Another Field Office Closure

     The Amherst, NY Social Security field office is to close. Local politicians aren't happy.

Exactly Twenty-Five Additions To Compassionate Allowance List

     Social Security has made 25 additions to its "compassionate allowance" list. Why is it that additions to this list always come in round numbers?  Here's the new list:

1. Angiosarcoma
2. Atypical Teratoid/Rhabdoid Tumor
3. Chronic Idiopathic Intestinal Pseudo Obstruction
4. Coffin-Lowry Syndrome
5. Esthesioneuroblastoma
6. Giant Axonal Neuropathy
7. Hoyeaal-Hreidarsson Syndrome
8. Intracranial Hemangiopericytoma
9. Joubert Syndrome
10. Leptomeningeal Carcinomatosis
11. Liposarcoma- metastatic or recurrent
12. Malignant Ectomesenchymoma
13. Malignant Renal Rhabdoid Tumor
14. Marshall-Smith Syndrome
15. Oligodendroglioma Brain Tumor- Grade III
16. Pallister-Killian Syndrome
17. Progressive Bulbar Palsy
18. Prostate Cancer - Hormone Refractory Disease - or with visceral metastases
19. Revesz Syndrome
20. Seckel Syndrome
21. Sjogren-Larsson Syndrome
22. Small Cell Cancer of the Thymus
23. Soft Tissue Sarcoma- with distant metastases or recurrent
24. X-Linked Lymphoproliferative Disease
25. X-Linked Myotubular Myopathy

The New York City Fraud Allegations

     Here is the description of the alleged disability fraud conspiracy  in New York given by Social Security's Inspector General to the House Social Security Subcommittee today:

Upon retiring from the NYPD [New York Police Department] or FDNY [New York Fire Department] (a few of the defendants are other public employees), retirees would contact Esposito or Minerva, who were known within the New York City law enforcement community as men who could assist individuals in obtaining disability or retirement benefits. Esposito and Minerva were the recruiters, and generally instructed the potential applicants that, in order to obtain SSDI, their claim needed to include a psychiatric illness; and that they could create a convincing version of such an illness based on events that occurred while they were working, such as the September 11, 2001 terrorist attacks .

Once they had a new client reeled in, Esposito and Minerva would connect applicants with Hale, a disability consultant who would schedule the applicant with a psychiatrist or psychologist. Since a qualifying disability must be expected to last for a year or more (or result in death), these applicants would generally undergo treatment for a full year before applying. This medical evidence would be included in the applicant’s SSDI [Social Security Disability Insurance] claim, which would be completed and filed by Hale and by Lavallee , who would be the applicant’s attorney of record.

Esposito instructed applicants to exhibit symptoms of depression, anxiety , and related disorders during doctor visits . He coached them on how to act at an SSA consultative examination: how to dress, how to behave, and how to fail a concentration test. Finally, he coached them on specific claims to make, such as that they couldn’t concentrate or sleep, didn’t go out, and even that they were afraid of planes and large buildings, if they were claiming to be disabled based on their participation in the events following the 9/11 terrorist attacks. ...

Because they were treated for a year before even applying for benefits, their ultimate SSDI award included a lump sum retroactive benefit payment from the alleged disability onset date. These lump sum initial payments were between $10,000 and $50,000 . 

The law currently limits a representative's fee to $6,000 of an applicant’s lump - sum retroactive benefit , and with Lavallee listed as the attorney of record, he would generally receive a payment of $6,000 directly from SSA . However, the a greed-upon “fee” paid to the facilitators by these fraudulent beneficiaries was generally 14 months’ worth of benefits, as much as $45,000. 

To make these payoffs, Esposito instructed applicants to withdraw cash from their banks in small amounts so as not to trigger IRS reporting requirements or any suspicions on the part of their financial institutions. The applicants would then make cash deliveries to Esposito and/or Minerva of an amount equal to 14 months’ worth of benefits, less the $6,000 Lavallee had already received from SSA . Esposito and Minerva would then split the cash with their co-conspirators.

