Social Security Disability Frauds Sentenced to Prison

Submitted by Chris on Thu, 09/30/2010 - 11:22

The Social Security disability benefits received by most disabled individuals are relatively modest. However, when those benefits are multiplied by millions of recipients each month, they constitute a major expenditure by the federal government. In the interests of safeguarding public funds, the Social Security Administration is supposed to monitor those who receive disability benefits to ensure that if they recover from their disabilities to the extent that they are able to make more than the maximum income of $900 per month (the maximum income allowed in 2009), they are dropped from the disability rolls in order to free that money for someone else who is unable to work.

In a distressingly large number of cases, no follow up is ever initiated by Social Security, and thousands of disability benefit recipients continue to receive their monthly checks long after they are no longer entitled to do so.

Some are eventually caught. In 2010 alone, the following cases were reported in the news:

  • A former police chief was sentenced to federal prison for Social Security disability fraud in September, after having failed to report his return to full time employment. Approved for disability benefits in the late 1990s, the police chief lied to the Social Security Administration, stating that he was working 20 hours a week and earning $800 a month, when in fact he was working full time and earning $1,920 a month. He was sentenced to two years in prison and ordered to repay $43,374.50 of the $66,000 in disability benefits that he had received illegally since 2001.
  • A New York gas station owner bilked the system for over $360,000 in disability benefits, claiming his wife ran the service station he owned and operated. He has repaid the stolen benefits.
  • An 80-year-old Oregon man received his dead brother’s SSI benefits for 15 years before he was arrested. As part of a plea bargain, he is expected to be ordered to repay $139,061 in benefits and to go to prison for a year.
  • An Alabama woman who collected $96,949.40 in adult child disability benefits while she was in a common-law marriage that made her ineligible for the payments was sentenced to six months in prison.
  • In 2008, officials estimated that up to $11 billion in benefits were being paid to people who were no longer disabled. Although the Social Security Administration is supposed to review and re-evaluate the status of SSI and SSDI recipients periodically (usually every three years), the agency has fallen far behind in this task. At that time, 1.7 million medical disability reviews were overdue, another 1.7 million of them were coming due in 2009, and the agency expected only enough funding to process 1 million of these reviews.

    The Social Security Administration blames lack of funding and the almost overwhelming press of new claim reviews for its lack of follow through in cutting of payments to those who are no longer disabled or who no longer meet the agency’s criteria for receiving disability payments. With limited resources, the Social Security Administration opted to focus on new disability claims.

    Evidently the scope of the problem has caught the attention of lawmakers. This year, Congress increased the funds set aside for medical reviews and investigations by 10% over 2009 levels.

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