Chiropractic Office Involved In Fraud Scheme

     From a press release:

The 25th patient of a Jefferson County, Missouri chiropractic office involved in a multi-million dollar disability fraud conspiracy was sentenced Wednesday as part of an ongoing fraud investigation. Six more patients are set for sentencing next year. ...

The two chiropractors who owned and operated PowerMed Inc., Thomas G. Hobbs and Vivian Carbone-Hobbs, are in federal prison, serving four-year prison terms. Hobbs was ordered to repay $4.3 million; Carbone-Hobbs was ordered to repay $16.4 million. ...

Many patients worked at Anheuser-Busch. ...

[The chiropractors] charged patients fees of thousands of dollars to prepare disability forms and coach them on how to lie about their ability to perform basic daily tasks such as lifting, standing, walking, sitting and taking care of their personal needs. According to evidence and testimony presented at the trials ... some patients were presented with a “Disability Package Pricing” sheet that listed the fees ranging as high as $8,600 for PowerMed to handle various disability claims options, including qualifying for Social Security disability, short-term disability, private insurance and insurance that would pay off auto or other loans. The total fees exceeded more than $13,000 for some patients. ...

    I don't understand how anything coming from a chiropractor's office could have much impact on a disability claim. They sure don't when they come up -- legitimately -- in my clients’ cases.

Dad In Freezer Case

    The title of this New York Post article says it all:  Twisted son left dad’s corpse in backyard freezer for years — so he could keep cashing his Social Security check. 

    You might think this is such a bizarre story that it must be without precedent. No, this happens semi-regularly at Social Security. As I've posted before, they've even made a movie about one such case -- Bernie.

GAO Criticizes CBSV

     From Social Security Administration: Actions Needed to Help Ensure Success of Electronic Verification Service, a report by the Government Accountability Office (GAO):

The Social Security Administration (SSA) launched the Electronic Consent Based Social Security Number Verification service in June 2020. The service seeks to reduce synthetic identity fraud, which combines fictitious and real information to fabricate an identity. The service allows authorized entities—generally financial institutions and their service providers—to verify an individual's name, Social Security number, and date of birth electronically. SSA spent about $62 million from fiscal year (FY) 2018 through FY 2023, based on SSA data. ...

SSA is required to fully recover the service's costs and collected about $25 million in user fees (40 percent of $62 million total costs) as of the end of FY 2023. SSA has not met its projections for fee collections due to lower-than-expected industry participation. SSA will need to collect about $14 million annually to meet its goal to recover all costs by the end of FY 2027, based on GAO's analysis (see figure). But it is unclear if SSA can meet its goal without increasing users or fees. Subscription data through December 2023 demonstrate that the service has not significantly increased users since enrollment opened in FY 2022, and fee collections decreased after SSA increased fees in July 2023.

 SSA officials told GAO they did not plan to take significant steps to increase use of the service. Industry participants GAO interviewed cited several factors limiting their use, such as difficult-to-interpret verification results. SSA also had not established performance measures and goals for the service's use and benefit. SSA could better ensure the service achieves its intended purpose of reducing synthetic identity fraud by developing strategies and assessing tradeoffs for expanding its use and establishing related performance measures and goals. ...

GAO is making seven recommendations to SSA, including that it implements appropriate controls over IT investments, updates cost estimation guidance, develops strategies to expand use of the service, and establishes related performance measures and goals. SSA concurred with all seven recommendations and stated that it will evaluate its policies and processes to determine how to address them. ...

    Note that the synthetic identity theft being discussed here isn't being directed at Social Security. It's directed at private financial institutions.

Supreme Court Refuses To Hear Conn Case

      The Supreme Court has declined to hear one of the Conn cases. The issue in this case is the statutory provision requiring that the agency act “immediately” when it detects fraud. In the Conn cases the agency didn’t act for 15 years. Did this failure give affected claimants who were not themselves guilty of fraud (their lawyer, Eric Conn, was the one who did that) a get out of jail free card? The lower courts didn’t buy that argument and the Supreme Court has refused to hear the case.

