Fraud Hotline Tip Helps End Disability Scheme

Beyond the Numbers

Tuesday, September 22, 2015
Posted by: 
The Communications Division

We’re persistent in our promotion of the Social Security Fraud Hotline—we never know when someone might have a credible tip to report.

Take, for example, the case of James Carson.

Carson, of New York, was recently sentenced for carrying out a multi-year Social Security disability fraud scheme, in which he falsely claimed a back injury prevented him from working—while he concealed a six-figure salary as the security director of a luxury watch company.

He might have continued to abuse the Disability Insurance program had it not been for the promotion of our Fraud Hotline in and around New York City in early 2014. That’s when Inspector General Patrick O’Carroll joined the Manhattan District Attorney to announce the indictments and arrests of more than 100 people—many of them retired New York City police officers and firefighters—for their involvement in a large-scale disability fraud scheme.

During press events and in materials about the arrest operation, the Inspector General and the Manhattan DA encouraged the public to report similar instances of Social Security fraud to our Hotline. Soon after the New York City arrests, we received a tip alleging that Carson—who himself was a retired NYPD officer—was on disability while employed by a New York City-based watch company.

Our special agents in New York investigated and learned Carson retired from the NYPD in 1991; soon after, he started receiving Disability Insurance due to a back injury. However, they also found that Carson had worked for the watch company since at least 2004 (he even won a national award in 2010 for his investigation into credit card schemes targeting the company).

According to the OIG investigation, Carson went to great lengths to conceal his income; it turns out he established a private corporation and had his employer pay his salary to the firm so SSA would not recognize the earnings as his.

In a 2014 interview with SSA, Carson also claimed he hadn’t worked since he left the NYPD almost 25 years ago. He also said he needed a cane to walk and was limited in his daily activities because of his back problems. All told, he collected about $306,000 in disability payments.

When we arrested Carson last October, he was charged with government theft, making false statements, and failing to report income. Earlier this month, a Federal judge sentenced Carson to five years’ probation, including 300 hours of community service, and ordered him to pay back all of the stolen money to SSA.

Every year, we receive thousands of allegations through our Fraud Hotline. In this case, one of them uncovered a longstanding fraud scheme and generated hundreds of thousands of dollars in Social Security recoveries. Any tip can make a difference, so we’ll keep asking public citizens like you to report them to us.

With that said, here’s some more anti-fraud promotion:

You can report Social Security fraud online through; send U.S. Mail to 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.