| Daughter Fraudulently Receives
$79,509 of Deceased Mother's Benefits
Our San Francisco office recently opened an investigation based
on a request for assistance from the City of Davis, California
Police Department. The investigation revealed that a 49-year-old
Davis resident received her mother's Social Security retirement
benefits from her mother's death in 1992 until February 2002.
Our investigation revealed that the last verifiable contact information
for the woman's mother was in Costa Rica, based on a letter she
mailed in 1992. Through subsequent investigation and interviews,
we located the beneficiary's son, who confirmed his mother's death.
When confronted with her brother's statement, the woman admitted
to concealing her mother's death and fraudulently receiving $79,509
in Social Security benefits. In November 2006, after pleading
guilty to theft of Government property, the woman was sentenced
to 27 months' incarceration and 36 months' probation, and was
ordered to pay full restitution to SSA.
General Contractor Conceals Work Activity to Receive Disability
Benefits
Agents in our Omaha, Nebraska office conducted an investigation
based on an allegation from the Omaha SSA office that a Title
II disability beneficiary was concealing self-employment income
from SSA. Our investigation revealed that the man was working
as a general contractor, remodeling homes and repairing roofs
and siding.
The investigation further showed that he was the owner and administrator
of a residential care facility. The man was paid in cash and used
his wife, and a second corporation, to conceal monies he received.
He pled guilty to having knowledge of an event affecting benefits,
and was sentenced in November 2006 to 5 years' probation and 6
months' home confinement, and was ordered to pay restitution of
$60,197 to SSA.
Couple Sent to Prison for Defrauding Banks and Credit Card
Companies of $2 Million
Agents from our Seattle, Washington office conducted an investigation
of a husband and wife who created multiple identities in order
to commit bank and credit card fraud. We determined that they
used fraudulent immigration documents and driver's licenses to
obtain Social Security numbers (SSN) in numerous identities, and
then used these identities to establish lines of credit. They
opened bank accounts, and deposited checks that were drawn on
closed accounts, or on accounts with insufficient funds. They
then withdrew the funds before the checks were returned as uncollectible.
In addition, they used the fraudulently obtained credit cards
to make purchases of expensive items, which they then returned
for cash.
Both husband and wife pled guilty to bank fraud and were sentenced
in October 2006 to prison terms and restitution. The wife was
sentenced to 46 months' incarceration and 5 years' probation.
The husband was sentenced to 63 months' incarceration and 5 years'
probation. In addition, they were ordered to pay restitution of
$2,153,637 to 20 financial institutions, and were ordered to forfeit
60 pieces of property purchased with illegally obtained funds.
Woman Creates False Identities to Defraud Federal Agencies
The Cleveland, Illinois SSA office referred an anonymous complaint
to our Chicago office regarding a woman allegedly working while
receiving Supplemental Security Income (SSI). Our investigation
revealed that the woman had fraudulently obtained two SSNs to
create false identities. The woman used one identity to conceal
from SSA her employment as a truck driver in order to receive
more than $101,000 in SSI payments. She used the second fraudulent
identity to purchase rental property in the Cleveland area and
to obtain Section 8 payments as a landlord. She fraudulently received
more than $19,000 in Section 8 funds.
As a result of our investigation, the woman pled guilty to multiple
charges, including Social Security fraud and possession of false
identification documents. In November 2006, she was sentenced
to 41 months' incarceration, and was ordered to pay restitution
of $120,163 to SSA and the U.S. Department of Housing and Urban
Development.
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| Office
of Audit Highlights
Organizational Review of the Office of Disability and Income
Security Programs
(View Report A-12-07-27162)
In March 2007, the Commissioner of Social Security requested
that we conduct a review of the organizational structure and functions
of the Office of Disability and Income Security Programs (ODISP).
ODISP is the SSA component that directs and manages the planning,
development, issuance of operational regulations, standards and
instructions for the OASDI, SSI, and international programs.
