Failure to Disclose


‘Failure to disclose” is a legal term that refers to a situation where important information has been omitted when there was an obligation to provide the information. For example, prior to purchasing a house, you might want to know that the foundation has a crack. Failure by the previous owner to disclose this information could have some serious legal and financial ramifications. An article published in The Roanoke Times tells about a Virginia man who collected over $200,000 in Social Security and Medicare benefits because he failed to disclose that he had also earned compensation for several jobs, while simultaneously collecting government benefits. (This effectively disqualifies him from the benefits programs.)

The story states that for more than five years, the 35-year-old man received disability compensation due to psychological disorders. The man’s wife, who acted as his payment representative, collected more than $130,000 in Social Security benefits as well as nearly $92,000 from Medicare during this time.

Apparently, after about a year-and-a-half of collecting government benefits, the man failed to disclose that he had a $5,000 a month job as a farm hand, while also collecting compensation for various construction jobs. He also neglected to mention that he was employed as the chief of a small town volunteer fire fighting squad. (He was quite a busy bee.)

The former fire chief was sentenced to 42 months in jail for hiding income while collecting federal disability and health benefits. He asked the judge for leniency for his wife, who he claimed was not really involved. (I’ll just cash the checks, but won’t spend the money.) The judge placed the wife on indefinite home detention. The judge also put the couple on a payment plan to pay back the benefits. (According to the article, it will take the couple approximately 90 years to pay back the funds. Did I mention that they also owe some back taxes to the Internal Revenue Service?)

This case is complex considering the fraudster had already been sentenced to six years in prison and was serving time for statutory burglary, abduction, sexual battery, perjury and possession of firearms as a felon. (What a list!) The wife still has to answer to a charge of perjury for claiming that her husband did not possess any guns. One thing is for sure, this fraudster will no longer be allowed to collect government benefits. Unfortunately, the taxpayers still have to pick up the tab while he is incarcerated.

Source: Today’s ”Fraud of the Day” is based on an article titled, ”Former Buchanan Fire Chief Billy Joe Carter Sees More Jail Time,” written by Jeff Sturgeon and published in The Roanoke Times on April 28, 2014.

ROANOKE – Buchanan’s former volunteer fire chief, imprisoned in January for a violent incident in 2012, received more prison time Monday for defrauding Medicare and Social Security for more than five years.

U.S. District Court Judge Glen Conrad sentenced Billy Joe Carter to 42 months on a single conspiracy charge for government theft for collecting federal disability and health benefits while hiding income.

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Larry Benson
Larry Benson is currently the Director of Strategic Alliances for Revenue Discovery and Recovery at LexisNexis Risk Solutions. In this role, Benson is responsible for developing partnerships for the tax and revenue and child support enforcement verticals. He focuses on embedded companies that have a need for third-party analytics to enhance their current offerings.