40 Additional Individuals Arrested in Puerto Rico Disability Fraud Conspiracy

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

On January 12 and 13, 2015 a Federal Grand Jury in the District of Puerto Rico returned 39 separate Indictments charging one doctor, Luis Escabi-Pérez, and 39 other individuals for fraud in the application process for Social Security Administration (SSA) disability insurance benefits in Puerto Rico, announced United States Attorney for the District of Puerto Rico, Rosa Emilia Rodríguez Vélez.

The SSA is responsible for the implementation of the Disability Insurance Benefits Program. The SSA provides monetary benefits to workers with severe, long-term disabilities, who have worked in SSA covered employment for a required length of time. Spouses and dependent children of disabled workers may also be eligible to receive benefits.

Pursuant to SSA regulations, a claimant must prove to SSA that he or she is disabled by furnishing medical and other evidence with the application. The application and supporting evidence would then be evaluated by SSA to determine the individual’s medical impairments and determine the effect of the impairment on the claimant’s ability to work on a sustained basis.

Defendant Luis Escabi-Pérez, psychiatrist, submitted Psychiatric Medical Reports to the SSA in support of applications for disability insurance benefits submitted by his patients. Escabi-Pérez charged a fee for the medical visits, typically in the amount of $100.00. In addition, the defendant typically charged a fee in the amount of $500.00, for the preparation and submittal of a Psychiatric Medical Report to the SSA. He would at times also charge additional fees of up to $5,000 to backdate medical records in order to create the appearance of a longer history of medical treatment.

For example, on January 15, 2014, Escabi-Pérez submitted a medical report to the SSA suggesting that a patient who was generally in good health, and was not suffering from any physical or mental disabling conditions, was in fact suffering from disabling psychiatric conditions, and that the first medical visit of this patient to him was in April, 2013, when in truth this patient’s first visit was in November of 2013.

The patient initially received $11,242 as a retroactive payment calculated from the date of entitlement through the approval date. Thereafter, the patient received monthly disability insurance benefit payments of approximately $1,536.00. The total amount of benefits paid to the patient from the date of entitlement through the date of this Indictment is approximately $27,096. Escabi-Pérez is also facing one charge of wire fraud. As part of the manner and means of the conspiracy, the doctor submitted via facsimile transmission the psychiatric report to the SSA supporting the existence of the alleged psychiatric conditions suffered by the patient in spite of the fact that these psychiatric conditions were contrived.

Five indictments charge five individuals along with doctor Escabi-Pérez of conspiracy to defraud the United States, wire fraud, theft of government property, concealment of failure to disclose an event to SSA and false statement in determining rights for disability. These defendants, aiding and abetting each other, knowingly and willfully embezzled, stole, and converted to their own use the Social Security Disability Insurance Benefit payments to which the defendants knew that they were not entitled.

Another five defendants filed SSA applications during the year 2011 indicated the defendants were unable to work due to “back problems, cervical conditions, pain, carpal tunnel, arms numbed, legs numbed, depression”, to mention a few. These defendants are charged with theft of government property because they embezzled, stole and converted to their own use or the use of others, Social Security Disability Insurance Benefit payments to which they knew they were not entitled. These defendants are also charged with false statement in determining rights for disability because they lied in the Disability Report (Form SSA-3368). The defendants stated that they stopped working because of their conditions, although the defendants knew that they stopped working because of a release agreement signed with pharmaceutical companies.

A third charge is for concealment or failure to disclose an event to SSA. These defendants intentionally concealed or failed to disclose the fact that their medical conditions had improved.

Twenty-nine defendants are facing two charges: theft of government property and concealment or failure to disclose an event to SSA.

The defendants who illegally received the benefits are: Wilma Bolet, Juana Concepción-Santana, Miriam Cosme-García, Yesenia De Jesús, Ramona García, María García-Reyes, Pedro Laureano-Vázquez, Juan López-Rivera, Elizabeth Maldonado-Laureano, Fernando Marrero-Padilla, Ernie Martell-Orta, Ángel Montes-Orria, Lourdes Reyes-Medina, Candi, Rojas-Molina, Ángel Román-Santana, Miguel Santana-Ríos, José Valle-Oliveras, Edna Vargas-Valdés, Agustín Vázquez-Izquierdo, Orlando Pérez-Juarbe, Jorge Fraguada-Romero, Elsie Boneta-Román, Julio César Álamo-Casiano, Manuel Rivera-Santos, Francisco Declet, Luis Reyes-Serrano, Ismael Alicea-Berdecía, Rosa Espinosa-González, Johany Díaz-Oquendo, Ángel Rivera-Adorno, Myrna Ruiz-Rosso, William Feliciano, Edwin Figueroa, Ana Morales-de Jesús, Rosa Pagán-Ramos, Alberto Sostre-Cintrón, Constancia Vega-García, Raúl Domínguez and Ana Ruiz-Rivera.

