Protecting the Public Purse

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You might be surprised what people will do to keep collecting a monthly check from the federal government. One common way that people steal benefits they don’t deserve is by failing to report the death of a loved one to the Social Security Administration (SSA). (A San Diego, California man did just that for more than 16 years.) The Californian committed Social Security fraud by collecting nearly $272,000 on behalf of his deceased father. (That’s about $17,000 per year.)

When the SSA is not notified of a beneficiary’s death by a family member, funeral home or state agency, those monthly benefit checks can continue to be erroneously deposited for quite some time. Today’s fraudster concealed his father’s death and continued to have the monthly benefit checks deposited into a bank account that was set up in his deceased parents’ names. (Then, the greedy son repeatedly wrote checks payable to himself and forged his dad’s name in the signature line.)

 While the SSA does pay retirement benefits to eligible retired workers 62 or older, and to their eligible dependents, the son did not qualify to receive them. (A widow or minor child of a deceased retiree – who paid into the system – can receive posthumous benefits.) The son was around the age of 40 when he started fraudulently collecting his dad’s checks. (Obviously, he was not a minor and was definitely old enough to know better.)

 The 55-year-old man admitted to illegally using more than a quarter of a million dollars of public money to spend as he wished when he pleaded guilty to Social Security fraud. (The press release states that this man’s crime is the single largest Social Security theft in the Southern District of California to date.) He was sentenced to one year and one day in federal prison for absconding with $271,925.60 in Social Security retirement benefits that were intended for his father. (He is also required to pay full restitution.)

The National Academy of Social Insurance reports that as of June 2017, nearly 45 million retired workers and their families receive retirement benefits from the SSA. (The average payment for a retired worker is $1,369.) The viability of the Social Security Trust Fund, which pays retirement benefits, is of great concern to those taxpayers who have paid into the system. (When deceptive individuals such as our fraudster today steal from the trust fund, their actions reduce the amount of funds available for future retirees and beneficiaries. That’s you and me.)

Congratulations to the SSA’s Office of the Inspector General for sending a strong message to anyone thinking about stealing Social Security benefits they don’t deserve. This case is also a wake-up call for American citizens to make sure that they are responsible for their own retirement savings. (If fraudsters continue to steal what is not theirs, there will not be anything left for you either.)

Today’s “Fraud of the Day” is based on an Office of the Inspector General of the Social Security Administration press release entitled, California Man Sentenced to 12 Months in Prison for $270,000 Deceased Payee Fraud,” released on November 6, 2017.

SAN DIEGO –Abel Jose Perez of San Diego was sentenced today to 12 months and one day in federal prison for stealing $271,925.60 in Social Security retirement benefits intended for his father, who had died in 1997.  As Perez admitted when pleading guilty, instead of informing the Social Security Administration of his father’s death, Perez continued to take benefits that had been deposited into a bank account in his deceased parents’ names.  Soon after each month’s deposit from the Social Security Administration, Perez would forge his father’s signature on a bank check made payable to himself, and divert the funds for his own personal use.

The Social Security Administration pays retirement benefits to eligible retired workers, aged 62 or better, and to their eligible dependents.  Although the widow or the minor child of a deceased retiree can receive posthumous benefits, Perez, 55, admitted that in this case he knew he was not entitled to receive any of the money paid out by Social Security after his father’s death.  When entering his guilty plea on May 17, 2017, Perez admitted that for over 16 years he retained exclusive access to and controlled a bank account belonging to his deceased parents, enabling him to illegally convert over a quarter-million dollars of public money to his own use.

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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.