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Post date: April 27 2001

Spitzer Announces 36 Charged With Stealing $1.3 Million In Federal-state Disability Payments

Attorney General Spitzer today announced that 36 people, many of them members of organized rings, have been charged with stealing $1.3 million in federal and state disability payments by faking disorders, including mental illness and retardation. Spitzer was joined in the announcement by Edward Ryan, Special Agent in Charge of the Social Security Administration's Office of the Inspector General in New York.

Most of the defendants received the maximum Supplemental Security Income (S.S.I.) check of $617 per month. The amount of money stolen ranged from $15,000 to over $100,000 per person. The defendants face multiple charges including Grand Larceny in the Second Degree, which carries a sentence of five to fifteen years in prison.

When applying for benefits, the claimants would state that they could not perform daily activities like leaving their homes, shopping and driving due to mental illness or other disorders. (See attached) But investigators subsequently observed them taking part in just such activities.

"Supplemental Security Income disability payments are for those who cannot care for themselves, not scam artists simply looking to supplement their income by illegal means," said Spitzer. "Those involved in this fraud - perfectly able to work and support themselves -- should be ashamed of themselves for stealing money earmarked to help the truly neediest members of society."

"The Office of the Inspector General and Social Security Administration have a zero tolerance policy against fraud, waste and abuse of Social Security programs and operations which includes SSI Disability Fraud," said Special Agent in Charge Edward J. Ryan. "These individuals feigned illnesses for personal financial gain by defrauding a system designed to aid the most vulnerable."

"The Pataki Administration places a high priority on the prevention, detection, and prosecution of individuals involved with public assistance fraud," said state Office of Temporary and Disability Commissioner Brian Wing. "I want to compliment the diligence and hard work of all the investigating agencies and reiterate our commitment to ensuring the integrity of programs for those truly in need."

The investigation revealed that 24 of the defendants were part of three different rings controlled by a 'representative payee' who purported to act on behalf of the 'incapacitated' claimants. One such representative payee, Nina Thompson, a/k/a Diane Vlado, received benefits on behalf of 12 claimants, while simultaneously collecting nearly $73,000 during the period covered by the indictment due to her own purported mental disabilities.

Many of those charged gave similar answers to questions posed by Social Security examiners. For instance, many claimants could not say how many legs a dog had, or what the color of a white horse was. These similarities among claimants with a shared representative payee initially alerted authorities to the fraud.

The defendants applied for the benefits at Social Security offices in Brooklyn. They were arrested yesterday and are being arraigned in Brooklyn Supreme Court.

The indictments were the result of an investigation by a joint task force of the Attorney General's Office, the Office of the Inspector General for the Social Security Administration and the New York State Office of Temporary and Disability Assistance.

Assistant Attorneys General Lesley Brovner and Felice Sontupe handled the case for Spitzer's office, under the direction of Criminal Prosecutions Chief Janet Cohn, and the head of the Criminal Division Peter Pope.