Big Employee Fraud

      From a press release:

 A former Social Security employee has admitted to conspiracy and aggravated identity theft, announced U.S. Attorney Nicholas J. Ganjei. 

David Lam, 45, Pearland, was an operations supervisor and claims specialist for the Social Security Administration (SSA) office in Houston. …

Lam admitted to working with various coconspirators—typically, women with children—to file fraudulent survivor benefits applications listing the deceased men as the children’s fathers or stepfathers. If true, this would have entitled the women to receive benefits while raising their children as widows. However, the women had no connection to the men listed on the applications and the deceased men did not father the children. To facilitate his scheme, Lam would utilize the deceased men’s names, dates of birth and death and Social Security numbers. 

He would also instruct the coconspirators to split the stolen funds with him. The women would transfer funds via applications like Zelle, CashApp or Chime. Lam agreed to take responsibility for causing $3,346,280 in loss to the SSA and has agreed to pay that amount in restitution.    …

A New Scam

      From Social Security’s Office of Inspector General:

The Office of the Inspector General (OIG) for the Social Security Administration (SSA) is warning the public about a growing scam involving fraudulent remote job offers falsely claiming to be associated with SSA or other government agencies.

Scammers are posing as hiring personnel or recruiters and offering fictitious remotepositions — such as “administrative assistant,” “claims processor,” or “virtual benefits coordinator.” These scammers may use fake SSA email addresses, official-looking documents, or spoofed phone numbers.

Scammers may ask for personal information such as Social Security numbers, banking details, or copies of government-issued IDs. Victims may be told to pay for training materials or computer equipment as a condition of employment. …

LOL: “Bisignano Coming To Dislike DOGE.” AI Not Ready For Prime Time. Who Could Have Predicted?

       From the Washington Post:

The U.S. DOGE Service arrived at the Social Security Administration this year determined to slash staff and root out what it claimed was widespread fraud and wasteful spending — a mission Elon Musk’s cost-cutting team has pursued across the government.
But as of this week, many of the major changes DOGE pushed at Social Security have been abandoned or are being reversed after proving ineffective, while others are yielding unintended consequences and badly damaging customer service and satisfaction. The problems come as the agency struggles to cope with a record surge of hundreds of thousands of retirement claims in recent months. …

Social Security is poorly positioned to handle the influx [of new retirement claims], according to several staffers, as well as records obtained by The Post. Thousands of employees have taken the Trump administration’s early resignation offer or its early retirement offer, depleting the workforce and leaving some offices wholly bereft of staff, emails show. A DOGE-led move to slash staffing levels spurred many senior administrators scared of getting fired to accept reassignment to lower-level field office positions, slowing claims processing further as those employees are trained, according to employees and records. …

Bisignano is coming to dislike DOGE and hopes to minimize the team’s influence, the officials said. Another official, however, said Bisignano wants to “partner” with DOGE. …

DOGE staffers came to Social Security vowing to end fraudulent claims filed by scammers and grifters, and convinced that much of that activity was perpetrated over the phone, The Post previously reported. Career staff attempted to explain that wasn’t true, but to no avail, according to three current and former employees familiar with the matter. DOGE proposed ending phone service for retirement and disability claims, then narrowed its proposal after backlash from older claims recipients, advocates and lawmakers — then abandoned the idea.
Staff on the IT side developed a solution they hoped would pacify DOGE: A three-day hold on phone calls to allow extra checking for fraud, the employees said. Everyone, from rank-and-file career staff up to Dudek, knew the phone fraud check was not needed, the employees said. But they did it anyway.
“People lacked the fortitude to tell DOGE there was no fraud because they were afraid to lose their jobs,” one former high-ranking official said, referring specifically to claims filed by telephone. “They knew there was no fraud.” …

When a Post reporter called the [agency]phone line Friday afternoon, it took eight attempts to get transferred to an agent. The AI bot asked the reporter several times to end the call and gave unrelated information about a cost-of-living adjustment, Medicare Part B’s premium and benefits available to people after the retirement age.

Pointless Delays Because Republicans Just KNOW There's Massive Fraud At Social Security

     From Nextgov/FCW:

After installing anti-fraud checks for benefit claims made over the phone early last month, the Social Security Administration is considering walking back the policy after finding only two cases that had a high probability of being fraudulent.

