New York Man Charged in $300,000 Social Security Disability Fraud Scheme

From the U.S. Attorney’s Office, Southern District of New York:

Preet Bharara, the United States Attorney for the Southern District of New York, and Edward J. Ryan, the Special Agent in Charge of the United States Social Security Administration, Office of the Inspector General, announced that JAMES CARSON, a former New York City Police Department (“NYPD”) officer, was arrested today for a scheme to fraudulently obtain disability benefits from the Social Security Administration (“SSA”). CARSON allegedly claimed to the SSA that he was unemployed since 1990 and could not work due to disability. However, since at least 2004, at the same time he was collecting disability benefits, he was working full time as the Director of Security for an international watchmaker and luxury watch retailer headquartered in New York, New York (the “Company”). CARSON was arrested earlier this morning at his residence in Yorktown, New York, and will be presented later today in Manhattan federal court before U.S. Magistrate Judge Andrew J. Peck.

Manhattan U.S. Attorney Preet Bharara said: “Not only did James Carson allegedly tell a series of lies to pocket disability benefits to which he was not entitled, but he then took sophisticated steps to conceal his fraudulently obtained income from the Social Security Administration. I would like to thank the Social Security Administration, Office of the Inspector General, for their work in bringing Carson’s alleged scheme to its proper end.”

Special Agent in Charge Edward J. Ryan said: “The investigation outlined in this criminal complaint demonstrates just one of the many actions our office is taking on a daily basis to ensure that the Social Security Disability Insurance Trust Fund is preserved for its intended purpose, providing a safety-net for the truly disabled, not lining the pockets of scammers and thieves. As always, it is particularly troubling when these types of crimes are committed by individuals who were once entrusted with upholding the law, and who are already receiving generous tax-payer financed pensions. Our office greatly appreciates the continued support and the priority given to these cases by the United States Attorney’s Office for the Southern District of New York.”

According to the allegations contained in the Complaint unsealed today:

In approximately 1990, CARSON left his job as a police officer with the NYPD due to a back injury and began receiving Social Security Disability Insurance (“SSD”). This disability benefit is only available to individuals who have a qualifying disability and are unable to work in any profession.

On multiple forms submitted to the SSA, CARSON claimed that he could not work due to a herniated disc and that he had not earned any income since 1990, when he began receiving SSD benefits. For example, in April 2014, CARSON reported to an SSA office for an interview related to his continued receipt of SSD benefits and filled out forms stating, among other things, that he: had not worked since leaving the NYPD in 1990; had “no other income” during that time; and had done “no work at all since my disability began.” CARSON further claimed that his typical day consisted of the following: “[I g]et out of bed. I have breakfast, I walk around backyard [and] deck. Wait for wife to come home from work. I lay down a lot. I rely on my wife to go places – she drives mostly.” In another form also submitted to the SSA that day, CARSON stated that “[m]y wife has to do the driving,” and that he could not drive due to “severe pain [and] weakness.” In response to a question asking about places he goes on a regular basis, CARSON claimed, “I don’t really go anywhere on a regular basis.” When CARSON attended the SSA interview in April 2014, he was limping and walking with a cane, and claimed in written forms that he always uses a cane.

In fact, since at least 2004, CARSON allegedly has been working full time as the Director of Security at the Company – an international watchmaker and luxury watch retailer. CARSON has been observed on multiple occasions driving to and from work, walking up stairs without difficulty, and walking without a cane. Further, EZ Pass records show that CARSON frequently travels back and forth between his residence and his office, typically at around 8:00 a.m. and 5:00 p.m. In 2010, CARSON received the Loss Prevention Case of the Year Award from the National Retail Federation for his role in an investigation into credit card schemes targeting the Company.

In order to prevent the SSA from discovering that he was gainfully employed while claiming to be unemployed due to a disability, CARSON took steps to conceal the income he was receiving from the Company. Rather than get paid directly by the Company, CARSON arranged for his compensation to be paid first to a corporation associated with his relative, and then paid from that corporation to CARSON’s relative as purported wages. Since 2004, CARSON has collected approximately $306,431 in disability benefits.

* * *

CARSON, 50, of Yorktown, New York, is charged with one count of theft of government property, which carries a maximum sentence of 10 years in prison, one count of making false statements, which carries a maximum sentence of five years in prison, and one count of failing to report income, which carries a maximum sentence of five years in prison. The maximum potential sentences are prescribed by Congress and are provided here for informational purposes only, as any sentencing of the defendant will be determined by the judge.

Mr. Bharara praised the outstanding investigative work of the United States Social Security Administration, Office of the Inspector General.

The prosecution of this case is being handled by the Office’s Complex Frauds and Cybercrime Unit. Special Assistant United States Attorney Daniel Tracer is in charge of the prosecution.