We interviewed 112 ODISP employees (17 percent) as well as a number
of employees in other SSA components, and reviewed documentation
related to ODISP's organizational structure and functions. We
found that ODISP is not focused solely on planning and program
policy issues, but is also responsible for several operational
functions. We found that some ODISP functions may be better aligned
to improve coordination and productivity, while other functions
appear to be inconsistent with ODISP's mission and may be managed
better elsewhere in SSA. In addition, our interviews with ODISP's
employees and several of ODISP's customers revealed a consistent
theme of poor communication within ODISP and with other SSA components.
SSA may be better served from a functional point of view if ODISP's
main focus were program policy. The Agency generally agreed with
our recommendations to:
Re-direct ODISP's focus to program policy.
Align similar/related functions within ODISP.
Delineate more clearly the role of ODISP with respect to other
components.
Improve communications within ODISP and other components.
Consider renaming ODISP and SSA's Office of Policy to clarify
the roles of each component, or combining ODISP with the Office
of Policy.
Accountability Over Duplicate Payments, Equipment and Records
in the Gulf Coast Hurricane Recovery Area (View
Report A-06-06-26137)
In this audit, we 1) reviewed SSA's process for identifying and
collecting overpayments resulting from duplicate payments issued
during the recovery period after the Gulf Coast hurricanes; and
2) assessed whether SSA safeguarded equipment and records disposed
of after the storms.
Because of the widespread need to serve beneficiaries affected
by the hurricanes, SSA modified its procedures for issuing immediate
payments, or third-party drafts (TPD). SSA issued 110,512 TPDs
nationwide from August 31 - October 31, 2005. Recipients who did
not receive a monthly payment, either by mail or electronic deposit,
were instructed to go to any open SSA office to obtain a TPD check.
We found that SSA was proactive in ensuring that benefits continued
uninterrupted, and was diligent in processing immediate payments.
In November 2005, SSA began to reconcile all TPDs to ensure that
they were accounted for and correctly recorded. This process identified
1,597 payments totaling $1,231,848 that were not initially detected
because of input errors. SSA mailed OASDI overpayment notices
to beneficiaries, and plans to collect SSI overpayments from future
payments. SSA agreed with our recommendation that they document
the process for identifying and reconciling duplicate immediate
payments, and incorporate these procedures in future disaster
recovery efforts.
We also assessed whether SSA adequately safeguarded equipment
and records disposed of after the storm. Numerous SSA facilities,
records, and computer equipment in the Atlanta and Dallas Regions
were damaged by floodwaters and had to be destroyed. SSA worked
with General Services Administration contractors in the destruction
and disposal of 247 computers and approximately 47,650 claimant
files.
We found that SSA generally followed policies and procedures
in the disposition of equipment. SSA contracted with two companies
to shred claimant files that were damaged. However, we learned
that one company transferred files multiple times before they
were destroyed, compromising the integrity of the records. We
also learned that some employees that had undergone background
checks were not the individuals who ultimately shredded the documents.
Finally, neither SSA employees nor approved personnel were present
to verify the final destruction of the files.
SSA agreed with our recommendations that when records containing
personally identifiable information are destroyed, SSA needs to
ensure that Agency policies and procedures are explicitly stated
in vendor contracts; it is clear as to who will be performing
the work; all contractor personnel undergo background checks;
and approved personnel are present during the destruction of SSA
records.
Supplemental Security Income Payments Mailed to Field Office
Addresses (View
Report A-06-06-26140)
We conducted this audit to determine whether SSA has complied
with the policies and procedures governing SSI payments mailed
to SSA field office (FO) addresses. SSA authorizes recipients
to use FO addresses to receive payments as a last resort, i.e.,
a recipient does not have a fixed home or mailing address. SSA
policy provides that when an FO authorizes use of the FO mailing
address, the manager must maintain records of check receipt and
distribution, and must follow recordkeeping and check-handling
procedures.
In June 2006, we identified 3,224 SSI recipients who used FOs
as their mailing address. We visited eight FOs to assess compliance
with policies and procedures, and while SSA had adequate policies
to control receipt and distribution of SSI checks, we notes instances
of noncompliance. All eight FOs admitted that they accommodated
recipients who did not meet the address of last resort guidelines.
We also found instances of incomplete recordkeeping, and further
found that none of the FOs returned undistributed checks to the
Department of the Treasury after 7 business days as required.
