The Walking Dead and Uncle Sam: Consequences of Social Security Fraud (42 U.S.C. Section 408)
Have you ever heard the saying, “Dead men tell no tales?” While this may be true, it is also apparently true that the dead can deposit Social Security checks.
By its own estimate, the Social Security Administration (SSA) erroneously paid out more than $133 million in benefits to deceased recipients over the past few years, mostly because the agency never learned that the beneficiary died until months or even years later.1 Wherever there is a glitch in the system, you can be sure that people will find a way to take advantage of it.2
Social Security Fraud by Representative Payees
How does this happen? For starters, the sheer number of deaths each year presents a data collection problem. More than 2.5 million Americans die every year, but the government has trouble tracking them all, and so nearly 2,500 dead people received Social Security payments in the last few years.3
For many recipients of Social Security, managing finances is difficult or impossible due to their age or a disability. Usually, this means a person has been appointed as a “representative payee” by the SSA to receive payments on the beneficiary’s behalf to take care of that person’s expenses and basic needs.4 Once the beneficiary dies, the representative payee is supposed to notify the SSA so that the payments will be discontinued.
The fraud begins in these cases when the representative cashes the checks that should never have been issued.
Federal Consequences of Social Security Fraud (42 U.S.C. Section 408)
Federal law makes it a crime for anyone to misuse government-issued benefits intended for someone else.5 According to the website of the SSA’s Office of Inspector General (OIG), it is a crime to “fail to notify the SSA of the death of a beneficiary and continue to receive and cash the checks of the deceased person.”6
Under 42 U.S.C. Section 408, a conviction for this crimes can result in a federal prison term of up to 10 years, as well as fines of up to $250,000. In addition, the defendant will be made personally liable for the misused funds, meaning they will be responsible for repaying the money they stole.
Social Security: Not Meant for the Dead
Recently, the OIG began to crack down on this type of fraud. An investigation called “Operation: Walking Dead” netted federal indictments against 18 individuals who stole over $1 million in benefits meant for their deceased relatives or other persons.7 In another surprising investigation, a Pennsylvania man admitted that he had been cashing his dead mother’s Social Security checks since 1972, stealing a total of $304,853.8
Contact the Attorneys at Wallin & Klarich to Learn More
If you or someone you care about has been accused of Social Security benefit fraud, contact one of our experienced federal defense attorneys as soon as possible. At Wallin & Klarich, our attorneys have worked for over 40 years with people accused of fraud and other serious federal crimes. We are committed to giving you the best defense possible. Our attorneys are available to answer any of your questions.
With offices in Los Angeles, Sherman Oaks, Torrance, Tustin, San Diego, Riverside, San Bernardino, Ventura, West Covina and Victorville, there is an experienced Wallin & Klarich criminal defense attorney near you no matter where you work or live.
Call us today at (877) 4-NO-JAIL or (877) 466-5245 for a free phone consultation. We will be there when you call.
1. [http://www.washingtonpost.com/politics/agencies-cant-always-tell-whos-dead-and-whos-not-so-benefit-checks-keep-coming/2013/11/03/5e0b89f6-40be-11e3-a751-f032898f2dbc_story.html]↩
2. [Id.]↩
3. [http://www.thenewamerican.com/usnews/constitution/item/15878-dead-people-collecting-millions-in-social-security-benefits]↩
4. [42 U.S.C. § 405(j)(1) (2006)]↩
5. [42 U.S.C. § 408(a)(5) (2006)]↩
6. [http://oig.ssa.gov/concealing-facts-or-events-which-affect-eligibility-social-security-benefits]↩
7. [http://oig.ssa.gov/audits-and-investigations/investigations/operationwalkingdead]↩
8. [http://oig.ssa.gov/audits-and-investigations/invetigations/sept25-pa]↩