The charges contained in the Complaint are merely accusations. The defendant is presumed innocent unless and until proven guilty.

Preet Bharara, the United States Attorney for the Southern District of New York, and Edward J. Ryan, the Special Agent in Charge of the United States Social Security Administration, Office of the Inspector General, announced that JAMES CARSON, a former New York City Police Department (“NYPD”) officer, was arrested today for a scheme to fraudulently obtain disability benefits from the Social Security Administration (“SSA”). CARSON allegedly claimed to the SSA that he was unemployed since 1990 and could not work due to disability. However, since at least 2004, at the same time he was collecting disability benefits, he was working full time as the Director of Security for an international watchmaker and luxury watch retailer headquartered in New York, New York (the “Company”). CARSON was arrested earlier this morning at his residence in Yorktown, New York, and will be presented later today in Manhattan federal court before U.S. Magistrate Judge Andrew J. Peck.

Manhattan U.S. Attorney Preet Bharara said: “Not only did James Carson allegedly tell a series of lies to pocket disability benefits to which he was not entitled, but he then took sophisticated steps to conceal his fraudulently obtained income from the Social Security Administration. I would like to thank the Social Security Administration, Office of the Inspector General, for their work in bringing Carson’s alleged scheme to its proper end.”

Special Agent in Charge Edward J. Ryan said: “The investigation outlined in this criminal complaint demonstrates just one of the many actions our office is taking on a daily basis to ensure that the Social Security Disability Insurance Trust Fund is preserved for its intended purpose, providing a safety-net for the truly disabled, not lining the pockets of scammers and thieves. As always, it is particularly troubling when these types of crimes are committed by individuals who were once entrusted with upholding the law, and who are already receiving generous tax-payer financed pensions. Our office greatly appreciates the continued support and the priority given to these cases by the United States Attorney’s Office for the Southern District of New York.”

According to the allegations contained in the Complaint unsealed today:

In approximately 1990, CARSON left his job as a police officer with the NYPD due to a back injury and began receiving Social Security Disability Insurance (“SSD”). This disability benefit is only available to individuals who have a qualifying disability and are unable to work in any profession.

On multiple forms submitted to the SSA, CARSON claimed that he could not work due to a herniated disc and that he had not earned any income since 1990, when he began receiving SSD benefits. For example, in April 2014, CARSON reported to an SSA office for an interview related to his continued receipt of SSD benefits and filled out forms stating, among other things, that he: had not worked since leaving the NYPD in 1990; had “no other income” during that time; and had done “no work at all since my disability began.” CARSON further claimed that his typical day consisted of the following: “[I g]et out of bed. I have breakfast, I walk around backyard [and] deck. Wait for wife to come home from work. I lay down a lot. I rely on my wife to go places – she drives mostly.” In another form also submitted to the SSA that day, CARSON stated that “[m]y wife has to do the driving,” and that he could not drive due to “severe pain [and] weakness.” In response to a question asking about places he goes on a regular basis, CARSON claimed, “I don’t really go anywhere on a regular basis.” When CARSON attended the SSA interview in April 2014, he was limping and walking with a cane, and claimed in written forms that he always uses a cane.

In fact, since at least 2004, CARSON allegedly has been working full time as the Director of Security at the Company – an international watchmaker and luxury watch retailer. CARSON has been observed on multiple occasions driving to and from work, walking up stairs without difficulty, and walking without a cane. Further, EZ Pass records show that CARSON frequently travels back and forth between his residence and his office, typically at around 8:00 a.m. and 5:00 p.m. In 2010, CARSON received the Loss Prevention Case of the Year Award from the National Retail Federation for his role in an investigation into credit card schemes targeting the Company.

In order to prevent the SSA from discovering that he was gainfully employed while claiming to be unemployed due to a disability, CARSON took steps to conceal the income he was receiving from the Company. Rather than get paid directly by the Company, CARSON arranged for his compensation to be paid first to a corporation associated with his relative, and then paid from that corporation to CARSON’s relative as purported wages. Since 2004, CARSON has collected approximately $306,431 in disability benefits.

* * *

CARSON, 50, of Yorktown, New York, is charged with one count of theft of government property, which carries a maximum sentence of 10 years in prison, one count of making false statements, which carries a maximum sentence of five years in prison, and one count of failing to report income, which carries a maximum sentence of five years in prison. The maximum potential sentences are prescribed by Congress and are provided here for informational purposes only, as any sentencing of the defendant will be determined by the judge.

Mr. Bharara praised the outstanding investigative work of the United States Social Security Administration, Office of the Inspector General.

The prosecution of this case is being handled by the Office’s Complex Frauds and Cybercrime Unit. Special Assistant United States Attorney Daniel Tracer is in charge of the prosecution.

The charges contained in the Complaint are merely accusations. The defendant is presumed innocent unless and until proven guilty.