FO personnel indicated the delay in returning the checks avoided
the administrative burden of processing returns and issuing replacement
checks.
SSA agreed with our recommendations to reevaluate current policies
and consider expanding the circumstances under which a FO mailing
address can be used; ensure that checks are returned to the Department
of the Treasury as required, or revise the policy consistent with
sound management practices; and provide refresher training on
the use of FO mailing addresses.
SSI Recipients Eligible as Disabled Adult Children under the
Old-Age Survivors and Disability Insurance (OASDI) Program
(View Report A-13-07-17073)
Individuals who receive SSI payments may also be eligible for
benefits as disabled adult children (DAC) under the OASDI program
if they were disabled before age 22; are not entitled to a higher
OASDI benefit based on their own work; and have a parent who is
receiving OASDI benefits or who was insured at the time of death.
SSA policy provides that an SSI application is also considered
to be an application for OASDI benefits. We conducted this review
to determine if SSI recipients who previously received DAC benefits
were eligible for additional OASDI benefits.
After examining data extracts from SSA records and applying additional
screening requirements, we found 5,908 individuals who were receiving
SSI payments as of August 2006 and appeared to be eligible for
OASDI benefits. We randomly selected 200 cases for review, and
found that 137 appeared to be eligible for additional OASDI benefits.
Of the 137 cases, we selected 10 to assess their OASDI and SSI
payments, and determined that they were due underpayments of approximately
$114,000, which represented an average net monthly payment increase
of about $310. Based on our sample findings, we believe that 4,047
of the 5,908 SSI recipients we identified could be eligible for
additional OASDI benefits.
SSA agreed with our recommendations to determine whether the
5,908 identified SSI recipients are eligible for OASDI benefits;
calculate any underpayments due them; and evaluate ongoing internal
efforts to further identify potentially eligible individuals.
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Around OIG
OIG Officials Testify Before Congress
On June 7, 2007, Assistant Inspector General for Audit Steven
L. Schaeffer testified before the House of Representatives' Committee
on Ways and Means, Subcommittee on Social Security at a hearing
on employment eligibility verification systems. AIG Schaeffer
briefed the Subcommittee and answered questions regarding the
OIG's efforts to ensure accurate wage reporting and minimize SSN
misuse, and ensure that employer verification systems are accurate
and secure. Click here
to read the full text of Steve Schaeffer's Statement for the Record.
On June 21, 2007, Inspector General Patrick P. O'Carroll, Jr.
testified before the House of Representatives' Committee on Ways
and Means, Subcommittee on Social Security at a hearing on protecting
the Social Security number (SSN) from identity theft. IG O'Carroll
was invited to testify on a panel which also included officials
from the Federal Trade Commission and the Government Accountability
Office. The Inspector General briefed the Subcommittee and answered
questions regarding the OIG's efforts to prevent SSN misuse and
maintain and improve SSN integrity. Click here
to read the full text of the Inspector General's Statement for
the Record.
OIG Managers' Meeting 2007
The annual OIG Managers' Meeting was held at OIG Headquarters
in Baltimore, Maryland the week of May 14 - 18, 2007.
The Office of Audit (OA) and Office of Investigations (OI) held
separate planning sessions during the week. On May 14 and 15,
OA held its annual Mission-Critical Work Planning session. OA
plans to begin 104 audits and complete 102 audits during FY 2008.
OI managers met on May 15 and 17; topics for discussion included
joint investigative operations, Electronic Crimes Team investigations,
and administrative and training issues. In addition, SSA's Marty
Hansen and Sandra Sidlovsky briefed OI managers on the role of
SSA's Office of Quality Performance.
On Wednesday, May 16, OA and OI were joined by the Offices of
Resource Management and the Chief Counsel for the OIG Managers'
Meeting. Commissioner of Social Security Michael Astrue opened
the meeting with some welcoming remarks. Inspector General Patrick
P. O'Carroll, Jr. and Deputy Inspector General James Kissko then
addressed the managers regarding the previous year's accomplishments
as well as current and future issues of concern facing the organization.
