NJ Family Indicted Following ”Operation Labor Day” Unemployment Fraud Investigation


Sometimes fraudsters cook up elaborate schemes to defraud the government. In other cases, like the one in today’s fraud from News-JournalOnline.com, the approach is pretty simple? the fraudster just didn’t tell the government that she was no longer eligible to receive benefits and that’s when the fraud began.

According to the article, a Florida woman ”was awarded disability benefits in 1995 but began working as a bookkeeper in January 2003.’? (Great news? The system worked. She got the help she needed when she needed it and no longer needs help from the American taxpayer. This is her cue to contact the Social Security Administration and let them know.? If she had reported the work, ”her benefits would have ended in February 2004.’? (But what was she thinking? She wasn’t, clearly.? Instead, she continued to collect benefits until April 2011, resulting in an overpayment of $143,805.

A jury recently found her guilty of Social Security disability fraud. Now, she faces up to eight years in prison. And she has to pay back the fraudulent benefits she received. (Yes!)

Will she wind up doing prison time? (Have I mentioned my opinion on these matters?? That’s in the hands of the judicial system. Here, it is critical to note that as a one-time, legitimate beneficiary of the disability program, she knew what it meant to be in need – and she knew what it meant to steal those funds from those still in need.


Source: Today’s ”Fraud of the Day” is based on an article entitled, ”Flagler Beach Woman Found Guilty of Social Security Fraud,” written by Chris Graham and published by News-JournalOnline.com on March 9, 2012.

A federal jury Thursday found a Flagler Beach woman guilty of Social Security fraud, according to the U.S. Attorney’s Office.

Deborah Townsend, 46, faces a maximum of 10 years in federal prison after authorities say she received illegal disability benefits for more than eight years. She also is under an order to forfeit the proceeds of the fraud, authorities said.

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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.