Wisconsin Business Owner Sentenced to Year in Prison for Social Security Disability Fraud

Date: 
Tuesday, January 21, 2014
Office Affiliation: 

News article from the Milwaukee-Wisconsin Journal Sentinel:

A Greendale man was sentenced to a year in federal prison Tuesday for fraudulently collecting $175,000 in Social Security benefits and lying on his taxes, after he claimed he was blind and couldn't work, drive or read without help.

In reality, Lawrence Popp could do all those things, according to federal agents who secretly recorded him.

The 58-year-old man ran businesses while collecting government benefits and spent lavishly on trips and jewelry, records show. He could read small print on his phone and drive a car, a snowmobile and even a water-ski boat, according to surveillance video recorded and obtained by agents working for the Social Security Administration and the IRS.

"The lies are just one after another," Assistant U.S. Attorney Gordon Giampietro, who recommended two years in prison, said in court. "This is a cynical abuse of a program truly geared to those who need assistance."

Popp's attorney, Raymond Dall'Osto, recommended probation, citing Popp's continuing health problems. Dall'Osto said his client is guilty but noted the money he stole and the taxes he failed to pay would be repaid quickly.

Agents seized gold, silver and jewelry when they raided Popp's house, and they will cover the roughly $225,000 in restitution.

"Mr. Giampietro calls it a cynical abuse. I think it is more like getting caught with his hand in the cookie jar," said Dall'Osto, who assured U.S. District Judge Rudolph Randa that if Popp applies for Social Security benefits again, "this will not happen again."

Wearing tinted glasses, Popp walked into court unassisted. At times, his hands shook visibly. His attorney said his vision has improved but also has deteriorated at times. Popp himself apologized for the fraud.

Giampietro said that Social Security disability depends on recipients to be honest and self-report if anything changes in their health. Popp failed to do that, repeatedly, records show.

Popp was declared legally blind in 2004 after an illness, and he and his family began receiving government benefits. However, he continued working, running his companies, Refrigerated Equipment Distributors Co. and a "sister" business, Commercial Sales Agency.

According to the indictment, Popp illicitly collected $175,000 in disability payments as well as $115,000 in Medicare benefits between 2004 and 2009. In addition, he reportedly evaded taxes totaling about $178,000.

He spent lavishly, buying items such as a $25,000 diamond and emerald necklace for his now-former wife, records show.

Kimberly Popp told investigators the couple vacationed regularly in the Cayman Islands and that Lawrence Popp had opened a bank account there. That is where he bought her the diamond necklace, she said. The couple divorced in 2007.

In 2008, Popp was directed to appear for a benefits review at a Social Security Administration office in the Milwaukee area. In the interview, he repeatedly said he could not drive, adding it was "the only thing I wish I could do."

"This from a man who had just driven to the office, parked two blocks away and walked to the office," Giampietro said.

Popp told the benefits counselor he could not read small print, couldn't bowl without bumpers used by children and couldn't work.

"I loved to work. I thought there was never anything that would stop me from working," Popp said on the video. "My lifestyle has just changed radically."

After the meeting with the benefits reviewer, Popp is seen on video walking from the office to his car, looking at a cellphone and then making a call. He got in his car and drove to a hardware store. And then agents record him driving back to his house — via the freeway.

Records show that shortly after the meeting, Popp renewed his license with only an eyeglass restriction. And then he received a speeding ticket in Waushara County.

Popp pleaded guilty to the federal charges last March. As he awaited sentencing, agents continued to investigate, recording him loading a truck and driving a water-ski boat over the summer.