Later in the day, Assistant Inspector General for Resource Management
Stephanie Hall and Chief Counsel Kathy Buller led a panel discussion
on the new Performance Assessment and Communication System, and
OA presented its Fiscal Year 2008 Audit Plan. The Managers' Meeting
ended with an awards ceremony, at which the Inspector General
presented the 2007 Inspector General's Awards and the 2007 Executive
Recognition Awards (details below).
2007 Inspector General's Awards
 We
are pleased to announce the winners of the 2007 Inspector General's
Award. This award is presented each year to individuals and teams
whose contributions and accomplishments have had a significant,
positive impact on OIG's ability to achieve its goals and objectives.
All of these awardees have demonstrated an exceptional level of
accomplishment and are worthy of the high commendation this award
confers.
The individual awardees are:
Joscelyn N. Funnié - Office of the Chief Counsel
to the Inspector General - Ms. Funnié is recognized for
her exceptional legal work during Fiscal Year (FY) 2006 in the
area of Civil Monetary Penalty (CMP) cases. As the top CMP producer
in her office, she was responsible for the imposition of $1,012,358
in penalties. She is also recognized for the expert guidance she
provides to OIG managers on work-related legal issues.
Cassandra L. Hall - Office of Audit, Policy Planning and
Technical Services Division - Ms. Hall is recognized for her effective
administration of the Office of Audit's budget and her continued
exceptional management of administrative operations. Ms. Hall
manages budgets totaling $1.15 million in travel, training, and
procurement, and she provides overall administrative management
of records for more than 50 headquarters employees.
Brian J. Knode - Office of Resource Management, Information
Technology Division - Mr. Knode is recognized for his exemplary
efforts in the planning, design, training, and operations of the
new OIG Multimedia Center. He worked closely with vendors and
the SSA Facilities Team to ensure the Center was truly state-of-the-art,
and he continues to serve as the primary Multimedia Center coordinator
and technical consultant.
Wayland H. Quon - Office of Investigations, Los Angeles
Field Division, Los Angeles Office - Special Agent Quon is recognized
for his outstanding investigative work during FY 2006. He led
the Los Angeles Office during this time period, closing 36 cases,
making 29 arrests, recording 23 sentencings/convictions, and reporting
$1,085,305 in SSA savings and recoveries.
Edward E. Reilly - Office of Investigations, Enforcement
Operations Division - Mr. Reilly is recognized for his exemplary
efforts to improve the reporting abilities of OIG's National Investigative
Case Management System (NICMS). Over the past 15 months, he worked
tirelessly to improve the reporting abilities of NICMS. His efforts
provided OI more accurate and timely tools to measure progress
towards achieving investigative goals and objectives.
Steven N. Sachs - Office of Audit, Financial Audit Division
- Mr. Sachs is recognized for his outstanding leadership of three
important audits during FY 2006. As Auditor-in-Charge of the Administrative
Costs Claimed by the District of Columbia Disability Determination
Services audit, the follow-up on the Internal Controls Over the
Processing of Social Security Number Cards audit, and a spin-off
audit to review SSA's oversight of its Presort Mail contract,
Mr. Sachs planned, conducted, and reported audit results in a
professional and ethical manner, and was instrumental in helping
the Office of Audit meet its FY 2006 goals.
The team awardees are:
Government Pension Offset (GPO) Audit Team - James J.
Klein, Joseph I. Robleto, Timothy E. Meinholz (Office of Audit,
San Francisco Audit Division) - This award is given in recognition
of the team's efforts to identify individuals estimated to receive
spousal benefits to which they may not be entitled. The GPO Exemption
for Texas School Districts' Employees audit identified an estimated
$2.5 billion potential abuse of the last day of employment exemption
of GPO.
Threats and Assaults in the SSA Workplace Training Team
- John F. Grasso, Scott E. Johnson (Office of Investigations,
New York Field Division, New York Office); Sharon B. MacDermott
(Office of Investigations, New York Field Division, Iselin Office);
Stephen J. Petro (Office of Investigations, New York Field Division,
Batavia Office); Thomas B. McMahon, Vito A. Delgorio, Bertha Sharret
(SSA, New York Regional Office) - This award is given in recognition
of the collaborative effort between OIG and the SSA New York Regional
Office in researching, designing, and creating an informative
presentation entitled "Threats and Assaults in the SSA Workplace."
