Skip to content
Social Security Online
Office of the Inspector General
OIG Seal image
Blank Spacer Image

EYE on OIG - June 6, 2008

Contents: Eye on OIG


Investigative Highlights

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 SSA.

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 SSA.

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 Task Force.

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 the scheme.

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 scheme.

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.

Audit Report Highlights

Supplemental Security Income Recipient Marriages Not Reported to the Social Security Administration (View Report A-01-07-27109)

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.

Assignment of Social Security Numbers to Noncitizens with Fiancé Visas
(View Report A-08-07-17044)

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 status expired.

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.

Joint Social Security and Canadian Beneficiaries Residing in the United States
(View Report A-01-05-25124)

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 United States.

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.

Social Security Administration Employees Acting as Representative Payees
(View Report A-06-07-17047)

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 Payee System.

Civil 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 Defrauds SSA

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 Negotiations

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 checks.

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 to SSA

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.

Around OIG

SSA OIG Designated "Above and Beyond" by Maryland Organization

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 Reporting

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.

SSA OIG Special Agent BadgeSSA OIG by the Numbers

Red Arrow 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.

Red Arrow During the week of May 19-23, 2008, the SSA OIG Fraud Hotline received 516 allegations.

Red Arrow 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 fraud.

Our website provides guidelines for reporting fraud and a way to submit an allegation to our Fraud Hotline. For more information, click here.
Eye on OIG is published by the OIG Office of External Relations.
For past issues of the Eye on OIG, please Visit our Library. Portal to U.S. government agencies Privacy Policy | Website Policies & Other Important Information | Site Map
Need Larger Text?
  Last reviewed or modified Monday Jun 16, 2008