Social Security Cheats Bilk Taxpayers in the Billions

The Fiscal Times

Congress is demanding a “top-to-bottom” investigation into the Social Security Administration after a spate of high profile fraud cases have resulted in the loss of billions of tax dollars. 

During a hearing Thursday morning, Rep. Sam Johnson (R-TX), the chairman of the House Ways and Means subcommittee overseeing the SSA, ordered the Social Security Inspector General Pat O’Carroll to review the agency’s management practices, adding that it should be the IG’s number one priority. 

“Leave no stone unturned,” Johnson said. “Find out how this could happen and what Social Security can do to stop it. The rip-off of taxpayers by professional fraudsters has to end, and it must end now.”

Related: New Evidence That Disability Fraud Costs Billions

The hearing comes just one week after 106 people were indicted for allegedly attempting to defraud the government by collecting more than $23 million in Social Security Disability benefits for which they did not actually qualify. The investigation into the fraud scheme revealed that some of the people indicted were retired New York police officers or firefighters who falsely reported a mental illness stemming from responding to the tragic events of the Sept 11 terrorist attack on the World Trade Center in order to obtain hundreds of thousands of dollars in benefits.

"The exploitation by many of the defendants in this case of the tragic events of September 11, 2001 is nothing short of infuriating,” the inspector general said. “To do so makes a mockery of the lives lost that day and the heroism and integrity of the NYPD and Fire Department of New York City (FDNY) personnel who were there during and after the attacks.”

This was only the latest fraud scheme that has bilked the agency out of millions of dollars.

Last August more than 70 people were indicted in Puerto Rico after a two-year investigation into Social Security disability payments. According to The New York Times, three doctors and a former SSA employee were charged with helping people falsify their applications in order to qualify for the benefits.

“The public is fast losing faith in Social Security, and I don’t blame them, because I have too.  And while I fully recognize that there will always be bad apples, what is going on these days is very different,” Johnson said in a statement. “This is a program plagued by fraud conspiracies.”

Related: $600 Million Paid to Dead Federal Workers

The SSA is responsible for administering hundreds of billions in benefits each year to the disabled as well as older Americans. In 2013, nearly 58 million Americans received $816 billion in Social Security benefits, according to the agency’s website.  

Despite media coverage surrounding the high profile fraud schemes, SSA officials say fraud at the agency is rare. Testifying before the committee, SSA’s Acting Commissioner Carolyn Colvin, told lawmakers that her agency is doing a sufficient job of preventing fraud, but said SSA has been severely hampered by budget cuts and would need more funding.

“If we are to keep the incidence of fraud in the disability program low, we need support from both the public and Congress,” Colvin said. “Continued success also requires a sustained commitment of resources to ensure the integrity of the disability program.” Colvin noted that in the last two years, Congress appropriated $421 million less for “program integrity reviews” than was authorized in the Budget Control Act of 2011.

Related: Massive Benefit Scams Rip Millions from Taxpayers

“The net effect has been the loss of nearly 11,000 employees at Social Security—that means drastically fewer people standing watch for the next attempted theft and drastically fewer people available to serve those who truly need us,” Colvin said.

However, she added that the current omnibus bill that Congress is poised to pass shortly includes full funding of the program integrity reviews, which would help the review process and potentially save “billions of taxpayer’s dollars.”

For now, the committee has instructed Colvin’s office to report to Congress within 30 days detailing what the SSA is doing to prevent further crimes from occurring, as well as to include any recommendations for legislation that might help mitigate more fraud.

“Don’t just tell us about what you did. It’s clearly not been enough,” Johnson said. “And do not just say you need more money when the fact is that Social Security has utterly failed to protect taxpayer dollars in the first place. Social Security must first regain the trust of the American taxpayer before it can credibly argue for more money.”

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