A retirement planning drama took place recently in a community near Bankrate.com's North Palm Beach office. I thought you might find it interesting.
In response to suspicions by the Social Security Office of the Inspector General, sheriff's deputies dug up the backyard of a modest ranch home in Lake Worth, Fla., and found the bones of a woman who would have been 102 had she been alive. Then they alerted the Marietta, Ohio, police, who arrested the woman's daughter and charged her with defrauding Social Security out of $141,962 by collecting her mom's checks for 14 years.
Theft of government funds carries a statutory maximum possible punishment of up to 10 years in prison, a fine of up to $250,000, a period of supervised release of up to three years and the payment of a $100 special assessment.
The Social Security Administration uncovers about 1,500 of these cases a year. The way many people get caught, according to Jonathan Lasher, a spokesman for the Office of the Inspector General, is a small problem with Medicare: The late loved ones never go to the doctor. While that might be easily overlooked when the dead relative is 65, it is not so easy to understand when the dead person has turned 100.
The other way that Social Security finds out is by fraud reports from family and friends. If you suspect someone is defrauding Social Security, call the fraud hotline at (800) 269-0271. Be prepared to provide as much of this information as you can:
- Name, address, telephone number and Social Security number of the person suspected of fraud. Also include the individual's date and place of birth, father's name and mother's birth name, if known.
- A complete description of the potential fraud incident.
- Your name, address and telephone number.
How big is the total retirement fraud problem? A 2010 report compiled from government audits and reports by the Government Accountability Office, inspectors general and Congress found that more than $1 billion was sent to more than 250,000 dead people over 10 years.
Just ridding the Social Security system of dead weight -- pun intended -- would go a long way toward putting it on a more solid fiscal footing.