Fwd: WSJ.com - Disability-Fraud Probe Leads to 75 Arrests in Puerto Rico - NYT - 70 Are Indicted in Puerto Rico in Social Security Fraud
Dick Goodwin
Federal agents on Wednesday arrested 75 people in Puerto Rico as part of a bust of alleged Social Security Disability Insurance fraud, one of the largest sweeps since the program was created in the 1950s and the first major one since its rapid expansion during the financial crisis.
As part of the case, the U.S. government said it planned to review and possibly terminate benefits received by about 6,600 people. Investigators said more arrests are imminent.
First Assistant U.S. Attorney Maria Dominguez of Puerto Rico said in an interview that 30 more people could be indicted soon and the investigation was continuing.
The Federal Bureau of Investigation on Wednesday arrested three doctors, a former Social Security Administration employee and 71 disability beneficiaries as part of a probe that included undercover operatives and lengthy surveillance.
The U.S. Attorney's office said the three indicted doctors would charge patients a fee, typically $150 to $500, for filling out government paperwork that alleged the applicants were unable to work, when in fact their claimed medical conditions didn't exist.
Also arrested was Samuel Torres Crespo, who worked for the SSA for 32 years before leaving to represent people seeking benefits. He is charged with mail fraud and wire fraud, among other things, for sending what the government said was bogus information to disability examiners to help clients win benefits.
WSJ on Disability Disparities
In 2011, WSJ revealed widespread disparities in how some states and U.S. territories implement disability benefits.
"My client has indicated that he is innocent," said Julio Gil de Lamadrid, lawyer for Mr. Torres Crespo. The lawyer said Mr. Torres Crespo doesn't see the medical forms and that "he doesn't know any" of the doctors named in the indictments.
Efforts to reach the three doctors—Wildo Vargas, Rafael Miguez Balseiro and Erica Rivera Castro—were unsuccessful, and lawyers for the three couldn't be identified.
SSA has created uniform standards to determine who qualifies for benefits but the process is uneven and open to interpretation, with some states and U.S. territories more lax than others, according to interviews with experts and government data.
A 2011 Wall Street Journal article detailed how Puerto Rico had become one of the easiest places to win benefits, with the island containing nine of the top 10 U.S. ZIP codes for disabled workers.
SSDI is funded by taxes paid by employees and employers. It was designed to pay benefits to Americans unable to work because of a debilitating mental or physical illness or injury.
The disability insurance program grew quickly during the economic downturn, with many people seeking benefits as a sort of safety net to job losses, according to interviews with applicants and experts.
In 2012, the program paid $136.7 billion in benefits to 10.9 million people, more than the federal government disbursed in food stamps. Officials now believe the program will exhaust its reserves by 2016 and no longer be able to pay full benefits unless major changes are made.
"That such fraud could occur in the first place raises serious and troubling questions regarding Social Security's management of the disability program," said Rep. Sam Johnson (R., Texas), who heads the House subcommittee that oversees Social Security. He said he plans to hold a hearing on the matter next month.
In early 2011, senior Social Security officials defended the screening process for applicants in Puerto Rico, saying it was rigorous and accurate.
On Wednesday, Beatrice Disman, the SSA regional commissioner responsible for operations in Puerto Rico, defended the agency's handling of the matter and said the arrests showed the effectiveness of safeguards designed to combat fraud.
"The process worked by what you saw today," Ms. Disman said.
The disability determination process depends in large part on medical opinions issued by independent doctors. This arrangement has fed concern that some doctors might write opinions to help an applicant win benefits.
"It's inevitable that there would be some fraud in a program this large and with benefits this attractive," said David Autor, an economics professor at Massachusetts Institute of Technology. "But how much of it goes on is something we really don't know."
The 71 arrested beneficiaries were indicted after federal investigators chronicled examples of each person performing tasks their claimed disabilities should have made impossible, Ms. Dominguez said. In some cases, investigators found those collecting disability benefits were in fact working for pay.
The SSA said the 6,600 cases under review stemmed from people who were awarded benefits based on medical evidence supplied by the indicted doctors, who were charged with providing false statements or representation to the SSA.
Close to 300 federal agents and local police canvassed the island for the suspects Wednesday morning, fingerprinting individuals at a basketball arena to make the process more efficient.
—Jonathan House contributed to this article.
Write to Damian Paletta at damian....@wsj.com
NEW YORK TIMES
More than 70 people have been indicted in Puerto Rico as part of a two-year investigation into widespread fraud in Social Security disability payments, federal prosecutors announced Wednesday.
