Pricey Penalties for Social Security Fraud

Beyond the Numbers

Wednesday, August 1, 2012
Posted by: 
The Office of External Relations

Withholding information from the Social Security Administration can prove to be costly, as one Washington State woman recently learned. 

The state disability determination office referred the woman’s disability claim to our office for investigation. They had become suspicious because several members of the woman’s family were also receiving benefits for similar disabilities, including low IQ and learning disabilities.

We investigated and found that, although she claimed to be single, the woman had been married for three years—and her husband earned more than enough money to disqualify her for government assistance. She had also recently graduated from college.

Social Security applicants and beneficiaries are required to give accurate information about their income, living arrangements, medical condition, and other things that affect eligibility for benefits. They also have to tell SSA when this information changes—for example, when they move, or start working. 

The vast majority of beneficiaries—and representative payees—do give accurate information, and they try to comply fully with SSA’s reporting requirements. But sometimes, people lie to or hide things from SSA so they can keep their benefits—and those who do are not just stealing from SSA, but from the people who rely on that money to meet basic needs, like food and housing.

The Washington State woman admitted she didn’t tell SSA she was married so she could continue receiving Supplemental Security Income (SSI).  At the same time, her husband was earning a sizable income—they even owned several luxury vehicles. In all, the woman received over $18,000 that she was never eligible for.

Sometimes, though, even when we find evidence of fraud, prosecutors decide not to bring criminal or civil charges. This can happen for many legal and practical reasons. Fortunately, we in the OIG have another way to recoup taxpayer money and make individuals face the consequences of their actions:  our Civil Monetary Penalty, or CMP, program.

Federal law gives us the authority to impose a CMP against beneficiaries or their representative payees when our investigators find evidence that they lied to, or withheld facts from, the government. We can impose up to $5,000 for each time a person lied or withheld facts. And, we can also make the person repay up to twice the amount of the benefits that they received fraudulently.

The CMP program works like this: 

  1. Our investigators refer cases to our attorneys for consideration of a CMP action. 
  2. Our attorneys decide on a penalty amount, and either negotiate a settlement, or go to a hearing before an administrative law judge.
  3. If we impose a penalty, SSA can collect it through administrative actions, including withholding future benefits.

In the first half of Fiscal Year 2012, the OIG’s attorneys closed 941 CMP cases and imposed over $4.6 million in penalties and assessments.

In the case of the Washington State woman, we negotiated a CMP settlement with her in which she agreed to pay $38,844–which included her $18,844 SSI overpayment and a $20,000 penalty. 

The bottom line is this:  People who lie to or conceal facts from SSA might keep receiving their benefits for a while. But if we find out, we can make them pay back not only the amount they stole, but a lot more. That’s a high price to pay.

Feel free to comment on this blog post below. And to report fraud in Social Security’s programs, click here.