OIG's Semiannual Report to Congress, Building
on Our Past Anticipating Our Future, was published
on May 21, 2005. The report covers our accomplishments for
the period of October 1, 2004 - March 31, 2005. We are proud
of our many successes in combating fraud, waste, and abuse
in SSA programs and operations, and in providing support to
Homeland Security efforts with other Federal Government agencies.
Office of Investigations (OI) Case
Highlights
Iowa Couple Conspires to Conceal Day Care Business
An OI investigation revealed that an Iowa woman has been collecting
SSA disability benefits since 1991 while operating an in-home child
care business. The woman concealed her income from SSA by reporting
the money under her husband's Social Security number (SSN). In March
2005, the woman was sentenced to 12 months' incarceration and 3 years'
probation, and was ordered to pay SSA restitution of $163,431 after
pleading guilty to concealing work activity from SSA. In October
2004, the husband was sentenced to 5 years' probation for his role
in the fraud. This case was referred by the Des Moines, Iowa SSA
office.
Wyoming Woman Creates Fictitious Child to Defraud SSA Out
of $90,606
In April 2005, a Wyoming woman was sentenced in Casper to 12 months'
incarceration, 1 year of probation, and restitution of $90,606 after
pleading guilty to providing false information to SSA. An OI investigation
revealed that the woman falsely claimed that she was a widow with
a young child fathered by a deceased Title II disability beneficiary.
The investigation determined that the woman was not married to the
decedent at the time of his death and that the child did not exist.
This case was referred from the SSA District Office in Cheyenne,
Wyoming.
California Man Steals an Identity to Collect SSA Disability
Benefits and Avoid Child Support Payments
In April 2005, a California man was sentenced in Honolulu, Hawaii
to 60 months' incarceration in Federal prison, 3 years' probation,
and restitution of $70,316 to SSA. He was also ordered to pay $237,407
to his ex-wife for unpaid child support. The conviction was based
on an OI investigation that revealed the man assumed the identity
of a deceased Title II disability beneficiary and convinced SSA that
he was the individual entitled to the benefits and that the deceased
beneficiary was an imposter.
A subsequent investigation revealed that the man had fled the State
of California and assumed the identity of the deceased beneficiary
in order to avoid paying child support. In September 1995, the California
Superior Court issued an arrest warrant for the man for failure to
pay the child support. This case was referred by the SSA Honolulu
Office. (Case Agent Chris Castellanos, Los Angeles Field Division).
Wisconsin "Lawn King" Conceals Business
from SSA in Order to Collect SSA Disability Benefits
In April 2005, the owner and operator of a Wisconsin lawn care business
known as Lawn King was sentenced to 12 months' incarceration and
3 years' probation, and was ordered to pay restitution to SSA of
$159,078 after pleading guilty to one count of wire fraud. An OI
investigation revealed that the man operated a lawn care business
from 1999 2004 while collecting Title II disability benefits. During
this time period, the man reported to SSA that he was unable to work
due to a compressed spinal cord and degenerative disc disease. This
case was referred by the Kenosha, Wisconsin SSA Office.
Our objective in this audit was to determine whether SSA complied
with its policy concerning the issuance of original and replacement
SSN cards for individuals who were deceased. Under limited circumstances,
SSA may assign an original SSN after a person's death. In November
2002, SSA eliminated provisions allowing for issuance of replacement
cards on behalf of deceased number holders.
Even after the November 2002 policy change, SSA issued 1,068 replacement
cards with SSNs of individuals whose records contained a date of
death. In addition, we identified 537 replacement card applications
where the name and date of birth information provided did not match
the information listed in SSA's records. We also reported that SSA
paid $1.6 million in survivor benefits to auxiliary beneficiaries
of 19 individuals who applied in person and received 3 or more replacement
cards after the date of death appearing in SSA records. In 15 of
the 19 cases, SSA approved the applications and issued replacement
cards at the same time survivor benefits were being paid to the applicant's
auxiliary beneficiaries.
We made several recommendations to assist SSA in ensuring the integrity
of the enumeration process for deceased individuals. SSA agreed with
our recommendations.
Our audit objective was to identify and prevent individuals from
receiving Old-Age, Survivors and Disability Insurance (OASDI) benefits
and/or Supplemental Security Income (SSI) payments inappropriately
under multiple SSNs at the same mailing address.
In January 2004, we were alerted to three cases where beneficiaries
inappropriately received benefits under multiple SSNs at the same
address. To identify the extent of this situation, we analyzed a
data extract of approximately 54 million OASDI and SSI beneficiaries
who received benefits in February 2004. Based on our analysis of
the SSNs, address information and benefit records, we identified
354 beneficiaries who may have received benefits inappropriately
under at least 2 different SSNs at the same address.
Because of our review of these 354 cases, SSA assessed almost $9.2
million in overpayments for 220 beneficiaries who inappropriately
received benefits. We also believe SSA avoided paying an estimated
$1.4 million by stopping these incorrect payments. Specifically,
182 of the 220 cases with overpayments totaling about $8.6 million
are being investigated for possible fraud. For example, we identified
a 54-year-old who obtained a second SSN using a friend's last name
for the sole purpose of getting a second SSI payment. From August
1991 until July 2004, SSA overpaid this recipient $89,654.
We made several recommendations to help SSA prevent similar improper
payments in the future and recover the overpayments we identified.
SSA agreed with our recommendations. As of April 13, 2005, SSA had
recovered $517,905 of the $9.2 million in overpayments (about 6 percent).
Also, our investigators continue to work the cases with possible
fraud involvement.
Our objective was to assess the potential for misuse of SSNs in
the service, restaurant, and agriculture industries. Of the 300 employers
reviewed for Tax Years 1999 through 2001, 2.7 million wage items
(14 percent), representing $9.6 billion in suspended earnings over
the 3-year period, were submitted that did not match SSA's records.