Among those charged were three doctors and a former Social Security Administration employee who prosecutors said had helped people receive disability benefits they did not qualify for. Seventy-one people who made fraudulent medical claims were also charged, the authorities said, and if convicted would be required to forfeit more than $2 million.
The indictments were handed up last Friday, but the announcement was withheld until Wednesday, after law enforcement officers finished making arrests, officials said.
The United States attorney’s office in Puerto Rico said in a statement that an analysis of disability claims conducted by the Social Security Administration “suggested that Puerto Rico is one of the top districts in the country for the commission of this type of fraud.”
Only workers who have been certified as disabled — and in some cases, their family members — are entitled to benefits as part of the Social Security Disability Insurance Program. Those who qualify must have been employed and paid Social Security taxes in the past. The program is financed by Social Security taxes paid by workers and employers.
Prosecutors said that Samuel Torres Crespo, a Social Security employee, was at the center of the scheme. Mr. Torres Crespo, according to the indictment, completed fraudulent insurance applications for claimants who did not have medical disabilities that prevented them from working.
The people would then be passed on to one of three doctors working with Mr. Torres Crespo — Wildo Vargas, a psychiatrist; Rafael Miguez Balseiro, also a psychiatrist; or Erica Rivera Castro, a rehabilitation specialist — who would evaluate and make a diagnosis for the person making the claim.
Many of the claims from the doctors said workers had “disabling psychiatric conditions,” including depression and suicidal thoughts. Others were said to have serious back or cervical pain.
Once the Social Security Administration made a lump-sum payment to the claimant, Mr. Torres Crespo would collect 25 percent of that payment, and the doctors would receive $150 to $500 for each fraudulent medical report they had submitted, prosecutors said.
The United States attorney, Rosa Emilia Rodríguez-Vélez, said the defendants were “perpetrating a theft of public funds.”
The investigation, which officials said included hundreds of surveillances and painstaking analysis of medical records, began after a 2011 article in The Wall Street Journal that documented the large number of people receiving disability benefits in Puerto Rico. Among its findings was that about one-third of those receiving benefits in Puerto Rico qualified because of “mood disorders” — a rate the newspaper said was at least 10 percentage points higher than any state’s.
House Ways and Means Statement – Congressman Johnson
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Johnson Statement on Social Security Disability Insurance | ||||
Washington, DC - Today, Ways and Means Subcommittee on Social Security Chairman Sam Johnson (R-TX) made the following statement in response to the Social Security Disability Insurance fraud conspiracy in Puerto Rico. |
UNITED STATES ATTORNEY’S OFFICE
U.S. Department of Justice
Rosa Emilia Rodríguez-Vélez
United States Attorney
District of Puerto Rico
Torre Chardón, Suite 1201 (787) 766-5656 350 Carlos Chardón Street
San Juan, Puerto Rico 00918
FOR IMMEDIATE RELEASE Contact: U.S. Attorney’s Office
Date: August 21, 2013 Nedy Carrillo
Victim/Witness Specialist
(787) 282-1914; (787) 231-8060
ARREST AND INDICTMENT OF SEVENTY-FIVE INDIVIDUALS FOR SOCIAL SECURITY FRAUD
SAN JUAN, P.R. - On August 16, 2013 a Federal Grand Jury in the District of Puerto Rico returned 73 separate Indictments charging three doctors, Wildo Vargas, Rafael Miguez Balseiro, and Erica Rivera Castro; one non-attorney representative, Samuel Torres Crespo, a former Social Security employee; and 71 other social security claimants for fraud in the application process of Social Security Administration (SSA) disability insurance benefits in Puerto Rico, announced United States Attorney for the District of Puerto Rico, Rosa Emilia Rodríguez Vélez.
For the past two years the FBI and SSA-OIG have jointly investigated fraud in claims for SSA disability insurance benefits. Analysis conducted by SSA of the volume of pending, processed, and approved claims suggested that Puerto Rico is one of the top districts in the country for the commission of this type of fraud. The investigation focused on historical claimants, whose claims were medically supported by suspect physicians.
The SSA is responsible for the implementation of the Disability Insurance Benefits Program. The SSA provides cash benefits to workers with severe, long-term disabilities, who have worked in SSA covered employment for the required length of time. Spouses and dependent children of disabled workers may also be eligible to receive benefits.
Pursuant to SSA regulations, a claimant must prove to SSA that he or she is disabled by furnishing medical and other evidence with the application. The application and supporting evidence would then be evaluated by SSA to determine the claimant’s medical impairments and determine the effect of the impairment on the claimant’s ability to work on a sustained basis.
