Connecticut Man Sentenced for Social Security Disability Fraud, Tax Fraud

From the U.S. Attorney’s Office, District of Connecticut:

Deirdre M. Daly, United States Attorney for the District of Connecticut, announced that JOSEPH LUCA, 68, of Meriden, was sentenced today by U.S. District Judge Michael P. Shea in Hartford to four years of probation, the first six months of which LUCA must spend in home confinement with electronic monitoring, for stealing Social Security benefits and filing false tax returns. LUCA also was ordered to perform 80 hours of community service.

According to court documents and statements made in court, in April 1993, LUCA applied for Social Security Disability Insurance (“SSDI”) claiming that he was disabled and unable to work. From January 2002 through April 2011, LUCA regularly reported to the Social Security Administration, under the penalty of perjury, that he remained unable to work and he reported no earned income. In fact, during this time, LUCA earned more than $1,000 per month from his work as a hairdresser at a beauty salon he owned and operated. LUCA was not entitled to SSDI payments during this entire period because his earnings exceeded the SSA monthly substantial gainful activity limit.

An undercover investigation revealed that LUCA typically opened his beauty salon in the morning from Tuesday to Saturday each week, cut and styled his clients’ hair throughout the day in exchange for payment, and then locked up the salon at night. Throughout the day, he stood while he worked without the assistance of a cane or similar device, and also carried and lifted items using his body and arms. During the investigation, LUCA told an undercover agent who was posing as a client that he had been styling hair for 45 years.

Based on LUCA’s false representations that he was disabled, unable to work, and reported no income, the Social Security Administration paid him, as well as his children as auxiliary beneficiaries, a total of $122,332 that he and his children were not entitled to receive.

In May 2011, the Social Security Administration terminated LUCA’s SSDI benefit payments.

LUCA also willfully signed and filed federal tax returns for the 2006 through 2009 tax years that failed to report a total of more $675,000 in additional taxable income. On each of these four tax returns, LUCA reported a loss and no tax due. The investigation determined that LUCA did not report his receipt of income from various sources, including rental real estate, work as a private investigator, interest on bank accounts, SSDI payments he was not entitled to receive, and capital gains on rental properties.

On his 2006 federal tax return alone, LUCA failed to report approximately $299,674 in additional income, with a tax due in the amount of $36,687.

Judge Shea ordered LUCA to pay $122,332 in restitution to the Social Security Administration, and $64,093 in back taxes, plus penalties and interest.

On July 11, 2014, LUCA waived his right to indictment and pleaded guilty to one count of stealing government money and one count of filing a false federal tax return.

This matter was investigated by the Internal Revenue Service – Criminal Investigation Division, and the Social Security Administration, Office of Inspector General – Office of Investigations. The case was prosecuted by Assistant U.S. Attorney Peter S. Jongbloed.

Deirdre M. Daly, United States Attorney for the District of Connecticut, announced that JOSEPH LUCA, 68, of Meriden, was sentenced today by U.S. District Judge Michael P. Shea in Hartford to four years of probation, the first six months of which LUCA must spend in home confinement with electronic monitoring, for stealing Social Security benefits and filing false tax returns. LUCA also was ordered to perform 80 hours of community service.

According to court documents and statements made in court, in April 1993, LUCA applied for Social Security Disability Insurance (“SSDI”) claiming that he was disabled and unable to work. From January 2002 through April 2011, LUCA regularly reported to the Social Security Administration, under the penalty of perjury, that he remained unable to work and he reported no earned income. In fact, during this time, LUCA earned more than $1,000 per month from his work as a hairdresser at a beauty salon he owned and operated. LUCA was not entitled to SSDI payments during this entire period because his earnings exceeded the SSA monthly substantial gainful activity limit.

An undercover investigation revealed that LUCA typically opened his beauty salon in the morning from Tuesday to Saturday each week, cut and styled his clients’ hair throughout the day in exchange for payment, and then locked up the salon at night. Throughout the day, he stood while he worked without the assistance of a cane or similar device, and also carried and lifted items using his body and arms. During the investigation, LUCA told an undercover agent who was posing as a client that he had been styling hair for 45 years.

Based on LUCA’s false representations that he was disabled, unable to work, and reported no income, the Social Security Administration paid him, as well as his children as auxiliary beneficiaries, a total of $122,332 that he and his children were not entitled to receive.

In May 2011, the Social Security Administration terminated LUCA’s SSDI benefit payments.

LUCA also willfully signed and filed federal tax returns for the 2006 through 2009 tax years that failed to report a total of more $675,000 in additional taxable income. On each of these four tax returns, LUCA reported a loss and no tax due. The investigation determined that LUCA did not report his receipt of income from various sources, including rental real estate, work as a private investigator, interest on bank accounts, SSDI payments he was not entitled to receive, and capital gains on rental properties.

On his 2006 federal tax return alone, LUCA failed to report approximately $299,674 in additional income, with a tax due in the amount of $36,687.

Judge Shea ordered LUCA to pay $122,332 in restitution to the Social Security Administration, and $64,093 in back taxes, plus penalties and interest.

On July 11, 2014, LUCA waived his right to indictment and pleaded guilty to one count of stealing government money and one count of filing a false federal tax return.

This matter was investigated by the Internal Revenue Service – Criminal Investigation Division, and the Social Security Administration, Office of Inspector General – Office of Investigations. The case was prosecuted by Assistant U.S. Attorney Peter S. Jongbloed.