Another Lottery Winner Charged with Welfare Fraud

39203350 - filing taxes online using a computer and being audited

Public assistance programs exist to help members of the public who need assistance. It’s really that simple. I’m going to go out on a limb and say that if someone wins the lottery, the chances are excellent that they don’t need additional assistance. (They get assistance. They won the lottery!) Last month, I wrote about two separate cases of lottery winners who continued to accept welfare benefits after they struck it rich. The first case involved a woman who continued to receive food stamps; the second case, also involving a food stamp recipient, helped fuel legislation prohibiting lottery winners from receiving food stamps. Today’s fraud, from in New York, once again raises the issue of a lottery winner potentially committing welfare fraud.

The article reports that ”a man who won a ‘Win for Life’ scratch-off ticket in 1998 is now charged with welfare fraud.” He has been receiving $1,000 per week since then and authorities estimate that he has received almost $750,000. Obviously, winning the lottery isn’t a crime. (I’m buying my ticket now.) The problem is that authorities allege that the man applied for Home Energy Assistance Program (HEAP) and Medicaid benefits in September of 2011 and has collected $4,000 under these programs. They also say he ”was applying for Emergency Cash Assistance when a fraud investigator received a tip that [he] was a lottery winner.”

It is critical to point out that this man has only been charged with a crime and is innocent until proven guilty. That said the case raises a couple of interesting questions: how would federal and state benefits programs know if a lottery winner was receiving benefits? By examining the data in their own programs? (Cold) That’s a start, but it provides a pretty narrow view of the beneficiary. By examining data in public records across jurisdictional boundaries? (Getting Warmer). Looking at all that data is great, but agencies need to be able to put it in context. By using public records and data analytics technology to get a holistic view of the benefit recipient? (You’re red hot.) Yes. Let’s close the loopholes that fraudsters are exploiting by leveraging public records and data analytics technology to identify indicators for fraud.

Source: Today’s ”Fraud of the Day” is based on an article entitled, ”Local Lottery Winner Charged with Welfare Fraud,” published by on April 13, 2012.

Albion, N.Y. — A man who won a “Win for Life” scratch-off ticket in 1998 is now charged with Welfare Fraud.

Anthony Palermo, 51, has been receiving $1,000 a week and is guaranteed a minimum prize of $1,000,000. The Orleans County Sheriff’s Office estimates Palermo has collected nearly $750,000 to date.

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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.