SSA OIG to Co-Host 2006 PCIE/ECIE Training Conference and Retreat
We are pleased to announce that OIG will be co-hosting the annual 2006
Training Conference and Retreat for the President's Council on Integrity
and Efficiency (PCIE) and Executive Council on Integrity and Efficiency
(ECIE) . The PCIE was established by Executive Order 12805 on May 11, 1992,
to coordinate and enhance governmental efforts to promote integrity and
efficiency, and to detect and prevent fraud, waste, and abuse in Federal
programs, and is comprised of Presidentially-appointed Inspectors General.
The ECIE, comprised of Inspectors General appointed by the head of their
agencies, was also established by Executive Order.
This year's conference will take place May 1- 4, 2006,
at the Renaissance Portsmouth Hotel & Waterfront Conference
Center in Portsmouth, Virginia. The theme, Adapting to
Change, will focus on changes in the Inspector General
community from the time of President Carter's signing of the Inspector
General Act of 1978, to the present, with particular emphasis on the
changes brought about by the events of September 11, 2001
and by Hurricanes Katrina
and Rita.
SSA OIG is working with our co-host, the Smithsonian Institution's OIG,
to plan a dynamic event featuring addresses from local dignitaries and
elected officials, as well as panels and speakers on topics such as the
role of Inspectors General in disaster relief efforts and emerging challenges
in the area of IT security.
OI Case Highlights
Two Federal Employees Conspired to Steal $247,000 in Government
Funds
OI's Baltimore Office conducted an investigation in which an SSA employee
and a National Aeronautics and Space Administration (NASA) employee were
found to have stolen almost a quarter million dollars. Between 1996 and
2005, the SSA employee misdirected 11 attorney's fee payments to a bank
account owned by the NASA employee, who was not an attorney and had never
acted as one for SSA claimants. As part of the scam, the NASA employee
fraudulently processed government purchase orders payable to the SSA
employee via a non-existent organization that provided neither goods
nor services to NASA. Also, the two employees conspired to bill NASA
for training seminars and training handbook items that were never offered.
In September 2005, both employees signed a plea agreement charging them
with mail and wire fraud in connection with this scheme. In December
2005, the SSA employee was sentenced to 18 months in prison, to be followed
by 12 months of electronically monitored home detention, and was ordered
to pay full restitution to SSA and NASA. The NASA employee is scheduled
to be sentenced in March 2006.
Man Assumed Identity of Dead Brother While Collecting
Disability Benefits
The Fort Lauderdale OI Office opened an investigation of a Florida man
serving a term of supervised release with the Florida Department of Corrections.
The investigation showed that since 1996, the man had been collecting
disability benefits under his own identity, while working under his deceased
brother's identity. OI agents determined that the man had submitted his
brother's Social Security card and a fraudulent driver's license to the
probation office as identification, and reported work activity to his
probation officer under that identity. The brother had died in 1976.
The man pled guilty to one count of theft of government funds, and was
sentenced in October 2005 to 60 months in prison and 3 years of supervised
release. He was ordered to pay full restitution to SSA ($91,642).
Employee of Organizational Representative Payee Steals
More Than $109,000 in Benefits to Support Gambling Habit
In November 2005, an employee of the Scott County (Iowa) Community Services
Department (SCCSD) was sentenced to 12 months and 1 day in prison after
pleading guilty to theft of government funds. This sentence was based
on a joint investigation by OI's Des Moines Office and the Scott County
Sheriff's Office. The investigation revealed that the employee had diverted
funds from a collective account that she managed for SCCSD, which serves
as an organizational representative payee for several hundred Social
Security beneficiaries and SSI recipients. The investigation determined
that from May 2001 until her employment was terminated in November 2002,
the employee had diverted $109,471 from this account for her own personal
use, using the funds primarily to support her gambling habit. In addition
to the prison term, the employee was sentenced to 2 years of supervised
probation, and was ordered to pay full restitution to SCCSD.
