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Frauds by SSI recipients

Posted: Wed Oct 30, 2013 4:03 pm
by Number Six
I had a theft by deception case a while back where a seller of a rarity had advertised it, sent me a contract with a copy his driver's license on it. He kept the rarity and basically thumbed his nose at the system. I hired an attorney, we got a judgment against him, as the court date approached he contacted my lawyer offering a lame $100 a month payback which I countered with a more just figure.

I received this advice from someone familiar with the SSI system and fraudsters on it:

"Social Security runs SSI. You can go into any branch or district office.

"SSI is a needs-based program. It is for the aged, disabled and blind who meet strict income and asset limitations. If a beneficiary receives any income, whether it is earned (wages) or unearned (gifts, donations, etc.), the income is used to recalculate his benefit rate for the calendar quarter in which it is received.

"$3500 is a chunk of change and my guess is that it is enough to reduce his entitlement for those three months to zero, or close to it. It's virtually certain he didn't report it to SSA. So he received his regular monthly benefits for that quarter year and shouldn't have. The result is an overpayment which SSA will attempt to recover.

"Additionally, he will have to prove to SSA how he disposed of the money. Because if he didn't then the money becomes an asset next quarter which might disqualify him depending on other assets he has and what the limit is.

"I have been away from this for a long time. And it is possible that some rules have changed. If you feel like it dig around to learn about today's income and asset limitations.

"SSA may ask you to make a written, sworn statement. On the spot (nothing you need to prepare in advance). Do it.

"This will be a little unusual because you didn't intend to give the guy free money. But that's what it turned into. If you get any flak from the service representative you talk to you could ask to speak to a supervisor. They're generally a lot brighter than the average service rep.

"Lastly, if you don't feel the report you're making is being handled properly (attitudes, scoffing, whatever) you can write a letter to SSA. They will be obligated to act on it, not just toss it in the trash. One SURE way to get action with this letter is to send it to your congressman and cc SSA. He or she will contact SSA and ask for an investigation. These are called "congressional inquiries" and are handled as a very high priority.

"The bummer is you may never know what, if anything, was done. Because of privacy laws (though your congressman will report back to you with something). Based on my experience from long ago, the guy is gonna hurt. I don't think SSA will waive the overpayment and if he cannot repay it outright they will reduce his benefits until it is recovered."

I contacted my Congressman on the case, but the SSI expert said it is outside of their scope. I went to the SS office with the documents to substantiate my case, and they said they handled cases of routine fraud like people stealing checks, but not civil cases. I did an online complaint against this joker, but don't know whether they take action with such filings. Is an SSI fraud filing any good in cases like this?

Re: Frauds by SSI recipients

Posted: Wed Oct 30, 2013 6:12 pm
by The Observer
It is not clear from your narrative, but I am presuming that you had hoped to garnish his SSI income by enforcing your judgement against it. And apparently SSA has rules in place that allow a recipient to have a certain level of their benefit check exempt from garnishments or judgements. That negated your ability to collect, based on what SSA has on record in regards to his income. So then you attemped to negate his income based on your purchase of his advertised item for $3,500 thus demonstrating that he had income above and beyond the limits set for his situation.

But I think you expect too much from that dollar amount. After all, that $3,500 has to be averaged over 3 months; I am guessing that an extra $1,000 or so a month will not affect his monthly stipend much at all, if any (have a stepson who is on SSI due to a disability and he is allowed to earn up to $800 a month in extra income before he has his allowance reduced). At that point I imagine it is not financially efficient for SSA to go through the motions of proposing a reduction to his monthly check, for which I am almost asolutely sure that he would have appeal rights to contest and to continue it to the federal court level. Even if you were successful in reducing his SSI benefit, how would that help you recover? SSA would have even less reason to turn money over to you since his benefits would certainly be below the exemption amount, if they were not already.

The reality is that SSA's prime mission is to ensure that people receive the entitlements that they are promised under the law and not to be functioning as a collecter for other citizens against these same people over unrelated issues that come up in their lives. You were probably better off accepting the proposed $100 a month agreement for the interim and resolving to be more careful before engaging in long-distance transactions with people that have no referrals or testimony as to their reliability.

And finally, this is all rather misleading. His comitting of fraud against you is an entirely separate issue of whether he is committing fraud against SSA regarding his income level. Granted, if you could prove that he is raking in the bucks monthly by constantly defrauding people over the Net, by mail or phone, then you could show that he was definitely committing a second fraud against SSA in regards to not declaring his additional income. But you haven't done that, so his receiving of SSI income has nothing to do with what he did to you.

Re: Frauds by SSI recipients

Posted: Wed Oct 30, 2013 8:20 pm
by Arthur Rubin
The Observer wrote:It is not clear from your narrative, but I am presuming that you had hoped to garnish his SSI income by enforcing your judgement against it.
I read it differently. It looks to me as if the OP wanted SS to revoke the fraudster's SSI and fine or prosecute the fraudster for fraud against the government in concealing (or failing to report) the assets or income the fraudster received from the OP. (I hate cases where you need two pronouns.) Seems a reasonable approach. Too bad it didn't work.

Re: Frauds by SSI recipients

Posted: Wed Oct 30, 2013 9:38 pm
by The Observer
That was my second presumption. Which is why I pointed out the problem of trying to rely on one payment to get the benefit reduced based on the whole quarter. It would have been far better to be able to show a series of payments that the recipient had received during that 90 days. But obviously that would have required far more work and investigation to uncover proof - and it probably was not possible or practical to do so.

The sad fact of life is that some people become judgement proof for a number of reasons, and most of the time it turns out to be legal.

Re: Frauds by SSI recipients

Posted: Wed Oct 30, 2013 11:09 pm
by Number Six
I was just hoping that SSI would do their due diligence in pursuing fraud perpetrated by their clients. A system designed to help truly disabled people survive the inability to work should not be used as cover for fraudulent activity. There is a larger issue of people qualifying for SSI unjustly, the subject of a recent "60 Minutes" program. In a case like this it should not be that hard for the government to cut back "benefits" for their clients for cause; also for the IRS to take action for unreported income whether earned through fraud or by legal means.

Re: Frauds by SSI recipients

Posted: Wed Oct 30, 2013 11:57 pm
by JamesVincent
At least in the experience with my son so far Social Security only confirms what comes in when something else arises. When we recently moved I had to completely update everything and provide proof and receipts to back when he first started receiving it in 2011. Had not been asked that before. And was told that if I didn't provide those receipts, including rent, that he could either lose his benefits or be charged back on everything that had been paid. Fortunately I was able to get everything they needed together, including Child Support (or lack thereof). If the person in question is dealing in cash ( or cashable checks) they may very well not be able to trace it or do anything about it. And, like was said, there are amounts you can make before there is an issue and a reduction but that income still has to be declared. So either you inform SS or they catch your tax return.

It may very well be different for kids, I've been told the process is a lot harder for adults.