Man Incarcerated for Working While Receiving Disability Benefits
Based on a referral from the Social Security Administration (SSA)
office in Lakeland, Florida, our Clearwater, Florida office investigated
a 64-year-old Florida man who had received Title II disability
benefits since August 2001.
The investigation revealed that the man was employed as a truck
driver for a national company from May 2001 to January 2007. The
man concealed his work activity from SSA, and received $102,471
in disability benefits to which he was not entitled.
Following our investigation, the man pled guilty to theft of
Government funds, and was sentenced in March 2008 to 5 months'
incarceration, 8 months' home detention, and 3 years' supervised
release. He was also ordered to pay restitution of $102,471 to
Woman Convicted of SSI Fraud after Concealing Living Arrangements
for 17 Years
Based on a referral from the SSA office in Rockford, Illinois,
our Chicago office investigated a Supplemental Security Income
(SSI) recipient for concealing her true living arrangements.
Our investigation determined that the woman's husband filed a
telephone application for SSA benefits. While taking the application,
an SSA employee heard the woman advise her husband to tell SSA
they were separated, believing that the call was on hold. The
SSA employee further reported that the husband responded, "It's
too late. I already told SSA we were only separated for four months."
Our agents later determined that since May 1990, the woman had
concealed her living arrangements with her husband in order to
continue to receive SSI.
The woman pled guilty to theft of Government funds, and was sentenced
In April 2008 to 10 months' incarceration and 3 years' supervised
release. She was also ordered to pay restitution of $79,152 to
Sisters Sentenced for Hurricane-Related Fraud Scheme
Our Baton Rouge, Louisiana office participated in a joint investigation
with the Department of Labor OIG, U.S. Postal Inspection Service,
and local authorities, as part of the Hurricane Katrina Fraud
The investigation revealed that a Louisiana woman devised a scheme
to defraud the Louisiana Department of Labor during Federal Emergency
Management Agency relief efforts. The woman filed false Disaster
Unemployment Assistance claims for herself and others using false
names and Social Security numbers (SSN). Also, she conspired with
a Louisiana Department of Labor employee to process the fraudulent
applications, and enlisted her three sisters as participants in
In April 2008, all four sisters were sentenced. The ringleader
pled guilty to mail fraud and aggravated identity theft. She was
sentenced to 4.5 years' incarceration and 3 years' supervised
release and was ordered to pay restitution of $150,233. The first
sister pled guilty to wire fraud and SSN misuse and was sentenced
to 4 months' incarceration, 4 months' home detention, 3 years'
supervised release, and restitution of $61,347. The second sister
pled guilty to wire fraud and SSN misuse, and was sentenced to
4 months' home detention, 5 years' probation, and restitution
of $32,772. The third sister pled guilty to access device fraud
and was sentenced to 5 years' probation and restitution of $7,742.
The Department of Labor employee is scheduled to be sentenced
at a later date.
Identity Theft Scheme Thwarted after 3-Year Investigation
Agents from our Seattle office, working with the FBI, U.S. Postal
Inspection Service, and U.S. Probation Office, participated in
a 3-year joint investigation into a large-scale identity theft
The investigation determined that insiders at a mortgage company
and escrow firm provided personal identifying information to co-conspirators,
who then used the information to take over bank accounts and establish
credit accounts throughout the states of Washington and Oregon.
More than $335,000 was linked to the conspiracy.
In April 2008, five co-conspirators pled guilty to charges including
conspiracy to commit identity theft, bank fraud, and aggravated
identity theft. Four were sentenced to varying prison terms of
up to 95 months, and all were sentenced to 5 years' supervised
release. Each co-conspirator was also ordered to pay restitution
ranging from $29,519 to $241,493 to local banks and merchants.
Supplemental Security Income Recipient Marriages Not Reported
to the Social Security Administration (View
The SSI program requires that individuals' income, resources,
and living arrangements be assessed on a monthly basis to determine
eligibility and payment amounts. SSA relies on SSI recipients
to voluntarily report any changes in their marital status or living
arrangements. The purpose of this audit was to determine whether
individuals were receiving SSI payments inappropriately by not
reporting their marriages to Old-Age, Survivors and Disability
Insurance (OASDI) beneficiaries.
We selected a random sample of 200 cases of recipients who may
have received SSI payments inappropriately by not reporting a
marriage to an OASDI beneficiary living at the same address. We
asked SSA to determine their marital status and whether they were
receiving SSI payments appropriately. Based on our sample, we
estimate that about 2,088 recipients were overpaid $24.8 million.
By stopping these payments, the Agency will save an estimated
$7.1 million over the next 12 months. Within the sample, recipients
were overpaid an average of $11,852-ranging from $70 to $86,465,
with a median of $8,229. These overpayments covered a period of
42 months, on average-ranging from 1 to 296 months (24 years),
with a median of 26 months.
We recommended, and SSA agreed, that it should review the remaining
cases from our audit population that are most likely to result
in overpayments due to unreported marriages.
