First Sentences Handed Down in Puerto Rico Disability Fraud Scheme

Beyond the Numbers

Date: 
Wednesday, March 26, 2014
Posted by: 
The Office of External Relations

Our investigation of a disability fraud scheme in Puerto Rico led to the arrests of 75 people last August—but that was just the beginning of the judicial process for those charged with being involved.

Back in November, we told you about the first subject of the investigation to face trial. David Rodriguez Colon pled guilty to falsely claiming to have a medical condition that limited his ability to work. He hasn’t been sentenced yet, but others connected to the scheme pled guilty in U.S. District Court in Puerto Rico in November and December and were recently the first involved in the scheme to be sentenced:    

  • Carmen M. Torres Hernandez pled guilty to aiding and abetting theft of government property. On January 29, she was sentenced to 2 years’ probation and was ordered to repay $16,431 to SSA.
  • Nancy Melendez Crespo pled guilty to theft of government property. On January 31, she was sentenced to 4 years’ probation and was ordered to repay $13,344 to SSA.
  • Gerardo Torres Lopez pled guilty to theft of government property. On February 28, he was sentenced to 2 years’ probation and ordered to repay $18,008 to SSA.
  • Manuel Tirado Maldonado pled guilty to concealment or failure to disclose information to Social Security.  On March 5, he was sentenced to 2 years’ probation and ordered to repay $65,676 to SSA.

The August arrest operation in Puerto Rico was the result of a lengthy and complex investigation into widespread disability fraud among doctors, a non-attorney claimant representative, and many beneficiaries. The investigation found evidence that the non-attorney representative, a former SSA employee, conspired with the doctors to create fraudulent medical records for numerous individuals who applied for Social Security disability benefits.

Of the 75 individuals charged in this case, 34 have entered guilty pleas, and three defendants are awaiting trials scheduled to begin in April. We’ll report on future sentencing information as it becomes available.

This joint investigation with the FBI and the Puerto Rico Police Department continues. To date, the San Juan Cooperative Disability Investigations Unit has received more than 300 calls to a special hotline number—(855) 777-0821—set up specifically for individuals to report disability fraud allegations in Puerto Rico. We are thoroughly evaluating the information from these calls for further investigation.