Two Massachusetts Men Charged in Social Security Fraud Case

Wednesday, March 13, 2013
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Two Athol men are expected to be arraigned today in Suffolk Superior Court on charges of benefits fraud and larceny.

Paul Mahan, 42, and Kelly Walsh, 42, both of Athol, were indicted by a Suffolk Superior Court grand jury in February for allegedly accepting overpayments for workers’ compensation, disability and retirement benefits. Mr. Mahan is charged with workers’ compensation fraud and larceny by false pretenses. Mr. Walsh is charged with larceny by false pretenses.

Attorney General Martha Coakley’s office said that between January 2007 and January this year, Mr. Mahan and Mr. Walsh ran car dealerships in Winchendon and Orange and worked together on another venture while collecting benefits from previous work-related injuries. During that time they failed to disclose their work status to appropriate agencies.

Mr. Mahan began working for the Suffolk County Sheriff’s Department in May 2000. Within three months he suffered a knee injury while on the job and began receiving benefits from the Suffolk County Sheriff’s Department, which was independently insured at the time. In May 2006 a judge determined he was permanently and totally disabled. As a result, he was able to collect three separate checks each month from the injury he suffered in his three months of employment: workers’ compensation benefits, assault pay and retirement benefits. Court documents did not specify the reason for the assault pay. The benefits totaled 100 percent of his salary.

In June 2006, the Sheriff’s Department began surveillance of Mr. Mahan. Authorities allege that on various occasions between 2006 and 2011, he and Mr. Walsh were working regularly at Shamrock Motors in Winchendon, a business registered in the names of their wives.

At the time, Mr. Walsh was collecting disability compensation through federally administered Title II benefits for a back injury he suffered in 2004. Investigators found $385,000 worth of checks made payable to the two men and their wives. The men also were paid $38,000 at another auto dealership when they left a partnership there.

While working, Mr. Mahan was allegedly overpaid $203,000 in workers’ compensation benefits, $125,000 in assault benefits and more than $49,000 in retirement benefits. Mr. Walsh allegedly received $46,000 in overpayments in Social Security disability benefits.