Your income paid for welfare fraud from sea to shining sea
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Most of us know of U.S. citizens who are truly in need of public assistance. They range from the orphans to the handicapped to the elderly. However, do recent events show that the unscrupulous with avaricious intentions have no trouble swindling the system to gain financial advantages?   

Last week, The Hill reported:

“The Department of Justice (DOJ) has charged more than 400 people, including 56 doctors, with healthcare fraud that cost taxpayers approximately $1.3 billion, Attorney General Jeff SessionsJefferson (Jeff) Beauregard SessionsA better way to run the Federal Bureau of Prisons Trump admin erases key environmental enforcement tool DOJ should take action against China's Twitter propaganda MORE announced on Thursday.”

A DOJ press release specified 413 people were charged. One of the individual frauds totaled $56 million and another $164 million. Additionally, “…295 healthcare providers are being suspended or banned from federal health programs as a result of the crackdown.”

This comes after multiple reports over the last week of investigators uncovering massive fraud in the federal and state government’s welfare programs.

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On July 12, NJ.com reported in a piece titled “12 more Lakewood residents charged in massive welfare fraud sweep” that “the recent charges bring the total amount of illegally obtained benefits to well over $2 million. Twenty-six Lakewood residents have been charged since June 26 in the joint federal, state and county crackdown.” The 12 consisted of six couples charged with stealing between $62,746 and $74,960 over a three to five year period.

One only has to look at their own yearly income tax payment to put these frauds in prospective and ask how much of my tax payments are going to finance these frauds?

The day before, on July 11, the Dallas Morning News reported “Alexis C. Norman, 46, is charged with running an operation involving more than $810,000 in false Medicaid claims.” This is all the more sensational since Norman was in federal prison while she perpetrated these frauds.

A week earlier, on July 5, The Hudson Valley (New York) News reported that “Nearly two dozen people from Orange and Dutchess counties have been accused in a welfare fraud sweep … 23 people stole a combined $220,000 in welfare benefits.” District Attorney Dave Hoovler said this seventh sweep in Orange County in recent years “has busted nearly 200 people for welfare fraud since 2014, thanks to a county special investigations unit that routinely checks individual cases for red flags. The work has so far recovered more than $500,000.”

These last few are just three jurisdictions, Dallas, Texas; Lakewood, N.J.; and Orange County, N.Y.! According to the U.S. Geological Service there are 3141 counties in the 50 states and the District of Columbia not counting the U.S. territories. Could one conclude similar investigations identifying millions of dollars in frauds might result from comparable investigations in each county?

All of these reports indicate that the perpetrators were able to accomplish the frauds by simply falsifying their original applications for assistance.

These reports come on the heels of the Government Accountability Office (GAO) May 2017 report on the Federal Communication Commission’s Lifeline program, more commonly referred to as the “Obamaphones,” issued last month entitled, “Additional Action Needed to Address Significant Risks in FCC’s Lifeline Program.

The GAO found:

“Lifeline’s structure relies on over 2,000 Eligible Telecommunication Carriers that are Lifeline providers to implement key program functions, such as verifying subscriber eligibility. This complex internal control environment is susceptible to risk of fraud, waste, and abuse as companies may have financial incentives to enroll as many customers as possible.”

Could we call this an example of the proverbial fox guarding the hen house?

It continues, “subsequent to our 2010 report, which found that Lifeline had limited abilities to detect and prevent ineligible and duplicate subscribers from enrolling in the program… (GAO) found a total of 5,510 potential internal duplicates…” and “…identified 6,378 individuals reported as deceased who are receiving Lifeline benefits…The date of death for each of these individuals preceded the Lifeline enrollment or recertification date by at least 1 year.” Further details revealed that audits of the telecommunications providers, who determine eligibility, averaged less than 0.17 percent between 2007 and 2013. That is 99.8 percent without oversight!

These reports all come to us from diverse sources within weeks. When taken collectively does this indicate that there is a serious lack of oversight in these programs across the nation with little to no scrutiny of original applications?

It is very doubtful if any investigations will result in any more than a fraction of the illegal payments returned to the government. Coupling this with the cost of the investigations, prosecutions, appeals and incarnation to our federal, state and local governments, wouldn’t be more cost effective to have an effective approval process at the front end, when these fraudulent applications are submitted? So why have our elected officials chosen not to put such systems in place when initiating these programs?  

While you sit down to write your checks to pay your taxes, should you be wondering how many are receiving checks funded with your earnings due to their falsifying applications with negligible government oversight?

Gretchen Morgenson and Joshua Rosner observed in “Reckless Endangerment” how lobbyists shifted “… the power of oversight to congressional subcommittees, run by members who could be easily swayed by the company’s lobbying efforts and campaign contributions.”

As our nation argues the future of healthcare, are we ensuring that these proposed bills in Congress include instituting adequate approval processes and oversight to protect our tax funds?

It is also the start of the U.S. government budget cycle. As the government begins the budget process, is our Congress ensuring that there are adequate safeguards in the social programs to prevent these frauds before the funds are distributed and lost forever?   

John M. DeMaggio is a retired special agent in charge and served as a captain in the U.S. Navy. The above is the opinion of the author and is not meant to reflect the opinion of the U.S. Navy or the U.S. government.


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