How Could a North Oaks, Minnesota Couple Collect Disability Benefits Despite Having Millions in Assets?

Submitted by Daniel on

When most people imagine a case of Social Security Disability fraud, the think of individuals who are completely capable of working trying to obtain Social Security Disability benefits in spite of their physical health. In truth, there are many different facets of disability fraud, as a recent case in North Oaks, Minnesota has proven.

Assets do not always play a role in an individual's ability to collect disability payments. SSDI payments, for example, are insurance payments made to an individual when that person becomes disabled and is no longer able to work. The amount of that person's assets or passive income has no bearing on his or her ability to obtain Social Security Disability Insurance (SSDI) benefits. Title XVI payments and Medicaid benefits, on the other hand, are a completely different story.

SSI benefits and Medicaid insurance are intended for those who have limited income or assets. These programs are provided on an “as-needed” basis, and are intended only for those who are facing severe financial hardship.

How is it that a couple with millions of dollars in assets was able to obtain SSI and Medicaid benefits for their two disabled children? It would appear that the benefits were obtained illegally using fraudulent information.

Hurricane Katrina displaced many families during the catastrophic event. In 2005 the Hood family brought their triplets from Louisiana to Minnesota. The reason given for doing so was that the family was displaced due to the devastating damage done to the area by the hurricane. While living in Minnesota, Cynthia Hood applied for SSI and Medicaid benefits for her two disabled children. At the time of the application, she stated that she didn't own any property and that she had a single bank account with a balance of only $1,400. The information given qualified for for SSI and Medicaid assistance. It would later be discovered, however, that the figures given to qualify for these benefits were the furthest thing from the truth.

Cynthia Hood began receiving Social Security Disability benefits and medical assistance for her children in 2006. It is estimated that a total of $430,000 in disability and medical benefits was provided to the family. Unfortunately, this was money that should have gone to families that were truly in need as it became apparent that the Hoods were not.

Cynthia Hood claimed that her sole asset was a bank account containing approximately $1,400. In actuality, the woman has at least eight bank accounts that total approximately $680,000 and she has a retirement portfolio containing at least $20,000. She also owns two vehicles and a home in Louisiana. In fact, the home that she supposedly fled from was deemed habitable by FEMA after the hurricane hit and Cynthia Hood listed it for sale at $278,000 – and these are just the assets of Mrs. Hood.

Mr. and Mrs. Hood combined have a total of more than $1 million in cash assets and $1 million in real estate assets.

When an individual like Cynthia Hood applies for a needs-based program, the person who processes the application must go by the information provided to them by the applicant. Due to budget constraints and extremely limited resources, the Social Security Administration often overlooks discrepancies between the truth and what is reported on individual applications. If the applicant lies to the agency, they may obtain benefits to which they are not legally entitled.

Fortunately, there is some recourse for the agency in cases like the Hood's. If found guilty of Social Security Disability fraud, the Hoods will be forced to pay back all of the money given to them by the Social Security system and other needs-based programs and face substantial prison time.

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