Nov 2, 2018

Field Office Supervisor Steals Over $700,000 From Claimants

     A press release:
RALEIGH, N.C. – Robert J. Higdon, Jr., the United States Attorney for the Eastern District of North Carolina, announces that a Federal grand jury in Raleigh has returned a thirteen-count indictment charging STEPHANIE CHAVIS, age 42, of Saint Pauls, North Carolina, with ten counts of Wire Fraud, two counts of Aggravated Identity Theft, and one count of Theft of Government Property.
The indictment alleges that beginning in or about August 2010, and continuing until in or about April 2018, CHAVIS engaged in a scheme to defraud the Social Security Administration by using her supervisory position to divert more than $700,000 in funds meant for SSI beneficiaries into bank accounts controlled by CHAVIS.
The indictment further alleges that CHAVIS advanced this scheme by convincing unsuspecting employees to manually process unauthorized payments on SSI beneficiary accounts using the beneficiaries’ personal identifying information and CHAVIS’s bank account information.
If convicted of all counts, CHAVIS faces a maximum penalty of twenty-four years imprisonment. She also faces a minimum two-year consecutive term of imprisonment on each aggravated identity theft count.
The charges and allegations contained in the indictment are merely accusations. The defendant is presumed innocent unless and until proven guilty in a court of law.
The case is being investigated by the Social Security Administration’s Office of the Inspector General. Special Assistant United States Attorney Tamika Moses is prosecuting the case for the government.
     How did she get away with this for almost eight years? I thought there were internal controls in place that would catch something like this. Wouldn't the people whose money was stolen have noticed and said something? My guess is that whatever internal controls have been in place are about to get strengthened nationally.
     My firm deals extensively with that field office. I think it's about to get turned upside down. I hope they're able to handle their normal workload.
     I also hope that Social Security promptly pays the money that was owed to the claimants involved. That should be a priority.


Anonymous said...

Hopefully the Administration compensates for the investigation with additional workhours or shifting some responsibilities to neighboring offices.

As to how the supervisor got away with it for almost eight years, I suspect that won't be made public. Any insight would just allow more abuse in the future by exploiting that knowledge. One of the few areas I believe a FOIA denial might make some sense.

As to whether the SSI beneficiaries will get the improperly diverted money, that presumes they exist. I imagine it is possible the supervisor had created the accounts out of whole cloth. Either that, or she targeted deceased (less likely, as I imagine there are guards in place on that) or the mentally incapacitated who may not have been aware of the diverted funds. Maybe even used the in-kind support and maintenance reductions to cover things up.

Interesting stuff.

Anonymous said...

I could be wrong but the way I read "convinced unsuspecting employees to manually process unauthorized payments on SSI beneficiary accounts" could mean that the diverted monies were never intended for the beneficiaries and they did not lose anything they were entitled to. Similarly, the diversion of "funds meant for SSI beneficiaries" could just mean stealing the government's money, i.e., this was more akin to robbing a bank than to draining individuals' accounts or stealing checks out of mailboxes.

Anonymous said...

Management has been obsessively focused since 2010 on manipulating data to establish production metrics for bargaining unit employees and using their manipulated data to fire bargaining unit employees who don’t meet the metrics or coerce them into resigning - so absolutely no surprise at all that a management employee could get away with stealing for 8 years! She’s likely not an isolated case.