“This case is the result of the continued efforts of the SSA and the FBI. Since August 2013 when 75 individuals were indicted for similar charges, including the current charges, we have filed a total of 115 indictments,” said United States Attorney Rosa Emilia Rodríguez-Vélez. “This is a great example of ongoing efforts by the Government to deter fraud against the social security programs. The Department of Justice is committed to investigate and prosecute those who engage in fraudulent schemes. Hopefully this round of arrests will discourage more people from getting involved in these types of schemes, because the investigation continues”.

The Social Security Administration in New York and Baltimore conducted a lengthy analysis of medical source documentation in Social Security’s files, wherein a pattern of fraudulent activity was discovered, initiating a full investigation. What followed was lengthy, intensive, and complex investigative work—interviews, surveillances, and other investigative activity.

Special Agent-in-Charge Edward J. Ryan of the Office of the Inspector General, Office of Investigations of the Social Security Administration stated: “This fraud conspiracy scheme involving unscrupulous medical professionals and SSA disability claimants has been exposed and those involved are being brought to justice. It was only after the analysis of medical source documentation in SSA files that SSA, OIG was able to identify the fraudulent pattern. This intensive and complex investigative work with the FBI and PRPD consisted of numerous surveillances and other investigative activities that I cannot detail. This intelligence was also shared with the Health and Human Services OIG for their files. The evidence was provided to the U.S. Attorney’s Office which culminated in the additional arrests this morning. OIG will continue to work with our partners to protect the integrity of the Social Security Trust Fund.”

“This is another Social Security Disability Benefits Fraud case where shameless individuals illegally obtained the benefits provided by the Federal Government. This is not a victimless crime, but rather an outrageous, despicable and reprehensible act that deprives those who truly need assistance. Combating Social Security Disability Benefits Fraud will continue to be a priority for the FBI in Puerto Rico,” said Carlos Cases, Special Agent in Charge of the FBI.

The case was investigated by the Social Security-OIG with the collaboration of the FBI and the Puerto Rico Police Department. The case was indicted by First Assistant U.S. Attorney María Domínguez and Special Assistant United States Attorney Vanessa D. Bonano-Rodríguez.

On January 12 and 13, 2015 a Federal Grand Jury in the District of Puerto Rico returned 39 separate Indictments charging one doctor, Luis Escabi-Pérez, and 39 other individuals for fraud in the application process for Social Security Administration (SSA) disability insurance benefits in Puerto Rico, announced United States Attorney for the District of Puerto Rico, Rosa Emilia Rodríguez Vélez.

The SSA is responsible for the implementation of the Disability Insurance Benefits Program. The SSA provides monetary benefits to workers with severe, long-term disabilities, who have worked in SSA covered employment for a required length of time. Spouses and dependent children of disabled workers may also be eligible to receive benefits.

Pursuant to SSA regulations, a claimant must prove to SSA that he or she is disabled by furnishing medical and other evidence with the application. The application and supporting evidence would then be evaluated by SSA to determine the individual’s medical impairments and determine the effect of the impairment on the claimant’s ability to work on a sustained basis.

Defendant Luis Escabi-Pérez, psychiatrist, submitted Psychiatric Medical Reports to the SSA in support of applications for disability insurance benefits submitted by his patients. Escabi-Pérez charged a fee for the medical visits, typically in the amount of $100.00. In addition, the defendant typically charged a fee in the amount of $500.00, for the preparation and submittal of a Psychiatric Medical Report to the SSA. He would at times also charge additional fees of up to $5,000 to backdate medical records in order to create the appearance of a longer history of medical treatment.

For example, on January 15, 2014, Escabi-Pérez submitted a medical report to the SSA suggesting that a patient who was generally in good health, and was not suffering from any physical or mental disabling conditions, was in fact suffering from disabling psychiatric conditions, and that the first medical visit of this patient to him was in April, 2013, when in truth this patient’s first visit was in November of 2013.

The patient initially received $11,242 as a retroactive payment calculated from the date of entitlement through the approval date. Thereafter, the patient received monthly disability insurance benefit payments of approximately $1,536.00. The total amount of benefits paid to the patient from the date of entitlement through the date of this Indictment is approximately $27,096. Escabi-Pérez is also facing one charge of wire fraud. As part of the manner and means of the conspiracy, the doctor submitted via facsimile transmission the psychiatric report to the SSA supporting the existence of the alleged psychiatric conditions suffered by the patient in spite of the fact that these psychiatric conditions were contrived.