      Maybe it all went down exactly like this but it sounds bizarre to me. A few questions:

• Why were there all these middlemen?
• Why undergo a year of psychiatric treatment before filing the claim? You don't have to do that. The standard advice from reputable Social Security attorneys for claimants with psychiatric problems who are not in treatment is to file the claim now and get in treatment now. Don't delay doing either one.
• Here's the big question: I have a hard enough time persuading clients who unquestionably have psychiatric problems (and these include people with a history of multiple involuntary commitments due to mental illness) to get in treatment and stay in treatment yet the allegation here is that people who did not have psychiatric problems voluntarily submitted to seeing a psychiatrist over the course of a full year and repeatedly making false assertions to the psychiatrist. Would you do that?
• Why would these allegedly fraudulent claimants voluntarily pay vastly inflated attorney fees?

Did Social Security's Own Office Of General Counsel Decline To Prosecute NY Fraud Cases?

     In her written statement at today's House Social Security Subcommittee hearing, Acting Social Security Commissioner Colvin said that "In cases where Federal prosecutors do not take action on fraud cases presented by the OIG [Office of Inspector General], our Office of the General Council agency attorneys may prosecute these cases instead."

     Does this mean that it wasn't just the U.S. Attorney for the Southern District of New York who refused to prosecute the alleged disability fraud in New York City, that OIG had to shop these cases around to the state District Attorney because Social Security's own Office of General Counsel also refused to prosecute the cases?

Get Your Own House In Order

     A quote from the opening statement of Sam Johnson, the Chairman of the House Social Security Subcommittee, at today's hearing:  "The public is fast losing faith in Social Security, and I don’t blame them, because I have too."
     No, Representative Johnson, no matter how much you wish it were the case, the public isn't losing faith in Social Security. Alleged fraud by a few people isn't going to do that. And, no, Representative Johnson isn't losing faith in Social Security because of these allegations. He's crowing over them since he thinks he can use them as ammunition in the pointless Republican fight against Social Security. Republicans have been losing that fight for nearly 80 years now. A few fraud allegations isn't going to turn the tide in that battle.
     It's worth noting that it is a fact that the public is fast losing faith in Congress.

Today's House Social Security Subcommittee Hearing

     Patrick O'Carroll, Social Security's Inspector General, and Carolyn Colvin, Social Security's Acting Commissioner, will be testifying at today's hearing before the House Social Security Subcommittee on the alleged disability fraud ring in New York city. 

     The Chairman of the Subcommittee is planning to call for a review of Social Security's management structure. That may be a good idea but I have no idea what it has to do with the fraud allegations.Such a review would make more sense after a new Commissioner is nominated and confirmed.

     By the way, I hope someone asks the Inspector General why these cases aren't being prosecuted by the U.S. Attorney. I think that subject deserves exploration. It's certainly surprising and raises questions about the strength of these criminal cases.

When Will New Commissioner Be Nominated?

     The President is to make a "personnel announcement" this afternoon. It could be the nomination of a new Commissioner of Social Security but I wouldn't bet on it. There's been no sign that a new Commissioner will be nominated anytime soon. 

     Social Security has been operating with an Acting Commissioner now for about 11 months. It's time for the President to act.

Target Security Breach Affecting Social Security Recipients

     From WVEC:

The Target security breach may just be the tip of the iceberg. It now appears it's also affecting those who collect Social Security.

When you qualify for Social Security you receive a pre-loaded debit card [if you don't already have an account of your own]. It allows users to pay bills, buy groceries and withdraw cash.

If you used your Social Security US Direct Express debit card during the Target security breach, expect a call from your bank. That call will likely inform you that a new card is on the way. But in that 7-10 day period it takes to receive that new card, some accounts may be frozen.

Many of these card holders rely solely on the money they collect from Social Security so
not being able to access that money could pose a hardship.

     Query: Will the banks notify Social Security or the Treasury that the account numbers of these individuals have been changed? I'll guess that the answer is no. Will the banks warn recipients of government benefits that they need to notify the government that their account number has been changed? Again, I'll guess that the answer is no. If no one notifies the government, are the banks going to bounce Social Security payments back to the Treasury? I'll guess yes to this question. I hope my guesses are wrong because if my guesses are correct this will be a real mess.