Social Security Fraud

By Tom Beveridge.             On February 26, 2014, Carolyn W. Colvin, the Acting Commissioner of Social Security, testified before Congress regarding the Social Security Administration’s efforts to investigate and stop disability fraud.  Commissioner Colvin indicated that fraud rate in the Administration’s disability programs is actually less than 1 percent; however, no amount of fraud is tolerable.  In fact, she issued this powerful warning to claimants and applicants:

“We have no tolerance for fraud, and I reiterate to those who would defraud Social Security: We will find you; we will prosecute you; we will seek the maximum punishment allowable under the law; and we will fight to restore the money you’ve stolen to the American people. “

In my practice, I am pleased to say that I have very rarely encountered actual cases of Social Security fraud.   However, I have exchanged stories with other practitioners who have been involved in such cases – most of which ended quite badly for the claimants.  Suffice it to say, fraud simply isn’t worth the risk.

Fraud occurs when an individual knowingly and intentionally makes false statements or conceals material facts in an attempt to obtain benefits.   Examples of such conduct include using false Social Security numbers, offering false information on applications, forging or falsifying Social Security documents, conspiring to present a false claim for benefits, etc.    From the initial application process and ongoing, Social Security personnel are on the lookout for fraudulent claims, statements or actions.

The penalties for Social Security fraud can be very significant.   Obviously, the SSA can reopen a claim or determination to eliminate any false information and reevaluate the claim.   Significant criminal and civil penalties also exist depending on the type of fraud involved.   For example, making false statements in an attempt to secure benefits is a misdemeanor and carries a penalty of up to a $1,000.00 fine and up to 1 year in jail.   Even worse, an individual who presents a false claim under the guise that he or she is someone else who may be entitled to such benefits faces a felony punishable by a fine of up to $10,000.00 and imprisonment of up to 5 years.  42 U.S.C. §1307.  In addition to criminal penalties, an individual convicted of fraud will have to repay the SSA any amounts received.

As with any application for benefits, it is absolutely critical that a claimant provide truthful and complete information during the process.   When discovered, false information simply “red-flags” an application, and the denial of benefits is the likely end result.