Five indictments charge five individuals along with doctor Escabi-Pérez of conspiracy to defraud the United States, wire fraud, theft of government property, concealment of failure to disclose an event to SSA and false statement in determining rights for disability. These defendants, aiding and abetting each other, knowingly and willfully embezzled, stole, and converted to their own use the Social Security Disability Insurance Benefit payments to which the defendants knew that they were not entitled.

Another five defendants filed SSA applications during the year 2011 indicated the defendants were unable to work due to “back problems, cervical conditions, pain, carpal tunnel, arms numbed, legs numbed, depression”, to mention a few. These defendants are charged with theft of government property because they embezzled, stole and converted to their own use or the use of others, Social Security Disability Insurance Benefit payments to which they knew they were not entitled. These defendants are also charged with false statement in determining rights for disability because they lied in the Disability Report (Form SSA-3368). The defendants stated that they stopped working because of their conditions, although the defendants knew that they stopped working because of a release agreement signed with pharmaceutical companies.

A third charge is for concealment or failure to disclose an event to SSA. These defendants intentionally concealed or failed to disclose the fact that their medical conditions had improved.

Twenty-nine defendants are facing two charges: theft of government property and concealment or failure to disclose an event to SSA.

The defendants who illegally received the benefits are: Wilma Bolet, Juana Concepción-Santana, Miriam Cosme-García, Yesenia De Jesús, Ramona García, María García-Reyes, Pedro Laureano-Vázquez, Juan López-Rivera, Elizabeth Maldonado-Laureano, Fernando Marrero-Padilla, Ernie Martell-Orta, Ángel Montes-Orria, Lourdes Reyes-Medina, Candi, Rojas-Molina, Ángel Román-Santana, Miguel Santana-Ríos, José Valle-Oliveras, Edna Vargas-Valdés, Agustín Vázquez-Izquierdo, Orlando Pérez-Juarbe, Jorge Fraguada-Romero, Elsie Boneta-Román, Julio César Álamo-Casiano, Manuel Rivera-Santos, Francisco Declet, Luis Reyes-Serrano, Ismael Alicea-Berdecía, Rosa Espinosa-González, Johany Díaz-Oquendo, Ángel Rivera-Adorno, Myrna Ruiz-Rosso, William Feliciano, Edwin Figueroa, Ana Morales-de Jesús, Rosa Pagán-Ramos, Alberto Sostre-Cintrón, Constancia Vega-García, Raúl Domínguez and Ana Ruiz-Rivera.

“This case is the result of the continued efforts of the SSA and the FBI. Since August 2013 when 75 individuals were indicted for similar charges, including the current charges, we have filed a total of 115 indictments,” said United States Attorney Rosa Emilia Rodríguez-Vélez. “This is a great example of ongoing efforts by the Government to deter fraud against the social security programs. The Department of Justice is committed to investigate and prosecute those who engage in fraudulent schemes. Hopefully this round of arrests will discourage more people from getting involved in these types of schemes, because the investigation continues”.

The Social Security Administration in New York and Baltimore conducted a lengthy analysis of medical source documentation in Social Security’s files, wherein a pattern of fraudulent activity was discovered, initiating a full investigation. What followed was lengthy, intensive, and complex investigative work—interviews, surveillances, and other investigative activity.

Special Agent-in-Charge Edward J. Ryan of the Office of the Inspector General, Office of Investigations of the Social Security Administration stated: “This fraud conspiracy scheme involving unscrupulous medical professionals and SSA disability claimants has been exposed and those involved are being brought to justice. It was only after the analysis of medical source documentation in SSA files that SSA, OIG was able to identify the fraudulent pattern. This intensive and complex investigative work with the FBI and PRPD consisted of numerous surveillances and other investigative activities that I cannot detail. This intelligence was also shared with the Health and Human Services OIG for their files. The evidence was provided to the U.S. Attorney’s Office which culminated in the additional arrests this morning. OIG will continue to work with our partners to protect the integrity of the Social Security Trust Fund.”

“This is another Social Security Disability Benefits Fraud case where shameless individuals illegally obtained the benefits provided by the Federal Government. This is not a victimless crime, but rather an outrageous, despicable and reprehensible act that deprives those who truly need assistance. Combating Social Security Disability Benefits Fraud will continue to be a priority for the FBI in Puerto Rico,” said Carlos Cases, Special Agent in Charge of the FBI.

The case was investigated by the Social Security-OIG with the collaboration of the FBI and the Puerto Rico Police Department. The case was indicted by First Assistant U.S. Attorney María Domínguez and Special Assistant United States Attorney Vanessa D. Bonano-Rodríguez.