Each year, U.S. citizens petition the Department of Homeland
Security (DHS) to allow their foreign fiancé to visit the
United States under a K-1 visa. The foreign national must marry
the petitioner within 90 days of arriving in the United States
or leave. After marriage, noncitizens with K-1 visas may adjust
their temporary immigration status to a permanent resident. We
conducted this audit to assess SSA's process for assigning SSNs
to noncitizens with fiancé visas.
Based on our analysis, we estimate that SSA assigned about 371
SSNs during our audit period to K-1 visa holders who did not marry
their American petitioner and remained in the United States beyond
the date DHS authorized. Furthermore, some of these individuals
had wages posted to their earnings records after their immigration
We recommended, and SSA agreed, that it should (1) clarify whether
K-1 visa holders must provide SSA with an Employment Authorization
Document (EAD) as evidence of work authorization when applying
for an SSN; (2) discuss with DHS the feasibility of not granting
work authorization to K-1 visa holders until they marry; (3) consider
altering SSA systems to prevent assignment of SSNs when the noncitizen's
immigration status has expired or will expire within 14 days;
(4) periodically review K-1 SSN applications to ensure that field
office personnel accurately recorded evidence codes; and (5) correct
evidence code errors we identified in our sample.
Some beneficiaries who reside in the United States may receive
benefits from both SSA and Human Resources and Social Development
Canada (HRSD). Generally, beneficiaries may continue to receive
benefits from both SSA and HRSD while residing in the United States.
However, because these individuals are living outside of Canada,
there is an increased risk that HRSD will not timely detect events-such
as death-that could impact a beneficiary's eligibility or payment
amount. In this audit, we worked jointly with Canada HRSD to confirm
the identities of joint SSA/HRSD beneficiaries residing in the
As of April 2007, there were 28,655 beneficiaries residing in
the U.S. receiving benefits from both SSA and HRSD. We limited
this population to 7,342 joint beneficiaries who were 69 years
of age or older, receiving $100 or more in monthly benefits and
residing within 120 miles of an OIG office or selected cities
in Florida and California. We selected a random sample of 275
individuals from the population we identified for personal contact
to verify that they were alive.
We confirmed the identities of almost all of the 275 joint beneficiaries
from our random sample. Of those, 270 beneficiaries (98.1 percent)
were alive and properly receiving benefits. Five beneficiaries
(2 percent) were deceased, and SSA and HRSD stopped their benefits
based on our findings.
An SSA employee may act as representative payee for a minor child
or incapable individual without prior approval. However, he may
not take any formal or informal action as an SSA employee in connection
with the claim, such as participating in the development of the
claim. We conducted this audit to evaluate whether SSA employees
are complying with representative payee requirements, and whether
employees are accessing records of beneficiaries for whom they
are acting as representative payees.
We found that, generally, SSA employees acting as representative
payees complied with representative payee requirements. Our review
of 200 randomly selected SSA employees acting as representative
payees revealed that the employees properly reported how benefits
were used for beneficiaries on annual representative payee report,
and informed SSA of changes that affected benefit payments.
We further found that SSA did not implement controls to prevent
SSA employees who are also representative payees from processing
transactions that updated payment records of beneficiaries they
served. However, SSA did implement controls to alert management
when these transactions occurred. These controls appeared effective,
because we did not identify any instances in the past 3 years
where an SSA employee updated the payment record of a beneficiary
for whom they served as a representative payee. We did identify
one instance in the past 3 years where an employee viewed the
payment record of the payee he or she served.
We recommended, and SSA agreed, that it should (1) assess the
continued suitability of SSA employees acting as representative
payees for individuals geographically separated from individuals
they serve; and (2) correct SSA records for instances where representative
payee information on the Master Beneficiary Record or other SSA
records does not match information recorded in SSA's Representative
Monetary Penalty Highlights
SSA is authorized under Section 1129 of the Social Security Act
to impose civil monetary penalties (CMP) for each false statement
made in applying for or continuing to receive SSA benefits, or
for neglecting to report to SSA changes that affect benefit eligibility.
SSA has delegated this CMP authority to OIG, which can impose
up to $5,000 for each false statement or omission, as well as
assessments in lieu of damages of up to twice the resulting benefit
overpayment. For fiscal year 2008 (through May 23), Office of
the Chief Counsel (OCCIG) attorneys have imposed $4,255,577 in
penalties and assessments under the OIG's CMP program.
Woman Acting as Representative Payee for Disabled Husband
OCCIG initiated CMP proceedings against a woman acting as representative
payee for her disabled husband. The CMP action was based on an
OIG investigation showing that the woman had made 23 false statements
to SSA within a 6-year period, resulting in the improper payment
of over $12,000 in SSI payments.
OIG agents found that the woman had reported incorrect income
and resources for her husband-including more than $11,000 per
month in insurance payments resulting from a car accident settlement.
In addition, she had failed to report her own earnings, and had
double-negotiated several SSI checks on behalf of her husband.
Our investigators also found that the woman had a history of fraud
against SSA before the most recent allegations involving her husband.