We identified various types of irregularities, such as invalid, unassigned
and duplicate SSNs and SSNs belonging to young children and deceased
individuals. Of the 100 agriculture employers, approximately 48 percent
of the wage items did not match SSA records. When we contacted the
employers and industry associations regarding the name and/or SSN
mismatches, we found that unauthorized noncitizens contribute to
SSN misuse.
Despite SSA's efforts to reduce the vulnerability to SSN misuse,
significant obstacles remain that have hampered SSA's ability to
combat SSN misuse, such as resistance on the part of employers to
participate in SSA's Employee Verification System that verifies employees'
names and SSNs, and the Internal Revenue Service's (IRS) reluctance
to impose civil penalties against employers who submit inaccurate
wage reports. Furthermore, privacy and disclosure issues have limited
collaborative efforts between SSA and Department of Homeland Security
(DHS).
We acknowledged SSA's efforts in working with the IRS to improve
employer wage reporting. However, until the IRS requires that egregious
employers verify employees' SSNs and holds them accountable for their
actions through an effective employer penalty program, it is unlikely
that employer wage reporting will be significantly improved. Also,
due to privacy and disclosure laws, SSA is unable to share specific
information with the Bureau of Immigration and Customs Enforcement
regarding employers who experience high name and SSN error rates.
Although SSA continues to coordinate with DHS on immigration issues,
it does not routinely share information regarding egregious employers
who submit inaccurate SSNs.
Our objective was to evaluate whether SSA considered the earnings
of disabled individuals when determining SSI eligibility and payment
amounts. SSA relies heavily on recipient self-disclosure of financial
resources. To detect unreported earnings, the Agency compares earnings
recorded on its Master Earnings File to the earnings used to calculate
SSI payments as shown on the Supplemental Security Record. When significant
discrepancies are found, diaries are established to alert SSA's field
office employees to the need for a review based on the match.
Based on our audit, we estimated that $12.4 million was overpaid
to about 11,880 recipients because SSA did not previously consider
all of their earnings when calculating SSI payment amounts. We also
estimated that, if the Agency resolved the earnings discrepancies
timely, an additional $74.7 million in overpayments to about 61,380
recipients would have been identified and subject to recovery.
We made two recommendations to assist SSA in identifying SSI overpayments
related to earnings. SSA agreed with our recommendations.
Chief
Counsel to the IG (OCCIG) Activities
Man Lies About Business to Receive Benefits
A Louisiana man told SSA he was not working in an application for
disability insurance benefits. In fact, he was working for a heating
and air conditioning company that he had formerly owned. The man repaid
the overpayment in full, and settled prior to the filing of charges
under section 1129, agreeing to the imposition of a penalty in the
amount of $2,000.
Woman Lies About Marital Status in Order to Collect SSI
A Colorado woman lied about her marital status on a 2003 statement
to SSA in order to continue receiving SSI benefits. SSA is currently
collecting a $42,548 overpayment from the subject. The Chief Counsel
proposed a $5,000 penalty and the subject has paid the full amount.
Woman Alters DNA Report in Order to Collect Benefits
The subject lied about the paternity of her son and submitted an altered
DNA report in furtherance of this deception. OCCIG negotiated a Settlement
Agreement with the subject, pursuant to which she will pay a $3,000
penalty and an assessment of $12,730 for a total of $15,730. The subject,
who is not currently receiving benefits, will submit a monthly payment
of $65 until such time as the $15,730 is collected in full.
Man Lies About School Attendance to Receive Benefits
An Alabama man told SSA he was attending Houston County High School
in order to continue receiving survivor/student benefits past age 18.
The high school confirmed that the man had left school 2 years earlier.
OCCIG imposed a CMP in the amount of $5,000 and a $2,491 assessment,
for a total of $7,491.
Helton & Barnes Excavating Co.
From 1993 1999, an employee conspired with his employer to conceal wages in
order to continue receiving Social Security retirement benefits. The employee/employer
scheme involved fictitious payroll checks, whereby the business owner agreed
to issue a check to the employee's sister-in-law, for the portion of the employee's
wages that exceeded the income amount then allowable under the Social Security
retirement test. The sister-in-law was not an employee of the company at the
time the checks were issued to her.
The fraud committed by the employee and the owner of the company resulted
in an overpayment of benefits in the amount of $12,326. A $10,000 CMP
was imposed against the employee, a $10,000 CMP was imposed against
the owner of the company in his individual capacity, and a $10,000
penalty was imposed against the owner in his capacity as owner, for
a total CMP amount of $30,000.
Iowa Resident Works, Golfs and Bowls While Collecting Disability
Benefits
An Iowa resident was collecting title II benefits for various health
problems, including a prosthetic leg. After an anonymous tip, OIG discovered
that the subject was working part-time at his wife's store. The agent
also discovered that, despite his disabilities, the subject was an
avid golfer and participated in a bowling league. Based on this investigation,
the Agency determined that the subject was overpaid $28,119 and is
presently collecting this overpayment. In addition, a CMP was imposed
and the man will pay a penalty of $4,000.
SSA
OIG Fraud Hotline Stats
From June 27, 2005 - July 1, 2005, the SSA OIG Fraud Hotline reported
the following:
Allegation numbers issued - 1,375
Total allegations received this fiscal year - 62,351
Our website provides guidelines for reporting fraud and a way to submit an allegation
to our Fraud Hotline. For more information, visit www.socialsecurity.gov/oig.
Eye
on OIG is published by the Office of Communication,
Valerie
Wood, Editor.
For past issues of an Eye on OIG, please visit the Media
Room.
www.socialsecurity.gov
