SSA Employee and Four Others Charged in Chicago-based, $1.9 Million Kickback Scheme

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

CHICAGO — A benefits authorizer at the Social Security Administration in Chicago authorized over $1.9 million in fraudulent benefits to more than 150 recipients who kicked backed cash to him and several others, according to a federal indictment unsealed today.

The benefits authorizer, JAYSON CRUZ, 39, of Chicago, worked at the Social Security Administration’s Great Lakes Program Service Center in Chicago. Cruz and four others were arrested this morning by federal authorities.

The 10-count indictment, which was filed on June 30, 2015, and unsealed today following the arrests, alleges that the defendants fraudulently caused the Social Security Administration to issue more than $1.9 million in payments to approximately 154 recipients between approximately September 2009 and December 2013.

Cruz was charged with 10 counts of wire fraud. MONICA KNOX-SUMRELL, 41; VONZELL WHITE, 33; MICHAEL ELARDE, 37; and JERRY BROWN JR., 36, all of Chicago, were each charged with two counts of wire fraud. All five defendants pleaded not guilty during their arraignments this afternoon before U.S. District Judge Virginia M. Kendall in Chicago. All five defendants were released on their own recognizance. Judge Kendall scheduled a status hearing for September 16, 2015 for all defendants.

According to the indictment, Cruz was one of the Social Security Administration employees responsible for authorizing monthly Old-Age, Survivors, and Disability Insurance Benefits to beneficiaries, representative payees, qualifying family members and representatives of deceased beneficiaries. The indictment alleges that Cruz, Knox-Sumrell, White, Elarde, and Brown recruited recipients of these benefits to receive additional payments on top of what they were legitimately owed. After Cruz fraudulently authorized the excess payments, Cruz, Knox-Sumrell, White, Elarde and Brown collected the majority of the money back from the recruited individuals, according to the indictment. Cruz also fraudulently authorized “underpayments” to White, Elarde, Brown and others, by falsely representing that they were relatives or representatives of deceased beneficiaries who were owed money from the Social Security Administration, according to the indictment.

Cruz authorized the fraudulent payments by entering false codes into the Social Security Administration’s electronic system, the indictment alleges. According to the indictment, Social Security Administration procedures allowed Cruz to authorize a payment of less than $6,000 to a recipient without supervisor approval. Cruz authorized the fraudulent payments in amounts slightly less than $6,000 in order to avoid detection of the fraud, the indictment alleges.

The indictment also alleges that Knox-Sumrell falsely represented to recipients that she worked for the Social Security Administration in order to further the scheme.

The sentence was announced by Zachary T. Fardon, United States Attorney for the Northern District of Illinois, and Tracey Thanos, Special Agent-in-Charge of the Chicago Field Division of the Social Security Administration’s Office of the Inspector General.

“Employee fraud is something we take very seriously,” Thanos said. “We have no higher priority than investigating and pursuing justice whenever these instances occur, and we will continue to do so.”

The investigation is ongoing, the officials said.

The indictment seeks forfeiture from all five defendants of approximately $1,981,290, as well as a residence in Chicago. Each count of wire fraud carries a maximum sentence of 20 years in prison; a $250,000 fine, which may be increased to the greater of twice the gain or twice the loss from the crime; and mandatory restitution. If convicted, the court must impose a reasonable sentence under federal sentencing statutes and the advisory United States Sentencing Guidelines.

The public is reminded that an indictment contains only charges and is not evidence of guilt. The defendants are presumed innocent and are entitled to a fair trial at which the government has the burden of proving guilt beyond a reasonable doubt.

The government is being represented by Special Assistant U.S. Attorney Heidi Manschreck. <p align="left"> From the U.S. Attorney’s Office, Northern District of Illinois: </p>

CHICAGO — A benefits authorizer at the Social Security Administration in Chicago authorized over $1.9 million in fraudulent benefits to more than 150 recipients who kicked backed cash to him and several others, according to a federal indictment unsealed today.

The benefits authorizer, JAYSON CRUZ, 39, of Chicago, worked at the Social Security Administration’s Great Lakes Program Service Center in Chicago. Cruz and four others were arrested this morning by federal authorities.

The 10-count indictment, which was filed on June 30, 2015, and unsealed today following the arrests, alleges that the defendants fraudulently caused the Social Security Administration to issue more than $1.9 million in payments to approximately 154 recipients between approximately September 2009 and December 2013.

Cruz was charged with 10 counts of wire fraud. MONICA KNOX-SUMRELL, 41; VONZELL WHITE, 33; MICHAEL ELARDE, 37; and JERRY BROWN JR., 36, all of Chicago, were each charged with two counts of wire fraud. All five defendants pleaded not guilty during their arraignments this afternoon before U.S. District Judge Virginia M. Kendall in Chicago. All five defendants were released on their own recognizance. Judge Kendall scheduled a status hearing for September 16, 2015 for all defendants.

According to the indictment, Cruz was one of the Social Security Administration employees responsible for authorizing monthly Old-Age, Survivors, and Disability Insurance Benefits to beneficiaries, representative payees, qualifying family members and representatives of deceased beneficiaries. The indictment alleges that Cruz, Knox-Sumrell, White, Elarde, and Brown recruited recipients of these benefits to receive additional payments on top of what they were legitimately owed. After Cruz fraudulently authorized the excess payments, Cruz, Knox-Sumrell, White, Elarde and Brown collected the majority of the money back from the recruited individuals, according to the indictment. Cruz also fraudulently authorized “underpayments” to White, Elarde, Brown and others, by falsely representing that they were relatives or representatives of deceased beneficiaries who were owed money from the Social Security Administration, according to the indictment.

Cruz authorized the fraudulent payments by entering false codes into the Social Security Administration’s electronic system, the indictment alleges. According to the indictment, Social Security Administration procedures allowed Cruz to authorize a payment of less than $6,000 to a recipient without supervisor approval. Cruz authorized the fraudulent payments in amounts slightly less than $6,000 in order to avoid detection of the fraud, the indictment alleges.

The indictment also alleges that Knox-Sumrell falsely represented to recipients that she worked for the Social Security Administration in order to further the scheme.

The sentence was announced by Zachary T. Fardon, United States Attorney for the Northern District of Illinois, and Tracey Thanos, Special Agent-in-Charge of the Chicago Field Division of the Social Security Administration’s Office of the Inspector General.

“Employee fraud is something we take very seriously,” Thanos said. “We have no higher priority than investigating and pursuing justice whenever these instances occur, and we will continue to do so.”

The investigation is ongoing, the officials said.

The indictment seeks forfeiture from all five defendants of approximately $1,981,290, as well as a residence in Chicago. Each count of wire fraud carries a maximum sentence of 20 years in prison; a $250,000 fine, which may be increased to the greater of twice the gain or twice the loss from the crime; and mandatory restitution. If convicted, the court must impose a reasonable sentence under federal sentencing statutes and the advisory United States Sentencing Guidelines.

The public is reminded that an indictment contains only charges and is not evidence of guilt. The defendants are presumed innocent and are entitled to a fair trial at which the government has the burden of proving guilt beyond a reasonable doubt.

The government is being represented by Special Assistant U.S. Attorney Heidi Manschreck.