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Tag: welfare fraud

  • State uncovers $2.3M in welfare, food stamp fraud

    State uncovers $2.3M in welfare, food stamp fraud

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    BOSTON — Investigators uncovered more than $2.3 million in welfare fraud in the most recent quarter, according to state Auditor Diana DiZoglio’s office.

    The office’s Bureau of Special Investigations looked into more than 1,235 cases during the final quarter of the fiscal year, from April 1 to June 30, and identified at least 176 instances of public assistance fraud, about 80% of which was in the Supplemental Nutrition Assistance Program, previously known as food stamps.

    The bureau, which has the power to investigate welfare fraud, said benefits paid from the food stamp program amounted to more than $1.9 million of the fraudulent activity in the previous quarter. At least $245,858 in fraudulent activity was related to MassHealth, the state’s Medicaid program, the agency said.

    Another $138,081 was uncovered in the state’s primary cash assistance program, known as Transitional Aid to Families with Dependent Children, DiZoglio’s office reported.

    Of the $2 million in welfare fraud, federal and state courts have so far recovered only $103,142 in restitution, the auditor’s office said.

    In the previous fiscal year, the auditor’s office uncovered more than $12.3 million worth of welfare fraud from about 780 cases that were looked into by investigators.

    DiZoglio said the bureau’s investigations are “making government work better by identifying fraud, waste, and abuse of tax dollars so that residents actually in need have access to support and services.”

    In fiscal 2022, the auditor’s office uncovered more than $13.5 million worth of welfare fraud from about 600 cases that were investigated.

    That was a 120% increase in the dollar value from a year earlier, when investigators uncovered about $6.1 million in fraud.

    Demand for food stamps and other public assistance has risen amid the economic fallout of the COVID-19 pandemic, and has remained high amid inflationary costs.

    As of April, more than 111,000 people in Massachusetts were receiving basic welfare benefits from the state’s main cash assistance program, according to the latest state data.

    Meanwhile, an additional 1 million people were getting food stamps as of March, according to the latest federal data. That’s more than double the pre-pandemic average of about 450,000 recipients.

    Under current law, a recipient is limited to receiving welfare for two years in any five-year period. A family of three in the program collects roughly $593 per month.

    In the fiscal year that gets underway July 1, the state plans to spend more than $300 million on cash assistance programs for welfare recipients.

    The state has tightened its welfare fraud rules in recent years following previous audits showing widespread abuse, including the names of dead people being used to claim benefits. The penalty for welfare fraud is up to 10 years in prison, in addition to repayment of the money.

    Advocates for the benefits programs point out that welfare fraud only accounts for a fraction of the cash assistance the state provides every year. They argue that the money devoted to investigating fraud would be better spent on expanding benefits for the needy.

    Christian M. Wade covers the Massachusetts Statehouse for North of Boston Media Group’s newspapers and websites. Email him at cwade@cnhinews.com.

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    By Christian M. Wade | Statehouse Reporter

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  • Watchdog agency increases its pandemic unemployment benefits fraud estimate to as much as $135 billion | CNN Politics

    Watchdog agency increases its pandemic unemployment benefits fraud estimate to as much as $135 billion | CNN Politics

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    Washington
    CNN
     — 

    As much as $135 billion in fraudulent Covid-19 pandemic unemployment insurance claims were likely paid out, according to a report released Tuesday by the US Government Accountability Office.

    The whopping figure, which equates to as much as 15% of total unemployment benefits distributed during the pandemic, is a notable bump up from the $60 billion the watchdog agency had previously estimated in January.

    In comments on a draft of the GAO report, the Department of Labor said the office is likely overestimating the actual amount of fraud. However, the department’s Office of Inspector General in February said in testimony before a House committee that at least $191 billion in pandemic unemployment benefits payments could have been improper, with “a significant portion attributable to fraud.”

    The GAO pushed back on the department’s assertions in its report and stood by the methodology used.

    “Given that not all potential fraud will be investigated and adjudicated through judicial or other systems, the full extent of UI fraud during the pandemic will likely never be known with certainty,” the GAO report said. “Therefore, it is appropriate to rely on estimates, such as ours, to make more comprehensive conclusions about the extent of fraud in the UI programs during the pandemic.”

    The findings released on Tuesday shed light on the numerous schemes to steal money from a range of hastily implemented pandemic relief programs, which have drawn the attention of congressional lawmakers and prompted legislative action. Last year, President Joe Biden signed two bipartisan bills into law aimed at holding individuals who commit fraud under pandemic relief programs accountable.

    “My message to those cheats out there is this: You can’t hide. We’re going to find you. We’re going to make you pay back what you stole and hold you accountable under the law,” the president said at the time.

    The House of Representatives also passed a bill in May that would help recover fraudulent unemployment insurance benefits paid out during the pandemic. The bill, however, has not been brought to a vote in the Senate.

    Fraud within the nation’s unemployment system skyrocketed after Congress enacted a historic expansion of the program in March 2020. State unemployment agencies were overwhelmed with record numbers of claims and relaxed some requirements in an effort to get the money out the door quickly to those who had lost their jobs.

    But the enhanced payments and lax controls quickly attracted criminals from around the world. States and Congress subsequently tightened their verification requirements in an attempt to combat the fraud, particularly in the Pandemic Unemployment Assistance program, which allowed freelancers, gig workers and others to collect benefits for the first time.

    More than $888 billion in federal and state unemployment benefits were paid from the end of March 2020 through early September 2021, when all the pandemic enhancements ended nationwide, according to the Labor Department Office of Inspector General.

    The GAO report said the “unprecedented demand for benefits and need to quickly implement the new programs increased the risk of fraud.”

    Other pandemic relief programs were also the target of criminals. The GAO in May flagged 3.7 million recipients of Small Business Administration funds as having “warning signs consistent with potential fraud.” The SBA doled out $1 trillion to help small businesses during the pandemic through measures including the Paycheck Protection Program and Covid-19 Economic Injury Disaster Loan program. More than 10 million small businesses were assisted.

    Some of the fraudulent claims have been recouped. States identified $5.3 billion in fraudulent unemployment benefits overpayments and has recovered $1.2 billion, according to the GAO.

    A Justice Department spokesperson told CNN on Tuesday that as of August 30, the department has charged more than 3,000 people for pandemic related fraud.

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