This resource presentation provided SSA New York management staff
with valuable training to develop strategies for minimizing the
risk of becoming a crime victim in the workplace.
2007 Executive Recognition Awards
This year marks the first year for a new high-level monetary
award-the OIG Executive Recognition Award. This award recognizes
exceptional or outstanding team achievements and contributions
to OIG's objectives. Seven teams comprised of 46 employees were
selected to receive this award.
Computer Matching Act Streamlining/Federal Employees Compensation
Act Audit and Investigation Team - Jonathan L. Lasher, Amy
G. Thompson, Judith A. Ringle (Office of the Chief Counsel to
the Inspector General); Margaret A. Moore-Jackson (Office of Investigations,
Strategic Enforcement Division); Nancy L. Daniels (formerly Office
of Investigations, Strategic Enforcement Division, currently with
SSA's Office of Quality Performance); Victoria L. Vetter, Brian
K. Karpe, Ronald E. Anderson (Office of Audit, Financial Audit
Division) - The team recognized the increasing difficulties posed
by the Computer Matching and Privacy Protection Act (CMPPA), delaying
audits and investigations to the point where projects would not
be undertaken. Using the Federal Employees Compensation Act audit/investigation
project as a vehicle, the team initiated discussions with relevant
SSA officials, resulting in a streamlined and accelerated process
for OIG-related CMPPA agreements, and paving the way for OIG to
pursue projects that might otherwise have been abandoned.
Vernon Sukumu Investigative Team - Sarah E. Miller (Office
of Investigations, Los Angeles Field Division); Jack H. Trudel,
James A. Sippel (Office of Audit, San Francisco Audit Division)
- The team's outstanding efforts and cross-component cooperation
were instrumental to the investigation of an organizational representative
payee who misappropriated over $748,000 in benefits. The suspect
pled guilty to grand theft in August 2006 and was sentenced to
16 months' incarceration and ordered to pay restitution of $748,066
to SSA.
Performance Assessment and Communications System (PACS) Implementation
Team - Ellen M. Schwartz, Sandra R. Moffet, Mary C. Hipsley,
Rosita G. Acevedo (Office of Resource Management, Human Resources
Division); Robert L. Meekins (Office of Resource Management);
Sally M. Zeller (Immediate Office of the Inspector General); Amy
G. Thompson (Office of the Chief Counsel to the Inspector General);
Walter E. Bayer, Jr. (Office of Audit, Philadelphia Audit Division);
Kitt Winter (Office of Audit, Data Analysis and Technology Audit
Division); Bertha H. Richardson (Office of Investigations, Fugitive
Enforcement Division); Juan F. Riberas (Office of Investigations,
Strategic Enforcement Division) - The team planned, designed,
trained, communicated, and implemented the new individual performance
appraisal system piloted in OIG during the last 4 months of Fiscal
Year 2006 and fully implemented PACS for all staff in Fiscal Year
2007.
Eaton County Probate Guardian Team - John J. Keenan, John
A. Pollock (Office of Investigations, Chicago Field Division,
Detroit Office); Mark D. Bailey (Office of Audit, Kansas City
Audit Division); Elizabeth M. Juarez, Nichole C. Purnell (Office
of Audit, Chicago Audit Division) - The team's cooperative efforts
in the field led to the conviction of a guardian who misused over
$97,000 in Social Security benefits intended for 81 beneficiaries.
OIG Fraud Hotline Automated Referral and Response Team
- Monica O. Johnson, Bruce L. Daugherty, Belinda J. Robinson (Office
of Investigations, Allegation Management Division); Susan E. Moran
(Office of Investigations, Manpower and Administration Division);
Michael Arbuco, Amy A. Shemenski, Christopher A. Walters (Office
of Resource Management, Information Technology Division); Jerrod
A. Hinton (Office of Audit, Policy Planning and Technical Services
Division) - The outstanding efforts and cooperation of the team
resulted in the successful design and implementation of an automated
process for referring and responding to allegations received by
the Fraud Hotline.
