Deceased Payee Fraud: Strange but True

Beyond the Numbers

Thursday, January 2, 2014
Posted by: 
The Office of External Relations

Recently, a Virginia woman was sentenced to six months in prison for failing to report the death of her 87-year-old grandmother to Social Security—and collecting her Social Security benefits.  

Yvette Disnew’s grandmother died on April 12, 1999. Withdrawing money from a joint bank account over a 10-year period, Disnew stole $152,000 from SSA. As part of a project to verify whether very elderly beneficiaries are still alive, an SSA employee visited the grandmother’s last known address, and was told she died years before.  SSA then referred the case to us for a criminal investigation.

Every day, we receive reports of Social Security-related fraud, waste, and abuse from outside sources like the public, and inside sources like SSA employees. Our investigators take on many of these cases, which can lead to administrative and financial penalties or even criminal convictions. Our investigations can also lead to the recovery of stolen funds through court-ordered restitution or other means.

One strange, yet surprisingly common way people steal Social Security benefits is through “deceased payee fraud,” just as the woman did in this Virginia case. Unfortunately, some people will go to great lengths to conceal their loved ones’ deaths if they can keep collecting a monthly check by doing so. When SSA is not notified of a beneficiary’s death by a funeral home, a state agency, or a family member, the benefits can potentially continue for many years.  

Here’s another recent case of a Pennsylvania man who admitted to cashing his deceased mother’s Social Security for almost 40 years—from her death in 1973 until 2012.  He pled guilty in Federal court, and will be sentenced on January 23 to a maximum of 10 years in prison and a fine of $250,000.

As strange as this may seem, sometimes those left behind have done more than just fail to report their loved ones’ deaths. Last July, a woman was sentenced to over four years in prison after she collected the Social Security benefits of a man who lived in an unlicensed adult foster home that she operated. After he died in 1996, the woman buried him on her mother’s property and even aided the decomposition process by dumping bags of lime on the grave.

She forged his name on the benefit checks that kept arriving, and collected more than $200,000. The woman and her domestic partner initially told our investigators that the deceased man was still alive but out of town. Later they admitted he had been dead for years.

The woman’s domestic partner was ordered to complete 100 hours of community service for each of his five years of probation; and the home they shared is being sold to pay court-ordered restitution of $203,528.

Our special agents are dedicated to preventing this type of fraud and bringing those responsible to justice. If you suspect that someone is committing Social Security fraud, please report it through the OIG Fraud Hotline. We depend on the willingness of public citizens to bring these allegations to our attention.

To read about other cases like these, please visit our Investigations page.