I Haven’t Read One Of These Stories In Years

      Why is it that haven't seen one of these stories in years? I used to see them regularly. From NBC Philadelphia:

A Philadelphia woman is accused of stealing social security disability benefits from a woman who officials said was found murdered and buried under six to eight feet of concrete in the basement of a home.  … 

Officials said the Philadelphia Medical Examiner’s Office and a forensic anthropologist concluded that the cause of death for E.W. was blunt trauma to the head and neck and the manner of death was homicide. It is estimated that the woman died at least four years and up to ten years prior to the recovery of her remains. …

This Has Only Limited Relevance To Social Security But It's Wild

 

    From a press release:

Richard Louis Crosby III, 37, of Mason, Ohio, pleaded guilty to three counts of Social Security number fraud. His plea agreement includes a sentence recommendation of 37 months in prison.

At various times throughout his scheme, Crosby used identifying information belonging to his elderly father, his girlfriend, a deceased man and others. He falsely told at least one law firm that he was a University of Michigan football player and an ex-Marine. ...

In both June and November 2021, Crosby was indicted and charged in Hamilton County with crimes related to stealing client funds. After his indictments, the U.S. District Court for the Southern District of Ohio entered an order disbarring Crosby.

In May 2022, Crosby was arrested in both of his Hamilton County cases. He was sentenced to probation in both cases in June 2023.

According to his federal plea agreement, while Crosby’s local cases were pending, he created an email account using “richardcwilliamsesq.” Crosby used the email address and the alias Richard Williams to communicate with a law firm in Washington D.C. in June 2021. The firm briefly employed “Williams.”

In June 2022 – at which point Crosby had been disbarred in Ohio and arrested on the Hamilton County charges – Crosby used his alias to apply online for an attorney position with a law firm in California. The firm offered Crosby a position as an associate attorney with a salary of $150,000. The defendant was employed under his alias for approximately three months and used a firm email address with his alias name.

In September 2022, Crosby used his alias to apply for an attorney position with a law firm based in Miami, Florida. Crosby met with a recruiter via Zoom, and represented himself as Richard Williams, a licensed attorney admitted to the bar in New York and D.C.

Crosby then met with one of the firm’s hiring managers in Florida and was ultimately offered employment in October 2022. His starting salary was $185,000 per year with a $5,000 signing bonus. Crosby used his girlfriend’s Social Security number, passport number and banking information to complete his onboarding paperwork at the law firm. ...

In July 2023, Crosby interviewed with the founding partner of a different California law firm. He also falsely claimed to work at the law firm of Kirkland and Ellis. After the founding partner asked Crosby to verify with whom he worked with at Kirkland and Ellis, Crosby withdrew his interest in the job.

A few days later, Crosby again used the alias to attempt to obtain employment. He interviewed over Zoom with senior management of a law firm located in Coral Gables, Florida. Crosby doctored a “screen shot” of the name Richard Coleman Williams Jr. in the online D.C. bar membership directory to attach with his resume.

The firm offered Crosby a starting salary of $195,000 per year with a $10,000 signing bonus, but eventually determined Crosby was using a false identity and did not hire him.

In August 2023, the defendant applied for a job at another law firm. The firm, located in Michigan, sent Crosby a letter offering a salary of $145,000 per year and a $10,000 signing bonus. When his credential information had discrepancies, the firm terminated their working relationship before issuing Crosby’s first paycheck.

In September 2023, one month prior to his arrest on federal charges, Crosby used a different alias to apply for a job at another law firm in California. He claimed that he was a University of Michigan football player and an ex-Marine.  Crosby was hired as an attorney at a salary of $250,000 per year. He used the Social Security number of a deceased man from North Carolina in his tax paperwork to the firm. ...

    This has the feel of a guy suffering from bouts of mania associated with bipolar disorder.

Social Security Fraud Leads To Lengthy Jail Terms

     From a press release:

Two Raleigh, North Carolina men, Joseph Kingsley Irona and Mamady Fadima Conde, were sentenced for conspiracy to commit money laundering. Both men previously pled guilty to the charge. Irona was sentenced to 84 months’ imprisonment and three years of supervised release. Conde was sentenced to 60 months’ imprisonment and five years of supervised release. ...

