus Oversight Commission, said yesterday that no allegations of stimulus fraud had come to his attention.

"I won't say that I am surprised or not," he said. "But I think the money is being managed carefully, and it is being put into good projects. I guess there is potential for bad things, but at this stage we have good [oversight] processes in place."

Pete McAleer, spokesman for New Jersey Comptroller A. Matthew Boxer, said no allegations of stimulus fraud had come to light in New Jersey either. "Nothing," he said.

The Philadelphia meeting today will be to form what U.S. Attorney Michael Levy is calling the Recovery Act Fraud Regional Working Group. Additional meetings will be held every three to four months, Pease said.