Putting the Brakes on Fraud

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Once a train starts rolling, momentum makes it hard to stop. Similarly, once a fraudster becomes successful at skimming undeserved benefits, it’s also hard to put on the brakes. (The desire for more begets the need to continue a ruse to obtain more.) An article posted on 13WMAZ.com tells the story of an experienced brakeman for a Georgia-based railroad company who failed to put a stop to his fraudulent scheme involving the illegal collection of undeserved disability benefits.

The story reveals that the brakeman served the railroad company for 22 years. Eight months after ceasing work, he filed for disability benefits stating on his application that he had no self-employment income to report. His application was accepted and he continued to receive disability income for 11 years.

It is important to note that the retired railroad worker was advised of his responsibility to report any earnings and employment to the Railroad Retirement Board (RRB). He was also aware that it was against the law to make a false statement to receive disability benefits. Regardless of those warnings, the story states that he had started a business providing lawn maintenance, landscape design and irrigation services about six years prior to filing for disability benefits. (So when he filled out the disability application, he obviously failed to note that he had a business or any income from that business. And to further complicate matters for him, the man filed a continuing disability report with the RRB again, falsely claiming he had no self-employment for nearly 10 years.)

In the meantime, investigators discovered that the retired railroad worker had been active as owner, officer and agent of his business for 16 years. (At least that’s what his corporate website claimed. He also wrote checks on his business checking account and received income from the lawn business.)

The fraudster’s false claims caught up with him and he was sentenced to a year and a day in prison plus one year on supervised release. The 58-year-old was also ordered to pay about $273,000 in restitution to the RRB.

Sometimes, well-meaning people can get sidetracked and make bad choices. Because of the length of time over which this scam occurred, it can be assumed that this man knew exactly what he was doing and he somehow justified his illegal actions, which drained the RRB of funds that were intended to help other hardworking railroad workers make ends meet. (Somehow, this guy missed the cue to put the brakes on when it came to making the right turn vs. the wrong turn and now he has to pay for the train wreck he caused.)

Source: Today’s ”Fraud of the Day” is based on an article titled, ”Former Macon Railroad Worker Sentenced in Disability Fraud Case,” posted on 13WMAZ.com on September 18, 2015.

A Macon man who retired as a railroad worker was sentenced to a year and a day in prison in the U.S. District Court Wednesday for disability fraud.

According to a news release, 58-year-old David Hunnicutt was also ordered to pay a little over $273,000 in restitution to the Railroad Retirement Board and ordered to serve one year on supervised release following his prison term.

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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.