Although the woman did not face criminal proceedings, OCCIG initiated
a CMP action against her. In April 2008, OCCIG imposed a penalty
of $115,000 and an assessment in lieu of damages of $25,267.
Woman Assessed $25,000 Penalty After Multiple Double-Check
In April 2008, OCCIG assessed a $25,000 penalty against a woman
investigated by agents in our St. Louis, Missouri office for multiple
double-check negotiations (DCN). A DCN occurs when a beneficiary
or representative payee claims that a benefit check has been lost
or stolen, and requests an immediate payment from an SSA field
office. The individual then cashes both the original and replacement
Our St. Louis office interviewed the woman, who admitted knowingly
cashing both checks on multiple occasions, causing a fraud loss
of $3,243. She claimed that she needed additional money to support
her two adult children. The investigation further revealed that
after previous DCNs, the woman had refused SSA's suggestion that
she have her benefit payment directly deposited into a bank account.
She had also been arrested seven times on charges including burglary,
auto theft, and assault.
When prosecution of this case was declined, agents referred it
to OCCIG for CMP consideration. Our attorneys imposed a $25,000
penalty against the woman for her false statements to SSA. She
continues to receive SSA benefits, which are being partially withheld
to recover the remaining overpayment.
Disability Claimant Assessed $25,000 Penalty for False Statements
OCCIG initiated a CMP action against a man who made false statements
to SSA in his SSI disability application. The case was investigated
by the OIG's Cooperative Disability Investigations unit in Baton
Rouge, Louisiana, based on a referral from the Louisiana Disability
Determination Services. The disability examiner had noted inconsistencies
in the man's application, which raised suspicions of faking or
exaggerating disability claims.
Although the man claimed he did not leave his home unassisted
and was not capable of driving, CDI investigators observed him
driving to and from an SSA consultative examination. One law enforcement
official interviewed by CDI investigators stated that the man
had been known to earn money repairing stereo equipment at his
home. Moreover, the investigation revealed multiple driving-related
citations and a conviction for distribution of cocaine. The man
was on parole when he filed for SSI, but had not reported to his
parole officer in several months.
Based on findings from the OIG investigation, the man's disability
claim was denied, and the case was referred to OCCIG for CMP consideration.
Based on the false statements contained in the man's SSI application,
OCCIG attorneys imposed a $25,000 civil monetary penalty against
him in April 2008.
SSA OIG Designated "Above and Beyond" by Maryland
The Maryland Committee for Employer Support of the Guard and
Reserve (ESGR), within the Office of the Assistant Secretary of
Defense for Reserve Affairs, has chosen the SSA OIG for their
prestigious "Above and Beyond" award for continued support
to national defense efforts. Special Agent Manuel Rivera nominated
the OIG for a certificate of appreciation, and the Maryland ESGR
selected the nomination for the higher-level "Above and Beyond"
award based on the OIG's outstanding support of its employees
who are members of the National Guard and Reserves. The award
will be presented at the Maryland Central Region Employer Awards
Luncheon on June 26 in Timonium.
SSA earns Certificate of Excellence in Accountability and
For the tenth consecutive year, SSA has received the Certificate
of Excellence in Accountability and Reporting (CEAR) for its FY
2007 Performance and Accountability Report (PAR). The PAR was
prepared as a joint effort between OIG, BFM, and OCSO, and provides
information to the President, Congress, and the public to assess
the performance of SSA relative to its mission. The CEAR award
is presented by the Association of Government Accountants.
Inspector General in the Spotlight
During April and May 2008, Inspector General Patrick P. O'Carroll,
Jr. made public appearances in a variety of venues. In April,
Mr. O'Carroll was a featured speaker before the National Association
of Disability Examiners (NADE) and the Association of Government
Accountants (AGA). At a Great Plains/Southwest NADE conference
in Austin, Texas on April 9 and a Pacific Region NADE conference
in Los Angeles on April 22, Mr. O'Carroll discussed the disability
backlog, CDI efforts across the country, and other disability
fraud initiatives. On April 24, Mr. O'Carroll spoke at an AGA
conference in Dallas, Texas regarding the public policy decision-making
role of the OIG community.
On May 13, Mr. O'Carroll appeared at the SSA Disclosure Conference
at the Holiday Inn Inner Harbor in Baltimore. In his presentation,
Mr. O'Carroll discussed how privacy and disclosure issues affect
the OIG's audit and investigative work.
OIG by the Numbers
In Fiscal Year 2008 to date, SSA OIG's 19 CDI Units have closed
2,730 cases. CDI findings in these cases have led to projected SSA
program savings of over $136 million and non-SSA savings of more
than $87 million.
During the week of May 19-23, 2008, the SSA OIG Fraud Hotline received
During Fiscal Year 2008 through May 23, the SSA OIG Fraud Hotline
has received a total of 25,037 allegations. Of those, 19,945 (79
percent) were allegations of Title II or Title XVI disability program
Our website provides guidelines for reporting fraud and a way to
submit an allegation to our Fraud Hotline. For more information,
Eye on OIG is published by the OIG
Office of External Relations.