According to court documents and other information presented in court, Irona and Conde were involved in a highly complex network of bank accounts at multiple financial institutions. This network was used for laundering over $1 million criminal proceeds derived from various fraud schemes, particularly identity theft. One particularly intricate scheme involved the misuse of stolen victim identifiers to submit online applications for Social Security retirement benefits in victims’ names. After the applications were approved, the resulting payments were unlawfully deposited into accounts within the money laundering network, including accounts held by Irona and Conde. After receiving criminal proceeds, Irona and Conde took elaborate steps to dissipate the funds and obscure their source and destination. ...

Not Good News For Those Who Love Telework

 

    From WISH-TV:

A former Social Security Administration employee has been charged with one count of wire fraud after officials say he defrauded the organization for over three years. …

According to court documents, Christopher Markham, 40, had been employed by the administration and assigned to an office in Anderson. 

Between February 2019, and June 2022, documents say Markham “made it appear” he was teleworking his full-time job for the SSA during regular workdays. But instead, he was working as a home inspector for his own company, Markham Inspection Services. 

Markham continued to collect his full federal salary and benefits from the SSA at the time, attorneys said.

The release says Markham “routinely” performed home inspections, making it appear as though he was teleworking while working for the SSA, while hiding that he was not performing administrative work by allowing his wife and mother access to his Social Security Administration computer to send emails. …

Former SSA Employee Sentenced For Fraud

      From the Times Leader of Scranton, Pennsylvania:

A former employee with Social Security Administration was sentenced to three years in federal prison for pandemic relief fraud.

U.S. District Court Judge Malachy E. Mannion sentenced Takiyah Gordon Austin, 47, formerly of Wilkes-Barre, to three years in federal prison and three years of supervised release on charges of wire fraud and aggravated identity theft, according to U.S. Attorney Gerard M. Karam.

Austin was also ordered to pay $288,590 in restitution.

Austin, as a claims specialist, filed Pandemic Unemployment Assistance claims for ineligible recipients in exchange for payment from the individuals, according to a news release. …

A Theory

     I've been thinking about that post yesterday concerning a man who visited a Social Security field office to obtain a replacement Social Security card. He was given a sheet containing a telephone number he could call to get the card replaced. He called the number and found that it wasn't Social Security on the other end but a scammer. The number on the sheet was one digit different from the real number he should have called.

    My initial thought was that someone at the Social Security field office must have been in cahoots with the scammers but one fact kept drawing my attention -- the number the man was given to call was only one digit different from the real number. If you had someone on the inside who was funneling calls to you, why would you go to the trouble of obtaining a phone number so similar to the real one?

    Let me posit a theory for what happened. Nobody at Social Security was in cahoots with the scammers. The number on the sheet was a simple typo. What had happened was that scammers had obtained as many telephone numbers as they could that were one digit different from the real number. Probably they did this for many offices. They could then expect a steady stream of misdials from people who thought they were talking with a Social Security office. By chance, the sheet handed out by Social Security funneled more calls to them but it wasn't part of their scheme. Actually, the typo may end up exposing their scheme.

    That's my theory. Have you got a better one?

What Happened Here?

      From The Intercept:

“We need to let you know you have been selected for $100 in rewards.”

It was a cheery automated message, not what I expected when I called the number for the Social Security Administration’s primary office in Manhattan. The message went on: “Simply press 1 now to be connected to a live agent and claim your gift today.”

I double-checked the number, which a Social Security employee had just given me at the agency’s local office in Harlem in late February. I needed to replace a lost card, which was a service only offered at certain locations, the agent told me. He slid me a flyer and circled the contact information for the office in the Financial District in Manhattan.

“You can call this number to try making an appointment,” the agent told me.