Car Dealership Vice-President Guilty of Social Security
Fraud and Firearm Violations
Acting on an anonymous tip to the OIG Fraud Hotline, the OI Detroit Office
began an investigation of a Bay City, Michigan car dealership. The investigation
revealed that an employee had been working at the dealership under his
wife's SSN while collecting disability benefits under his own SSN. Pursuant
to a plea agreement, the employee and his wife each pled guilty to conspiracy
to defraud the United States, and testified against the vice-president
and general manager of the car dealership at his trial. A jury found
the vice-president guilty of making a false statement to SSA, and he
was sentenced in October 2005 to 24 months probation and restitution
to SSA of $91,577, to be paid jointly and severally with the employee
and his wife, who were previously sentenced.
While out on bail in the disability fraud case, the vice-president was
sentenced by the same judge as a result of being a felon in possession
of a firearm, and making false statements to a licensed firearms dealer
in connection with purchase of firearms. The firearms case was uncovered
by SSA OIG and worked jointly with agents from the Bureau of Alcohol,
Tobacco, Firearms, and Explosives.
OI/OCCIG Joint Case
Woman Assessed a $15,000 Civil Monetary Penalty (CMP) for Faking
Mental Disability
The Atlanta Cooperative Disability Investigations (CDI) Unit
investigated a 41-year-old woman who applied for Title XVI disability
benefits due to blindness in one eye, a heel spur, and mental illness.
The DDS had determined that the woman's physical problems alone were
not disabling, and there was no recent mental health treatment, so
DDS scheduled a psychological evaluation. The woman's behavior at the
psychological exam was so bizarre that DDS referred the case to the
CDI Unit. The examining doctor reported that the woman was totally
unresponsive during the clinical interview. The doctor observed her
drooling, rocking back and forth, staring blankly into space, and sucking
her bottom lip loudly while scratching her forehead. Family members
related a history of mental illness and said the woman was totally
dependent upon them for her activities of daily living.
A routine criminal record check revealed that the woman was on probation.
The probation officer reported that the woman came to her appointments
alone, could carry on coherent, relevant conversations, and was expected
to start a residential cleaning job in the near future. The probation officer
observed no unusual behavior. The woman had completed a community service
program and her supervisor commented on what a good worker she was. A local
deputy sheriff concurred with the probation officer's observations; he
had contact with the woman after arresting her. The DDS denied the woman's
claim, and a $15,000 CMP was imposed against the woman by OCCIG for false
statements made during her disability claim.
OCCIG
Activities
Phoenix Man Caught Collecting SSI Benefits While Selling Collectible
Kachina Dolls
In January 2005, OCCIG entered into a settlement agreement with
a Phoenix man who had been selling collectible Native American
Kachina Dolls while collecting SSI Benefits. On March 14, 2003, the
subject
had completed, signed and submitted to SSA a Statement of Claimant
or Other Person in which he reported that he did not work or receive
any income other than SSI benefits. An OIG investigation revealed
that the subject received income from the sale of the popular,
collectible Kachinas. The subject crafted and sold the sterling silver
enhanced
Native-American artwork dolls for anywhere from $300 to $1500 each.
His customers included major art galleries throughout the State
of Arizona. As a result of this concealed income, the subject improperly
received over $36,000 in SSI benefits. Upon completion of our investigation,
the subject's benefits were terminated and he agreed to pay a $5,000
penalty and $46,040 assessment in lieu of damages, for a total
CMP
of $51,040.
The OIG manages the Cooperative Disability Investigations program
together with SSA's Offices of Operations and Disability Programs.
The CDI mission is to obtain evidence of material fact sufficient
to resolve questions of fraud in SSA's disability programs. CDI Units
report material facts in a report of investigation, and during the
period July 1999 through July 2005, CDI investigative results were
used to support over 8,000 Disability Determination Services (DDS)
decisions to deny SSA disability benefits. This allowed SSA to avoid
improper payments of approximately $492 million. OHA is responsible
for conducting hearings and issuing decisions determining whether
a person may receive benefits. Hearings are held before an administrative
law judge (ALJ).
In this review, our objective was to identify circumstances that
may have resulted in the allowance of benefits at the hearings level
when a prior investigation conducted by a CDI Unit may have contributed
to a denial decision.
Our review of case folders for 100 ALJ decisions found that ALJs
may not have always been aware that a CDI unit investigation was
conducted and may not have always considered the investigative report
in making the disability decision. These circumstances may have resulted
in the allowance of benefits when a prior investigation by a CDI
unit contributed to a denial decision.
