Disability fraud and deceased benefit fraud are two of the biggest threats to the integrity of the Social Security Administration, according to the agency’s Inspector General. Patrick O’Carroll says preventing those types of fraud before they start is his number one priority this year. He shared his Top 3 for 2015 on In Depth with Francis Rose. He tells Federal News Radio’s Sean McCalley how his office plans to meet its goal.
Fighting disability fraud by adding specialized units to investigate questionable claims, and using predictive analytics to identify claims at high risk of fraud: About 80 percent of the cases we open every year are related to Social Security disability fraud, and we had more than 6,200 cases in fiscal 2014. The Congress and the American public are understandably concerned about the integrity of Social Security’s disability programs. We want to do everything we can to identify fraudulent claims as early as possible because it’s difficult to recover the money in hindsight. The Cooperative Disability Investigations (CDI) program continues to be one of our most successful anti-fraud tools — our special agents work with Social Security program experts and local law enforcement to gather evidence to help decide disability claims. In fiscal 2014, CDI efforts contributed to more than $336 million in projected savings for Social Security. We now have 27 CDI units covering 23 states and Puerto Rico, and we hope to open five more units this year.
In this fiscal environment, and with a program this large, it’s critical to get technology on our side, so we are also partnering with SSA to explore using predictive analytics to evaluate disability claims, much like private-sector insurance companies are already doing. We are looking at past fraud cases for trends, patterns and indicators that we can use to screen new claims. We would then flag questionable claims for further analysis or investigation. We want to be very targeted — and accurate — in our analysis, so we can identify the bad claims and allow Social Security to focus on the vast majority of claimants who are legitimately disabled. Many of them are also financially vulnerable, so we want to make sure SSA can process those claims quickly.
Combating electronic Social Security fraud by identifying trends, recommending preventive measures, and increasing public awareness of these schemes: In recent years, Social Security, like other federal agencies, has transitioned most of its business from paper to electronic transactions — with online services like the “my Social Security” account and others — and criminals have made the move online as well. Our traditional casework involves people who exaggerate a disability or hide income to defraud Social Security. Now, we’re tracking identity thieves who can steal other people’s payments from a laptop or a cell phone. For example, in December, a 27-year-old Florida man was sentenced to two years in prison for leading a Boston-based fraud scheme in which people stole personal information, used it to create fraudulent my Social Security accounts, and directed Social Security benefits and tax refunds to bank accounts they controlled. They stole more than $110,000 from the government through the scheme. As soon as Social Security began allowing people to change their bank account information online through “my Social Security,” we started receiving reports of fraud schemes, and we’ve received more than 40,000 of these reports to date. Of course, Social Security pays benefits to 66 million people every month, so direct deposit fraud is still rare, but we’ve made this an investigative priority. These schemes can cause financial hardship to some beneficiaries, and they often include tax fraud as well, increasing the amount of money lost and the loss of confidence in government transactions. These are challenging cases, but we’re pursuing as many as we can, and we’re also working closely with Social Security to help strengthen its existing controls against this type of identity theft. Finally, we’re helping SSA identify links in fraudulent online transactions and recommending solutions for vulnerabilities we find as we evaluate these electronic services.
Pursuing deceased payee fraud investigations and promoting methods to detect and identify these cases: In just the last three years, we’ve closed more than 1,300 investigations of people who stole the Social Security benefits of someone who had died. Of those cases, we got more than 400 criminal convictions and $69.5 million in restitution and savings by stopping the benefits. The person who commits this type of fraud is usually a family member of the deceased or someone else the deceased person was connected to with a joint bank account, power of attorney, etc. This past October, a 67- year-old man in Washington state was sentenced to a year in prison for stealing his deceased father’s retirement benefits for 17 years. Since 1996, the man had been forging his father’s signature on bank documents to carry out the fraud. In all, he stole almost $220,000. When we first went to the man’s house to investigate in 2013, he immediately said it was a relief that the “wait for the knock on the door is over.” We investigate as many of these cases as we can to deter others from doing this, and we are also working with Social Security to identify deceased beneficiaries who are still being paid. Based on previous OIG audit work, Social Security is now using data from the Department of Health and Human Services to identify Social Security beneficiaries over age 90, who have not filed a Medicare claim in three years, and determine if they are still alive.
In our special radio report, Top 3 for 2015, federal experts tell In Depth host Francis Rose what top three concepts, trends or priorities they believe will be important in 2015.