Still sitting in the lobby of the Harlem building, I dialed the number a couple more times, and each time reached a different grifter: I was eligible for another $100 gift card to Walmart, then help getting “free insurance.” I just had to hand over my name and address, to “confirm you’re eligible,” one scammer said. …

Still sitting in the lobby of the Harlem building, I dialed the number a couple more times, and each time reached a different grifter: I was eligible for another $100 gift card to Walmart, then help getting “free insurance.” I just had to hand over my name and address, to “confirm you’re eligible,” one scammer said. … 

Reached for this story, Social Security employees at the Harlem office did not answer detailed questions about how this version of the flyer came into existence. “We were made aware” of the scam number on the flyer, one ticket agent said, “and that’s why we stopped giving those out. … 

On closer inspection, the scam phone number was off by a single digit from the real direct line to the Manhattan Social Security office, and the phone numbers for other offices were legitimate….

SSA Employee Charged With Embezzling $1.8 Million

     From a press release:

On March 6, 2024, a federal grand jury in the District of Puerto Rico returned a 17-count indictment charging Myrna Faria, a.k.a. Myrna Oliveras-Santiago, with theft of government funds ...

According to court documents, Faria was employed by the Social Security Administration (SSA) from approximately 1991 through 2019 as a “Social Insurance Specialist” and “Claims Specialist” working in the Workload Support Unit in San Juan, Puerto Rico. From March 2012 through March 2024, Faria embezzled and stole SSA funds, namely Retirement Insurance Benefits, Survivors Insurance Benefits and Auxiliary Benefit payments, to which she knew she was not entitled. In total, Faria stole approximately $1,812,455.10. ...

Faria utilized her position within SSA to submit false claims on behalf of others, using the identity of individuals she believed to be deceased. She then approved those false claims and submitted her own bank and address information to fraudulently receive the corresponding SSA beneficiary proceeds. Faria proceeded to withdraw, transfer, and spend the money from the accounts that fraudulently obtained the SSA funds. Over the span of twelve years, Faria submitted and approved 13 fraudulent claims. A total of 10 fraudulent claims were still active and receiving funds as of the date of the Indictment. ...

NY Times On Social Security Scams

     The New York Times is running a piece on the ongoing scandal of criminals, by hook or crook, obtaining enough information about a person receiving or eligible to receive Social Security benefits and then convincing the Social Security Administration to divert those benefits to the criminals. It happens thousands of times a year and involves tens of millions of dollars. It goes on and on with no apparent fix in sight.

Increase In Social Security Fraud

     From Newsweek:

The Social Security Administration (SSA) has issued a warning for Americans regarding scams that are stealing benefits from thousands of recipients each year. ...

According to the SSA's Office of the Inspector General, there was a 61.7 percent increase of reported scams between Q3 of the financial year in 2022 and the same period in 2023. In the former, just over 13,000 scams were reported, rising to 21,080 in the latter. ...

[T]hose under 50 were most likely to fall for scams ...

Rampant Scamming Of Social Security Recipients

     From Newsweek:

More than $100 million is lost each year due to Social Security scams, new figures from the Federal Trade Commission show.

Already in 2023, the FTC has received reports of 164,413 government imposter scams, with social security scams being the most common of all. The Social Security Administration saw 38,852 reports, with a total of $101.58 million lost to government-impersonating fraudsters. ...

OIG Report To Congress

     This is from the Semiannual Report to Congress prepared by Social Security's Office of Inspector General. Note that 143,816 total allegations of fraud were received but there were only 228 indictments or criminal informations issued. That's a pretty low ratio. Note also the vast number of imposter scam allegations received. This is where the real fraud problem is at Social Security. (I received a call earlier this week from a former client who was the recent victim of imposter fraud. How long will it take before his benefits are restored?)

Click on image to view full size

    Also, why is Gail Ennis still the Inspector General?

Other People Have A Dream; He Had A Fake Bomb

      From WRDW in Augusta, GA:

The Richmond County Sheriff’s Office bomb squad and other officers were called to [the local Social Security field office]..

Once on scene, deputies were given a description of a man with a red jacket carrying a book bag.

The sheriff’s office identified Keyon Dickens, 38, of Blake Drive, as the suspect.