We made six recommendations aimed at resolving this issue. While
SSA expressed concerns over the cost and/or feasibility of two of
these recommendations, the Agency agreed with the intent of the recommendations
and is working to implement four of them. Additional details on our
findings and recommendations, as well as SSA's response, can be found
in the report, which can be accessed from the link above.
To eliminate the need for retaining paper applications, SSA is evolving
its "claims taking process" to an electronic environment. SSA
implemented three signature proxy alternatives to the pen-and-ink or "wet" signatures
- 1) Attestation, 2) Click and Sign, and 3) Witnessed signature. The
signature alternatives apply to cases processed on or after June 21,
2004, in SSA's automated claims systems, the Modernized Claims System
and the Modernized SSI System.
We assessed the adequacy of SSA's controls over the risks of using signature
proxies to sign applications for benefits. While additional claims processing
controls were implemented, such as modifications made to annotate the
Agency's claims systems for signature proxies and the retention of a
record of the application in the Online Retrieval System, we believe
the Agency should take additional steps to improve the process to help
mitigate risks.
The Agency agreed with six of our seven recommendations.
Studies SSA conducted in July 1999 identified approximately 130,000
SSI recipients who appeared, based on their earnings, to be insured
for benefits under the OASDI program. However, at that time, the
SSI recipients were not receiving OASDI benefits. Subsequent studies
in 2002 identified additional SSI recipients who appeared to be eligible
for OASDI benefits but were not receiving them. As of November 2004,
there were approximately 466,000 cases of SSI recipients identified
as possibly being insured for benefits under the OASDI program. The
Agency categorized these individuals as SDW cases.
Our review was undertaken to determine whether SSA had (1) identified
and taken actions to implement system enhancements to prevent future
SDW cases and (2) identified the universe of SDW cases.
In each of SSA's 10 regions, specialized teams of technical experts
worked with field offices, Federal/State Disability Determination
Services, program service centers and SSA's Office of Central Operations
to review and assess some of the SDW cases. The Agency advised us
that 127,287 cases had been completed through September 2005.
While SSA has undertaken several studies to identify all SSI recipients
who appear to be insured for OASDI benefits, it has identified additional
groups of cases with potential OASDI entitlement not included in
the universe of SDW cases. Further, the Agency has implemented system
enhancements to assist with processing SDW claimant cases. However,
failure to identify potential OASDI eligibility factors and programming
weaknesses limited the Agency's ability to identify SSI recipients
who may have been eligible for OASDI benefits.
We recommended that SSA (1) ensure enhancements to systems identifying
SSI recipients who may potentially be eligible for OASDI benefits
are made a top priority and implemented timely; and (2) continue
to process SDW cases, and pay OASDI benefits for those SDW cases
determined to be eligible for benefit payments.
SSA agreed with our recommendations.
Around OIG
OIG Component Renamed to More Accurately Reflect Role and
Functions
The Office of Executive Operations has been renamed the Office of Resource
Management (ORM). The new name more closely parallels the functions of
this component. ORM has lead responsibility for managing OIG's fiscal
resources including formulating and executing the budget, managing physical
facilities, developing OIG's strategic plan, and monitoring organizational
performance. ORM also develops and maintains administrative policy, coordinates
records management and leads OIG's activities relating to competitive
sourcing. All aspects of OIG's human resources operations, including
recruitment, training, performance management, awards, recognition, and
personnel policy within OIG also fall under ORM's purview. Finally, as
the manager of organizational resources, ORM provides information technology
to all OIG employees. This includes developing and maintaining software,
installing and maintaining computer equipment and providing general user
support to employees around the country.
The component structure and leadership in ORM has not changed. Stephanie
Palmer remains the Assistant Inspector General. Her deputy is Robert
Meekins. John Byrnes is the Director of the Budget and Logistics Division
and Ellen Schwartz is the Human Resources Division Director. The Information
Technology Division has two co-directors. Mike Arbuco leads software
development and Gary Czarnecki leads hardware and infrastructure projects.
SSA OIG Fraud Hotline
Stats
From February 12 - 18, 2006, the SSA OIG Fraud Hotline reported
the following:
Allegation numbers issued - 2,987
Total allegations received this fiscal year - 35,428
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.
Valerie Wood, Editor
For past issues of the Eye on OIG, please visit our Library.
www.socialsecurity.gov