Congressional Response Report Team: Accuracy of SSA's Numident
File - Kimberly A. Byrd, Theresa A. Roberts, Lauren A. Butts,
Charles A. Lober (Office of Audit, Birmingham Audit Division);
Shane M. Henley (Office of Audit, Atlanta Audit Division); N.
Brennan Kraje (Office of Audit, Policy Planning and Technical
Services Division); H. Douglas Cunningham (Immediate Office of
the Inspector General) - In response to a Congressional request
to assess the accuracy of certain Numident data relied on by the
Basic Pilot program, the team identified Numident errors that
may result in incorrect feedback to employers attempting to verify
employee information. The team identified an estimated 17.8 million
Numident records that contained discrepancies and approximately
616,000 number holders listed as foreign-born U.S. citizens in
SSA's records who were not actually U.S. citizens.
Oregon Disability Determination Services Appeal Team -
James J. Klein, Joseph I. Robleto, Timothy E. Meinholz, Daniel
L. Hoy (Office of Audit, San Francisco Audit Division); David
C. Rodriguez (Office of the Chief Counsel to the Inspector General)
- The Office of Audit found that the Oregon Department of Human
Services incorrectly charged indirect costs of approximately $3.9
million to SSA programs and filed a request for reconsideration.
Working with SSA's Office of General Counsel, the team provided
an analysis that demonstrated why the audit findings should be
sustained. As a result of the team's efforts, the Commissioner
of Social Security sustained the OIG audit findings.
Congratulations to all on these outstanding accomplishments!
Support for OIG Employees Serving Overseas
We would like to recognize the past and ongoing contributions
of our employees to the military efforts in Iraq and Afghanistan.
 Special
Agent Joseph Velling of the Seattle Office is stationed at
Bagram Airfield, which is 40 miles north of Kabul, Afghanistan.
The airfield sits in a mountainous valley located 5,000 feet above
sea level and surrounded by mountain ranges. Part of Joe's job
as the Base Staff Judge Advocate is to conduct legal reviews of
humanitarian assistance provided by the United States to the Afghan
people. Joe has also helped rescue people from landslides resulting
from flooding caused by winter thaw and rain, and he has also
helped repair bridges, dams, and roads. Joe is thankful that he
is in a "relatively safe" location, and is amazed at
the sacrifices made by servicemen and women who spend weeks in
the mountains, in dangerous situations and deprived of basic comforts
and conveniences. We want to thank Joe for his bravery and service!
Special Agent Mike Clemens of the Milwaukee Office was
ordered to active duty in support of Operation Iraqi Freedom in
December 2003. Mike served as the Master Sergeant in charge of
military Police Operations for the 330th Military Police Detachment
(Law and Order), an Army Reserve unit based out of Sheboygan,
Wisconsin. Mike was deployed to Kuwait in March 2004, and then
sent to Mosul, Iraq.
In Mosul, Mike supervised all Iraqi law enforcement recruiting
and training for Northern Iraq. In July 2004, he was contacted
by Army leadership in Baghdad, and within days, was selected as
the only Special Investigator assigned directly to the Abu Ghraib
Detainee Abuse Prosecution Team. Mike spent 9 months detailed
to III Corps Headquarters under Major General Metz. He interviewed
victims, witnesses, and suspects in Iraq, Kuwait, Germany and
the United States, and testified in two trials related to the
prison abuses. For his work on the case, Mike received the Meritorious
Service Medal, and was nominated for the Legion of Merit. He returned
to his OIG position in May 2005. We want to extend our thanks
and congratulations to Mike for his accomplishments.
Special Agent Manuel Rivera of the Puerto Rico office
was mobilized with the U.S. Army to Friedberg, Germany in support
of Operation Iraqi Freedom, as the Non-Commissioned Officer in
Charge of the Criminal Law Section for various bases in Germany.
His duties included preparing affidavits, wills, power-of-attorney
documents, and insurance documents on behalf of soldiers serving
in Iraq. On March 28, 2007, Manny successfully completed his mission
and received the Army Commendation Medal, National Defense Service
Medal and the Global War on Terrorism Service Medal. We want to
extend our thanks and congratulations to Manny for his service
and safe return.
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