Deputies saw Dickens walking along the side of the building and ordered him to drop the book bag, the report states.

Officials say Dickens dropped the bag, was detained and walked over to the patrol vehicle.

According to the report from the sheriff’s office, deputies found a white paper towel on Dickens, that had “I have a bomb” written on it.

While the bomb squad responded, deputies say Dickens “requested if he was going to be on the news and that we should loosen his handcuffs so that he looks good for the news.” …

Suspect In Custody After Suspicious Package Found At Georgia Field Office

     From WRDW/WAGT:

A suspect was taken into custody after a suspicious package was found at the Social Security Administration office [in Augusta, GA] on Tuesday, according to the Richmond County Sheriff’s Office. ...

 By 1 p.m., the bomb squad had cleared a suspicious package and a suspect had been taken into custody, according to authorities. ...

How Field Offices Waste Their Time

     From a "Dear Colleague" letter from Dawn Bystry, Deputy Associate Commissioner, Office of Strategic and Digital Communications, Social Security Administration:

Recently, we notified you that we are no longer accepting faxed applications. We appreciate the feedback we received on the notification and want to provide clarifying information. ...

As you know, the COVID-19 pandemic disrupted our services and the public’s ability to apply for benefits in person. In response, we implemented various temporary flexibilities – temporary changes to our policies and business processes. These flexibilities included accepting faxed applications as validly signed applications if they contained a legible, handwritten signature.  ...

With the end of the COVID-19 Public Health Emergency as of May 11, 2023, we evaluated our temporary flexibilities and decided to discontinue accepting faxed applications. Since we have reopened our offices to walk-in traffic and expanded in-person services, we determined that continuing to accept signatures on faxed applications was no longer justified given the risk that bad actors could use faxed applications to commit fraud. However, you can still use a fax to help your clients. Although we will no longer accept faxed, signed applications as valid applications, a claimant can still submit a faxed application to establish a protective filing date. Upon receiving the faxed application, we will contact the claimant or a proper applicant, go over the information provided, and obtain a signature to validate the application. ...

    I've got a few questions:

• What degree of problem has there ever been with faxed claims?
• Why is a faxed claim more subject to fraud than a mailed claim or any other type of claim?
• How does a fraudulent filed disability claim actually get approved? They don't just look at the form and put someone on benefits. (I know there's presumptive disability but that really wouldn't get you very far with a fraudulent scheme.) Disability claims have to proceed through disability determination. That usually involves phone calls with the claimant. Medical evidence is gathered. There is at least one internal level of review after a determination that someone is disabled. Don't you think there would be problems getting a phony claim through all this without anyone noticing that something looks fishy? I'm no expert on fraud but I'm pretty sure that there are easier ways to commit fraud than submitting a fraudulent disability claim by fax.
  
• Does Ms. Bystry have any clue about the degree of stress that the field offices are under? Maybe she should work in one for a month or two.
  
• Why does Ms. Bystry think it important to waste field office time with such obsessive concerns?
• If she's so concerned about security, maybe she should just force claimants to show up in the office with three types of identification? (I hope I'm not giving her ideas.)
• Is there anyone over Ms. Bystry who can ask whether this emphasis on security is a bit too much?

I Love The Disguise Part!

Only an illustration

     From a press release:

A 38-year-old Harlingen [TX] resident is now in custody on allegations he created false profiles to steal government money ...

Authorities arrested Lee Marvin Nichols today. ...

According to the three-count indictment, returned June 27, Nichols was a claims specialist at the Social Security Administration (SSA) in Harlingen.

Nichols allegedly created fictitious profiles for two children that did not exist. The indictment alleges Nichols linked the profiles of the fictitious children to a recently deceased man and a disabled woman living in Mexico in an attempt to create survivor benefits application.

Nichols used debit cards issued to the children to withdraw funds, according to the charges. When he would obtain the funds, he allegedly attempted to disguise himself by using hats pulled down over his face, sunglasses, balaclavas and other clothing to conceal his appearance.  ...

    What was the point of the disguises? His digital fingerprint was all over the cases at Social Security.