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Nov. 28, 2011

Eleven Charged with Welfare Fraud

MEXICO - Eleven people were recently arrested and charged with welfare fraud and grand larceny following several months of investigation by the Oswego County Department of Social Services Fraud Investigative Unit. The arrests, which took place over a three-week period, involve the alleged theft of more than $46,000 in food stamps, cash assistance and Medicaid benefits.

The cases were researched by the Department of Social Services Fraud Investigative Unit and referred to the County District Attorney's Office. Oswego County Sheriff's deputies made the arrests.

The combined over-payment due to fraud on all of the cases amounted to $6,931 in cash assistance, $19,663 in food stamps, and $19,462 in Medicaid, for a total of $46,056.

"The Fraud Investigative Unit works to identify applicants and recipients of benefits who are attempting to establish or maintain eligibility for benefits fraudulently," said County Legislator John Proud, District 7, chairman of the Legislature's Health and Human Services Committee.

"The amount of taxpayer dollars recovered through the work of these employees is significant," said Legislator Proud. "Last year, the unit sent 13 fraud cases, totaling $52,938, to the District Attorney's Office for prosecution. The county also sees significant cost avoidance for each application denied benefits on the front end due to the fraud prevention systems that we have in place. Last year the fraud unit saved nearly $1.2 million in avoided cost of benefits. These are tax dollars that were never paid out because the staff found the fraud before any benefits were issued."

Martha Babcock, Director of Administrative Services for the Oswego County Department of Social Services, said there are certain indicators and discrepancies that examiners look for when they interview a person applying for benefits. "The staff also follows up on referrals from the general public and the state and federal governments," said Babcock. "We work collaboratively with the District Attorney's Office on cases that exceed $3,000."

Those arrested face charges of welfare fraud, third degree and grand larceny, third degree. Some also face charges of offering a false instrument for filing, first degree. Arrested were Amy J. Smith, Fulton; Gretchen L. Shepard, Oswego; Michael Thorpe, Scriba; Janelle Thorpe, Oswego; Marie Sutherland, Oswego; Susanna Brown, Pennellville; Douglas Spears, Central Square; Cherrie Alexander-Marks, Phoenix; Shannon Lunderman-Clew, Fulton; Kimberly Stockwell, Oswego; and Kody Goglio, Oswego.

"Our office reviewed the files after they were sent over from DSS to make sure that we have sufficient evidence to prove the case," said Greg Oakes, Chief Assistant District Attorney. "Once we reviewed the files, we forwarded the cases to the Sheriff's Department so that the defendants could be arrested. We will process the cases the same as any other offense. Of course, as with any case, all of the individuals arrested are presumed to be innocent."

The Fraud Investigative Unit is supervised by a Resource Coordinator and includes three Social Services Investigators, a Social Welfare Examiner, a Community Service Worker and a Typist.

"When a referral is received, investigators gather and verify information relevant to the case to determine whether or not the recipient intended to commit fraud," said Gregg Heffner, Commissioner of Social Services. "The team receives about 53 referrals a month. More than half of the allegations result in an investigation. The unit also assists the County Housing Assistance Office in investigating cases where fraud is suspected."

Although not all cases are referred to the DA's Office for prosecution, systems are in place to prevent fraud and recover over-payments for cases involving less than $3,000.

An administrative disqualification hearing process is used for cases involving temporary assistance or food stamps that involve $3,000 or less. These cases are presented to the New York State Office of Temporary and Disability Assistance for a determination.

Defendants in cases involving more than $3,000 may be given the opportunity to sign a "disqualification consent agreement" and agree to repay all benefits over-issued. People accused of Medicaid fraud are not eligible to sign disqualification consent agreements.

The "Front End Detection System" is a federally-mandated program designed to help identify fraudulent temporary assistance applications. Certain conditions, such as an applicant working off the books or a prior history of case denial, are automatically referred for investigation. Of the 261 referrals received last year, 21 percent resulted in a denial or reduction of benefits, a cost-savings of $516,384.

"In 2010, the investigative unit obtained 30 fraud convictions through prosecution, disqualification consent agreements, administrative disqualification hearings and voluntary admissions," said Legislator Proud. "I am very proud of the hard work and dedication of our staff, and their commitment to serving the public."

The Legislature's Health and Human Services Committee oversees the Department of Social Services. In addition to Legislator Proud, committee members include vice chairman Jacob Mulcahey, District 15; Barbara Brown, District 8; James Karasek, District 22; Margaret Kastler, District 1; Ronald Sakonyi, District 5; and Terry Wilbur, District 21.

For more information, or to report a suspected case of social services or housing assistance fraud, contact the Investigative Unit at 315-963-5281.


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