The anti-fraud tool set up last month after weeks of changes to the agency’s telephone policies has slowed retirement claim processing by 25% and led to a "degradation of public service,” according to an internal May document obtained by Nextgov/FCW that examined potentially cutting the anti-fraud tool for phone claims. 

Under the new policy, the agency found that only two benefit claims out of over 110,000 had a high probability of being fraudulent — and they aren’t guaranteed to be so. Less than 1% of claims were flagged as even potentially fraudulent at all. 

“No significant fraud has been detected from the flagged cases,” the internal document said. 

The attention to fraud, however, did cause delays, as SSA changed its phone procedures to add the checks on the backend.  ...

    Republicans know to a moral certainty that there is massive fraud at Social Security and they will stop at nothing to find it even though all their efforts keep producing nothing of consequence. Pointless delays to others are a small price to pay for one's ideological beliefs. Accepting the truth that fraud is relatively rare at Social Security and that there are well-tested systems in place to detect the fraud that does exist is unacceptable to them.

What Do You Think?

      From Michigan Live:

BAY CITY, MI — A Midland County man and self-described “patriot” is facing a federal felony for allegedly threatening to kill Social Security Administration employees.

Zachary Brown, 40 of Coleman, on Monday, May 5, appeared before U.S. District Judge Patricia T. Morris, who informed him he was charged with one count of threatening to assault, kidnap, or murder a U.S. official. The charge is punishable by up to 10 years in prison. …

      I can’t copy the whole article here. Read it for yourself. I doubt that this is a case for prosecution. It’s an IVC case — involuntary commitment.  

Big Social Security Fraud Scheme — In Brazil

      From the BBC:

Brazil's Social Security Minister, Carlos Lupi, has resigned nine days after police unveiled a major corruption scandal which defrauded pensioners of $1.1bn (£829m). 

Federal police allege that over the past decade, the National Social Security Institute (INSS) made unauthorised deductions from payments made to millions of pensioners.  

The money was allegedly paid to several associations and unions, which then shared the earnings with corrupt government officials.  

Lupi has always denied any wrongdoing and said he ordered an investigation as soon as he heard about the allegations. …

Backing Away A Bit From Chaos

      Twitter, sorry, X posts from Social Security:

• Beginning on April 14, #SocialSecurity will perform an anti-fraud check on all claims filed over the telephone and flag claims that have fraud risk indicators.
• Individuals who are not flagged will be able to complete their claim without any in-person requirements.
• We will continue to conduct 100 percent ID proofing for all in-person claims. 4.5 million telephone claims a year and 70K may be flagged. Telephone remains a viable option to the public.

We’ve Got To Get All Those 150 Year Old People Off Benefits

      The Trump Administration is asserting that there are literally tens of millions of people receiving Social Security benefits even though they’re way over 100 years old -- 150 years old in many cases! This is a disturbing allegation.

     I think that Social Security has to treat this seriously. The thing to do is to look at what private enterprise does to prevent fraud committed by crooks using the identity of deceased individuals.

     Private enterprise, particularly financial institutions such as banks and insurance companies, use a database of deceased Americans to prevent fraud. It’s called the Death Master File. It’s state of the art and all financial institutions rely on the Death Master File.

     Social Security ought to use the Death Master File to prevent fraud.

     I’m sure that most of my readers know I’m being facetious. That state of the art Death Master File used widely by financial institutions was created and is maintained by the Social Security Administration which certainly uses it to cut off benefits to those who have died. Social Security isn’t beset by fraud committed using the identities of the deceased. It’s the exact opposite. It’s literally the very model of how to prevent it!

     I wonder if Fiserv, Frank Bisignano’s old company, uses the Death Master File.

Explain To Me How There Could Possibly Be Money In This

     From a press release:

... United States Magistrate Judge Embry J. Kidd has found Joshua Joseph Gray (45, New Smyrna Beach) and George Douglas Metz (51, Belleview) guilty of unlawfully video recording and failing to comply with official signs and directives inside multiple Social Security field offices. ...

According to evidence presented at trial, on various dates between November 2022 and January 2023, Gray and Metz each entered three different Social Security field offices in Central Florida while video recording. Gray and Metz continued to video record despite being informed by official signage and Social Security representatives that video recording is prohibited in Social Security offices without prior permission. ... Gray and Metz subsequently posted their video recordings, which depicted members of the public and Social Security representatives conducting business, on their public YouTube channels, where Gray and Metz were paid for their videos and solicited donations. ...

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….