Philipsburg Woman Admits Lying to Receive Federal Social Security and Health Benefits

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

MISSOULA — A Philipsburg woman accused of lying about her living arrangements and assets in order to receive more Social Security Administration (SSA) benefits and other federal aid than she was entitled to receive admitted to charges today, U.S. Attorney Leif M. Johnson said.

Virginia Kathleen Pearson, 56, pleaded guilty to false statements to a government agency as charged in an indictment. Pearson faces a maximum of five years in prison, a $250,000 fine and three years of supervised release.

A plea agreement reached in the case calls for the government to seek dismissal of remaining counts of health care fraud, theft of government money and Social Security fraud at sentencing if the court accepts the agreement. Pearson also agrees to be responsible for full restitution of approximately $142,542.

U.S. Magistrate Judge Kathleen L. DeSoto presided. A sentencing date was set for Sept. 1 before U.S. District Judge Donald W. Molloy. The court will determine any sentence after considering the U.S. Sentencing Guidelines and other sentencing factors. Pearson was released on conditions pending further proceedings.

The government alleged in court documents that in 2006, Pearson applied for Social Security Income (SSI) from the SSA and was approved for benefits in 2008. For an initial assessment, Pearson reported that her husband lived with her in Philipsburg, and she started receiving SSA payments in a reduced amount because of her husband’s income. In September 2008, Pearson reported that her husband had left her household. SSA recalculated Pearson’s SSI and she began receiving substantially larger payments. From November 2008 until about December 2020, Pearson received Cost of Living Adjustment letters notifying her that her payments would increase and of her obligation to report changes to her household composition and income. Pearson also began receiving Supplemental Nutrition Assistance Program funds and Medicaid based on her representations that her husband did not live with her or provide her with financial assistance.

The government further alleged that in August 2019, Pearson’s husband applied for Social Security retirement benefits, reported he was married to Pearson and lived at the same residence with her since 2000. An investigation found that Pearson said she lived alone, paid a monthly rent and signed a form stating that her husband lived at an address in Anaconda. The investigation found that Pearson and her husband jointly owned the Philipsburg residence, and that rent should not have been deducted from Pearson’s resources. Pearson also did not disclose additional bank accounts and vehicles in her and her husband’s name and possession.

Pearson initially denied her husband lived at her house but later admitted he stayed there about 50 percent of the time. Pearson also admitted she knew she had to report changes in her household to SSA. Pearson’s misrepresentations resulted in an overpayment of SSI in the amount of $101,136, SNAP funds totaling $23,203 and Medicaid reimbursement of $18,203.

Assistant U.S. Attorney Karla E. Painter is prosecuting the case, which was investigated by the Social Security Administration Office of the Inspector General and Montana Department of Public Health and Human Services.