FOX43 Reveals: The true cost of welfare fraud

CENTRAL Pa. – Welfare fraud is costing taxpayers hundreds of millions of dollars in Pennsylvania. With new investigative powers, the Office of the State Inspector General (OSIG) is working to keep that money from being incorrectly paid out, in the first place. FOX43 Reveals what’s being done to crack down on welfare fraud.

If Bruce Beemer, the State Inspector General, had to estimate how much money welfare fraud is costing taxpayers, he says it is close to $100 million dollars a year, if you factor in the cases that never get reported. It makes you wonder – is the system too easy to cheat?

“Well, if it is, we’re trying in our agency to make that not the case,” said Beemer.

Beemer has kept a close eye on welfare fraud in the Commonwealth. His office has taken on a number of high-profile investigations.

“An individual, who was renting a house valued in excess of a million dollars, was running a daycare operation where they obtained several hundred thousand dollars in benefits that they were not entitled to,” stated Beemer. “All while paying $9,000 a month in rent.”

In 2017, lawmakers granted new investigative powers to the OSIG, giving the office authority to issue subpoenas, search warrants, and unprecedented access to criminal justice databases. Within that first year, welfare fraud investigators saved the state more than $75 million.

“That would have been $75 million that would have been fraudulently disseminated or should not have gone out and that’s $75 million that the Department of Human Services would not have had,” explained Beemer.

With new, aggressive techniques, investigators are taking a fresh look at an old crime: SNAP trafficking. Beemer tells FOX43 Reveals that they often see people trade their Electronic Benefit Transfer (EBT) cards to feed drug addictions or pay out debt.

The cards collect SNAP benefits –also known as food stamps—and work as debit cards, with an average monthly payout of $125 of taxpayer money. According to the U.S. Department of Agriculture, SNAP fraud nationwide jumped from $367.1 million in 2012 to $592.7 million in 2016—a staggering 61 percent increase.

In York County, welfare fraud cases amounted to $234,000 in the past 18 months. Recovering that money is difficult.

“Often times it’s very difficult, so I would venture to guess that we did not receive the majority of that money back,” said Dave Sunday, York County District Attorney.

However, welfare fraud only makes up a fraction of the cases that the DA’s office handles. There were 32 cases of welfare fraud in 2018, and 18 cases within the first 6 months of 2019.

“When you look at it like that you think ‘well that’s not a lot,’” explained Sunday. “But the problem is, because of so many different types of crimes, and so many different types of people committing those crimes, we have to constantly, constantly try to find the resources to get it done.”

A significant case in York County involves a 25-year-old woman who is accused of receiving $27,759.36 in subsidized daycare, health benefits, and food stamps. According to court documents, she lied about her income and failed to report her live-in boyfriend’s $94,195.05 salary.

“There are people who desperately need this assistance. That’s why it’s there, so I hate to see crimes like this,” expressed Sunday.

A critical crime-fighting tool for fraud investigators – is you – the public. Acting on tips from consumer, investigators collected $11.5 million in restitution for Long-Term Care (LTC) benefit overpayments. LTC is the state’s program that provides nursing home assistance and medical care for seniors or people with disabilities.

RACHEL YONKUNAS: Does it shock you that there are that many people out there who are trying to defraud the system?

BRUCE BEEMER: Well, the key I think for us is trying to let people know that we are out there.

The State Inspector General also investigates allegations of misconduct within state agencies. If you suspect government or welfare fraud, submit a tip online or call their hotline at 1-855-FRAUD-PA (1-855-372-8372).

FOX43 Reveals issues that affect you and your family to keep you informed. Do you have a tip that needs to be investigated? Or documents we should dig into? Send us a confidential news tip at fox43reveals@fox43.com.

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