Alabama State Inmate, Alabama Woman Charged in Social Security Fraud Scheme

Date: 
Friday, February 24, 2017
Office Affiliation: 

From the U.S. Attorney's Office, Northern District of Alabama:

BIRMINGHAM – An Alabama state inmate and a northeast Alabama woman face federal charges for a scheme to defraud the Social Security Administration by working together to collect disability benefits that the inmate was not entitled to while in prison, announced Acting U.S. Attorney Robert O. Posey and Social Security Administration, Office of Inspector General, Special Agent in Charge Margaret Moore-Jackson, Atlanta Field Division.

A federal grand jury today indicted RICHARD EARL STANLEY, 56, of Boaz, on six wire fraud counts and one count of theft of government property for scheming with others to illegally receive $42,870 in Social Security Type II Disability Insurance Benefits payments between January 2013 and September 2015.

The U.S. Attorney’s Office on Feb. 17 filed an information against KRISTIN BLAIR FOX, 34, of Southside, charging her with four counts of wire fraud and one count of theft of government property for helping Stanley collect the disability payments that she knew neither of them was entitled to receive. In conjunction with the charges, the U.S. Attorney’s Office also filed a plea agreement with Fox.

The wire fraud counts for both defendants are based on ATM cash withdrawals from Stanley’s Comerica Bank account, where the SSA deposited Stanley’s disability benefits, according to the court documents.

Stanley was awarded the Social Security disability benefits in 2002. In June 2007, he was convicted of a felony and incarcerated, according to his indictment. The SSA notified him in September 2007 that he could no longer receive the benefits because he was confined in an institution in connection with a criminal case and that his stay was “being paid for with public funds.”

Stanley was incarcerated again in March 2012, but in July 2012 provided documentation to SSA that he was released from custody in June of that year, so his benefits could be reinstated, according to his indictment. When he was convicted of a felony later in 2012, Stanley did not notify the SSA that he had been re-incarcerated, because he knew he would not be entitled to receive benefits while in custody, the indictment states.

In January 2013, according to his indictment, a fellow inmate referred Stanley to Fox, as someone who might help Stanley access his disability benefits and have money transferred to his prison commissary account.

According to Stanley’s indictment and Fox’s information and plea agreement, their scheme to illegally obtain the disability payments took place as follows:

Stanley contacted Fox by letter in February 2013 and offered to pay her to help him access is disability payments. He arranged for Fox to collect his personal property at the prison, which included his Comerica Bank debit card. Their initial agreement was for Fox to take $175 each month from the SSA funds and deposit $300 monthly into Stanley’s prison commissary account.

In the ensuing months, Fox requested money and complained when Fox failed to send it. Fox continued to withdrew money from the Comerica account for herself, without Stanley’s knowledge.

Stanley’s debit card was to expire in December 2014 and Stanley gave Fox directions on how to renew it through Social Security, but Fox did not attempt to do so. The SSA terminated Stanley’s benefits in September 2015.

The SSA-OIG investigated the case, which Assistant U.S. Attorney Tamarra Matthews Johnson is prosecuting.

An indictment contains only charges. A defendant is presumed innocent unless and until proven guilty.