CNSNews.com - Social Security Sent $75.8 Million in Funds to Fugitive Felons

CNSNews.com - Social Security Sent $75.8 Million in Funds to Fugitive Felons

Social Security Sent $75.8 Million in Funds to Fugitive Felons
Friday, May 29, 2009
By Marie Magleby

A summary of the 2009 annual reports sits on a table at the Treasury Department in Washington after the annual spring meeting to discuss the financial situation of the Social Security and Medicare trust funds. (AP photo/Alex Brandon)

(CNSNews.com) - Since 2005, when it first began to crack down on the problem, the Social Security Administration (SSA) has paid out $75.8 million to fugitive felons receiving payments on behalf of other Social Security beneficiaries.

According to a report issued by the SSA inspector general’s office, in one case alone, an individual with an outstanding warrant for burglary that has been pending since 1991 received $25,019 on behalf of a mentally-disabled beneficiary from 2005 to 2008.

After the IG reported the case to SSA in June 2008, the fugitive felon was replaced with another more suitable "representative payee," the report said.

The SSA allows a “representative payee” to accept payments for beneficiaries whose age, mental state or physical condition inhibits their ability to manage their own finances.

According to Social Security, the agency has made efforts to keep fugitive felons from representing beneficiaries since April 2005, but success has been limited.

Social Security obtains felon information from law enforcement agencies and compares it to representative payee information using computerized matching software.

If there is a match, the SSA makes note of it and bars the individual from receiving payments on behalf of a beneficiary. The agency also theoretically passes the address of the fugitive to the proper law enforcement agency.

But in March, the inspector general issued an audit report that shows the matching system, at best, leaks like a sieve.

“The match doesn’t seem to be identifying all the cases,” Judith Olivier, director of the SSA Boston Audit Division, told CNSNews.com.

“We estimate that since the law took effect in April 2005 through September 2008, about $75.8 million in Social Security funds was paid to about 6,527 fugitive felons,” the report said.

The report states that missed “matches” have fraudulently put millions of tax dollars into the wrong hands.

“They really need to look back at their current process and see where it needs to be adjusted,” Olivier said.

The inspector general examined a random sample of 275 out of 14,594 fugitive felons who were representative payees, as of July 2007.

The investigation found that of the $75.8 million, “approximately $47.6 million (63 percent) in benefits was paid to about 2,070 representative payees who had outstanding warrants against them that remained “unsatisfied” more than a year later--through September 2008.

The SSA admitted that funds will continue to be routed to fugitive felons until the leaks can be patched.

“Additionally, about $19.4 million will be paid over the next 12 months if these warrants remain unsatisfied and the fugitive felons continue serving as representative payees,” the report said.

Law enforcement sought these individuals for a variety of offenses including larceny, fraud and drug-related crime. The majority of felons, 68 percent, were wanted for non-violent, non-drug-related crimes. Of those, police sought seven individuals for fraud and four individuals for counterfeit.

Of the 275 felons in the sample, 123 received $1.4 million while they had outstanding felony warrants. Another 96 felons no longer had active warrants. The remaining individuals were issued warrants for violating conditions of probation or parole, in which case they are still eligible to be representative payees.

Thirty-nine of the 275 still had outstanding arrest warrants at the time of the audit.

Eighty-eight fugitive felons were receiving payments on behalf of their mothers. Thirty-one felons were representative payees for their fathers, and 29 represented other relatives. The remaining 10 represented “other” relations, including friends, unrelated volunteer payees, unrelated guardians or room and board providers.

Some felons received payments for more than one beneficiary.

That is “not uncommon,” according to Olivier. “A lot of times, a parent will be a payee for their children and if they’ve got three children, they’ll be the payee for all of them.”

In the report, the IG recommended that Social Security “review its current computer matching process to ensure that, in the future, alerts are generated and resolved for all representative payees with outstanding felony warrants.”