Vermont Woman Charged with Supplemental Security Income Fraud

Date: 
Thursday, November 8, 2018
Office Affiliation: 

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

The United States Attorney for the District of Vermont announced that Debra Bluto, 64, of St. Albans Bay, pleaded not guilty today in United States District Court in Burlington to charges that she defrauded the Social Security Administration.  U.S. Magistrate Judge John M. Conroy released Bluto on conditions pending trial, which has not been scheduled.

On October 24, a federal grand jury in Rutland returned a four-count indictment charging Bluto with stealing government funds and making false statements to the Social Security Administration.  According to the indictment, Bluto’s grandson began receiving Supplemental Security Income benefits from the government in 2001.  SSI is a special needs-based benefit program designed to provide financial assistance to aged, blind and disabled persons who have little or no income.  The benefits for Bluto’s grandson were paid directly to Debra Bluto as her grandson’s representative payee.

For most of the period between May 2008 and January 2017, Bluto’s grandson was incarcerated following his convictions for serious crimes.  By law, Bluto’s grandson was not entitled to receive SSI benefits during any period of incarceration.  Nonetheless, Bluto continued to receive her grandson’s SSI benefits for the entire time he was in jail.  According to the indictment, in annual reports she had to file with the Social Security Administration, Debra Bluto concealed the fact that her grandson was in prison and falsely claimed that she used all the SSI funds to pay for his care.  In fact, the indictment charges, Debra Bluto converted those illegitimate payments – which totaled approximately $50,000 - to her own benefit.

The United States Attorney emphasizes that the charges in the indictment are merely accusations and that the defendant is presumed innocent unless and until she is proven guilty.

If convicted, Bluto faces up to ten years of imprisonment and a fine of up to $250,000.  The actual sentence would be determined with reference to federal sentencing guidelines.

This case was investigated by the Office of the Inspector General of the Social Security Administration.

Bluto is represented by Federal Public Defender Michael Desautels.   The prosecutor is Assistant U.S. Attorney Gregory Waples.