A multimillion-dollar fraud scheme and big casino winnings apparently was not enough for a Washington couple—they improperly padded their fraudulent fortune with Supplemental Security Income (SSI), as well.
Because of an OIG, FBI, and IRS investigation, a judge recently sentenced Floyd Mann to 10 years in prison for defrauding Alaskans of $2.7 million through an advance-fee scheme, in which he falsely promised people a significant return on an investment that did not exist.
According to the investigation, Mann led his victims to believe that he was the recipient of a massive settlement—worth hundreds of millions of dollars—from a class-action lawsuit against a pharmaceutical company. Mann told victims that if they helped him pay his medical bills and other lawsuit-related expenses, he would repay them and provide them a substantial return on their money; payment would occur after Mann received the settlement.
Mann, however, did not use his victims’ money to pay medical bills. Instead, he regularly gambled the money at casinos—he was lucky, too, winning over $1 million in jackpots. Mann went to great lengths to carry out his scheme from about 2011 to 2016; he created fraudulent court documents and had co-conspirators pretend to be judges and federal agents to verify his fraudulent stories to the victims.
Collecting SSI While Defrauding Victims
The FBI and IRS contacted OIG investigators about this case in 2016; our investigators determined, while Mann ran his scheme, his wife, Cheryl Mann, served as representative payee for him and their son and collected SSI on their behalf. According to the investigation, Cheryl Mann collected about $81,000 in SSI while her husband operated the scheme and amassed significant gambling winnings.
SSI is a needs-based assistance benefit, and recipients are required to notify SSA if they accumulate legal or illegal income, as that income may affect their eligibility for payments; the Manns did not disclose any of the funds obtained through the scheme or gambling to SSA, which would have ended their SSI eligibility. In fact, Cheryl Mann had her own lucky streak during this time—she won a reported $125,000 from gambling—and she withheld that information from SSA.
Because of the investigation, authorities arrested and charged the Manns in September 2016. Cheryl Mann pleaded guilty to Social Security fraud, and a judge sentenced her in July 2017 to probation and ordered her to repay $81,000 to SSA.
Floyd Mann pleaded guilty to wire fraud and money laundering. In addition to the prison sentence handed down in December, the judge ordered Mann to make full restitution to his victims, though Mann reportedly gambled away all of his victims’ funds.
At sentencing, the judge said Mann was a “dogged, determined, charlatan” and through his “sophisticated, devious, and calculating" nature, caused “permanent financial and emotional damage to dozens of people.”
If you suspect SSI fraud or other forms of Social Security fraud, you can submit an allegation to the OIG. You can file online at https://oig.ssa.gov/report; send U.S. mail to the Social Security Fraud Hotline, P.O. Box 17785, Baltimore, MD, 21235; fax (410) 597-0118; or call (800) 269-0271 from 10 a.m. to 4 p.m. Eastern Time, Monday through Friday.