OIG Targets Large-Scale Disability Fraud Schemes

Beyond the Numbers

Tuesday, October 22, 2013
Posted by: 
The Office of External Relations

We’ve seen real-world examples splashed across the front page of the Wall Street Journal and elsewhere, of disability fraud conspiracies involving “third-party facilitators” in places like West Virginia and Puerto Rico.  We are stepping up our efforts to combat this type of fraud.

Social Security has always relied on the expertise and integrity of third-party facilitators—licensed medical professionals, attorneys, non-attorney representatives, interpreters, and social workers—to assist in the disability claims process and make sure that individuals who are truly disabled can apply for and receive Social Security disability benefits.

For the 18 years of our existence, “facilitator fraud” has always been an investigative priority.  But in the current fiscal environment, it’s even more critical—and more difficult—to make sure that only those who are eligible for benefits can receive them. One important way we can do this is by quickly identifying fraudulent claims and beneficiaries and taking appropriate action in those cases. 

We have recently conducted several high-profile facilitator fraud investigations. Last year, a San Diego-area psychologist, Roberto Velasquez, confessed to charging his patients 200 dollars each to fabricate medical evidence to support their disability claims.

And in August, we arrested 75 people in Puerto Rico, working with the FBI and the Puerto Rico Police Department to dismantle a large-scale disability fraud scheme involving physicians and a claimant representative (who is also a former SSA employee).

Since 1997, our Cooperative Disability Investigations Program has been identifying fraud when people first apply for benefits. We now have 25 CDI Units across the United States, that have helped save a projected $1.5 billion for SSA’s disability programs, by investigating claims and providing evidence to disability examiners that helps them make accurate disability decisions.

Our new pilot will serve as an extension of the CDI Program, but will focus on allegations involving third-party facilitators, particularly those that may indicate widespread fraud schemes or conspiracies.  The pilot will focus on allegations involving:

  • SSA senior executives, administrative law judges, administrative appeals judges, and other employees;
  • attorneys and non-attorney claimant representatives; and
  • medical evidence providers, consultative examiners, vocational and medical experts, and other disability contractors.

The Inspector General has asked SSA Associate Chief Administrative Law Judge Paul Lillios to manage this new pilot program.  Judge Lillios has been detailed from SSA to the OIG as a Senior Advisor, reporting to our Assistant Inspector General for Investigations. We recently spoke to Judge Lillios about the pilot. 

“The pilot is a continuation of longstanding activity,” Judge Lillios said. “There has been a significant degree of attention placed by the media, Congress, and the public on the integrity of SSA, and this heightens our obligation to protect funds as best we can.”

This new initiative will also leverage SSA’s existing management information regarding the disability claims process; and explore ways to compile and analyze data that could give us insight as to how we could proactively identify those disability claims that might be fraudulent or might involve a corrupt facilitator or even an employee.

The pilot is scheduled to run through next September.  The Inspector General will consider expanding the initiative nationwide after that, based on the success of investigations conducted during the pilot and an evaluation of the impact the pilot has on the disability process.