Samuel Torres Crespo would complete an SSA disability insurance application for a claimant in a manner calculated to justify a non-existent medical disability, in order to improperly deceive and persuade the SSA to award the claimant retroactive and future disability benefit payments. Torres Crespo charged and collected a fee equal to 25% of the retroactive lump sum payment made by the SSA, but not to exceed $6,000.00 dollars. The government has civilly forfeited approximately $1.7 million dollars and other valuables from Torres Crespo.
The doctors, Wildo Vargas, Rafael Miguez Balseiro, and Erica Rivera Castro, would evaluate, treat, and diagnose the claimants in a manner calculated to justify a non-existent disability in order to improperly deceive and persuade the SSA to award the claimants with retroactive and future disability benefit payments. The doctors would receive between $150.00 to $500.00 dollars for the submission of their medical reports to SSA.
The defendants who illegally received the benefits are Myrna M. Santos Rivera, Nevelline Tirado Gomez, Mayra L. Pantoja Carrelo, Obette Santiago Maldonado, Julio A. Crespo Crespo, Arnaldo Pino Hernandez, Jose Perez, Carmen L. Gonzalez, Olvin Rosado Ballester, Arlivone Rodriguez Rivera, Carlos Colon Gonzalez, Liz D. Vega Mena, Joanna Rodriguez, Lynette Figueroa Vazquez, Gerardo Torres Lopez, Aixa Prado Serrano, Joel Pabón Hernandez, Glorivette Montalvo Guzman, Ruth Adan, Lizbeth M. Martinez Velez, Juan J. Malpica Nieves, Victor R. Santiago, Carmen Noriega, Carmen R. Cortes Nieves, David Rodriguez Colon, Alex E. Morales Quijano, Cynthia E. Rivera Mejías, Ismael Rivera Figueroa, Enrique Torruella, Jismel A. Lozada Pabon, Jaime M. Santiago Piñeiro, Nancy Melendez Crespo, Madelyn Molina Valentin, Benny Bonet Rivera, Jose L. Orta Rivera, Jorge L. Morales Melendez, Hector L. Rodriguez Marrero, Luz D. Figueroa Diaz, Eduardo Serrano Quintero, Lissette Vidot Santiago, Victor O. Rodriguez Arroyo, Francisco L. Cintron Otero, Aurora Millet Millet, Neftalí Vazquez Erazo, Misael Ramirez, Jose L. Lozada Maldonado, Angel F. Declet, Maribel Matos Soto, Adelmis Rosario Hernandez, Nydia E. Rivera Rodriguez, Brenda I Rivera Rivera, Elsie Padilla Caban, Manuel Tirado Maldonado, Miguel Rivera Ayala, Luis R. Santiago Rodriguez, Juan C. Colon Casanova, Juan Arocho De Jesus, Adahid Galán Figueroa, Norma Calderon Ortiz, Leinette Bravo Maldonado, Alberto L. Pagan Rosario, Ruben Ortiz Rodriguez, Julio C. Baquero Torres, Doreli Pagan Castro, Sonia Candelario Castro, Carmen M Torres Hernandez, Luis Pastrana Pastrana, Maribel Varela Fuentes, Javier F. Declet Carrasquillo, Sandra I. Rios Serrano, and Hector L. Rodriguez Rodriguez. All the defendants are facing forfeiture allegations totaling more than 2.1 million dollars collectively.
“The claimants who defrauded the SSA by feigning medical disabilities, and the physicians who provided false medical justifications for these claimed disabilities, are perpetrating a theft of public funds.” said United States Attorney Rosa Emilia Rodríguez-Vélez. “Our office is committed to prosecuting those who abuse Federal programs and steal public monies, to the detriment of legitimate beneficiaries who have a legal right to the assistance monies.” stated Rodríguez-Vélez.
Special Agent-in-Charge Edward J. Ryan of the Office of the Inspector General, Office of Investigations of the Social Security Administration stated “This fraud conspiracy scheme involving unscrupulous medical professionals, a non-attorney representative, and SSA disability claimants has been exposed and those involved are being brought to justice. It was only after an extensive analysis of medical source documentation in voluminous SSA files that SSA and OIG identified the fraudulent pattern investigated by SSA OIG, the FBI San Juan Office, and the Puerto Rico Police Department. This intensive and complex investigative work consisted of numerous interviews, hundreds of surveillances, and other investigative activities that I cannot detail. The evidence was provided to the U.S. Attorney’s Office which culminated in the arrests this morning. However, our cooperative investigative work in this conspiracy continues. OIG will continue to work with our partners to protect the integrity of the Social Security Trust Fund.”
The case was investigated by the Social Security-OIG with the collaboration of the FBI. The case was indicted by First Assistant U.S. Attorney Maria Dominguez.
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