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Erie County investigators find millions in welfare fraud and overpayments

Special Investigator Robert Rooney sat in his car one recent morning reviewing his case sheet, organizing his affidavit forms and punching addresses into his GPS.

Welcome to the front lines of welfare fraud investigations.

His assignments: Find out whether one public assistance recipient was secretly collecting rent from city properties he owned, discover whether another who claimed to be homeless really was, and learn if two women who claimed to be single mothers living alone were living with a spouse or the father of one of their children.

It was a morning of home visits and knocking hard on doors.

"Sometimes you strike out," he said, "and you strike out all day long."

But Rooney and others in the Erie County Special Investigations Division prove plenty of cases.

The county finds more than 3,000 cases every year in which people take Social Services benefits they are not eligible to receive. And thousands more cases still await review.

A Buffalo News look at department data shows 6.5 percent of the 259,502 food stamp, Medicaid and welfare cases last year involved fraud or other benefit overpayments.

That figures does not include 2,000 other cases in which individuals attempt to qualify for benefits with false information. Investigators kill those applications from the start.

Among the bigger fraud cases last year:

  • A suburban couple claimed $11,000 in food stamps even as they collected cash from their tenants in rental properties.
  • A Buffalo woman claimed $32,000 in Medicaid benefits by concealing her marriage to a man drawing disability and dependent child benefits.
  • Another woman received nearly $12,000 in temporary assistance and $2,000 in food stamps by not reporting her income as a part-time hotel housekeeper for six years.

Social Services benefits are a safety net covering medical treatment, nutrition and living expenses for poor residents. While the vast majority of recipients abide by the rules, overpayments can result from inadvertent oversights.

But some recipients lie, hide information and even forge pay stubs.

In 2016, the division uncovered a record 3,886 cases that paid more than $5.1 million in benefits to ineligible recipients. Over the past seven years, the unit has uncovered more than 23,000 cases of fraud and other overpayments.

The average amount overpaid is about $1,350, Provenzo said.

Erie County employs about 50 full-time investigators, overpayment assessors, collectors and support staff to review suspicious cases reported by welfare examiners or the public, and recover money.

"I often refer to this unit as the watchdogs," said Craig Provenzo, director of investigations unit.

Investigations 101

At 8:56 a.m. on a recent morning, Rooney arrived at the first of several properties where investigators believed a benefits recipient collected unreported rent. The first house near Broadway and Jefferson Avenue on the East Side was boarded up. At a second property a mile away, Rooney suspected the first floor of the double might be occupied.

After writing down the license plate numbers of the cars out front, he took note of the boarded-up windows on the second floor, then gingerly tread on the supporting joists of the worn wooden steps. He loudly knocked until a sleepy, shirtless man answered, a blanket wrapped around his hips.

Yes, the man said in halting English, he's a renter. He had been living in the apartment for about a year. Confused by the questions, the renter offered to put Rooney in touch with his landlord. No need, Rooney said. The language barrier made it impossible to take a statement.

Rooney left the man his card and asked that he call him at the office, where he can offer translation services. He jotted down notes in the case file, then headed to his next stop.

A case file reaches the desk of an investigator one of two ways. The case may be red-flagged by a welfare examiner after interviewing a benefits recipient. Or a member of the public calls in a tip.

Most successful investigations involve public cooperation, Provenzo said. Receiving detailed tips and sworn witness statements often makes the difference between cases that are aggressively investigated and resolved, and those that languish.

"We welcome anything the public has to offer," Provenzo said.

Information about off-the-books employment, living off of loans or gifts from family, or other new information inconsistent with what's already in the system can trigger investigations. Sometimes, it just takes a hunch.

Provenzo recalled a case years ago in which an applicant provided an income verification letter from an employer. But the letter repeatedly misspelled the word "regards" as "regurds." He drove out to the employer on Fillmore Avenue and discovered the letter and signature were fake.

Flagged cases usually land first with the overpayment assessment team.

The Special Investigations Division employs 15 such staffers who research and calculate overpayments. These assessors rely on an arsenal of tools, said Senior Special Investigator Cathy Burke.

They and other investigators access state income and Social Security databases. They try to verify a person's living arrangements and household dependents by checking with the U.S. Postal Service, state Department of Motor Vehicles, local utilities, and schools and day cares. They subpoena bank information and review birth, marriage and divorce records. They can also check property and subsidized housing records.

Tougher cases get forwarded to a field investigator for more legwork. This is particularly true when someone calls the Social Services tip line with information about a potential fraud case that may span years and has not been flagged during routine benefit recertification interviews.

Legwork

At 9:52 a.m., Rooney stopped his car half a block away from the South Buffalo address where Social Services suspected a woman claiming to be single was living with her boyfriend. For safety reasons, Rooney never pulls into driveways or stops directly in front of the house he's visiting.

He got no answer at the door of the old double with dark aluminum siding. Stepping around empty Family Dollar shopping carts in the driveway, he tried the back door. Nothing. He moved onto the neighbor's house. An older resident cracked the door open.

She's lived in her house for 25 years but said she has no idea who lives next to her.

"I don't want to get in the middle of this," she said before closing the door.

Field investigators interview neighbors, relatives, landlords, employers or other witnesses. They may even conduct surveillance to see if a recipient leaves for work each day or lives with someone.

Investigators also uncover business fraud. In recent years, investigators exposed a Lovejoy minimart owner who illegally traded cash for food stamps and a Hamburg woman who claimed Medicaid and food stamp benefits despite running a cleaning company.

Burke recalled a case in which a day care owner submitted hundreds of fake day care subsidy claims for phantom children. He illegally collected $80,000 in day care subsidies and wound up selling his home to pay back the debt, she said.

The county employs 14 field investigators. Four of them investigate new benefit applications. That leaves 10 others to investigate all other potential fraud cases.

Cohabitation cases can be the most difficult, said Rooney, 37, a former math teacher who has worked as an investigator for nearly seven years.

"Really, what you're looking for is an unbiased person," he said. "Often, it's the landlord."

In the South Buffalo cohabitation case, Rooney said, he'd already spoken with the landlord who knew about his tenant's boyfriend. But the man traveled a lot and probably wasn't living with his tenant, the landlord said. That might be true. It might not. Landlords don't always have incentive to help, especially if an unreported income helps a tenant make rent.

The most cooperative landlords are those whose tenants have moved and trashed the place on the way out.

Getting the money back

Sometimes, innocent mistakes lead to overpayments.

A family may qualify for benefits, but then an adult family member gets a job or raise that makes them ineligible. They may not disclose the information until their benefit recertification hearing a year later.

"Those folks are not going to be prosecuted," Provenzo said.

But if the investigations unit shows through a "preponderance of evidence" that a recipient deliberately concealed information or lied, his or her benefits can be suspended for six months or longer. This happens in about 250 cases a year.

Top 5 Erie County welfare fraud cases of 2017

When overpayment cases are found, the county's priority is to get the money back.

Collecting money becomes challenging when the people who owe money don't have any. Though people who are criminally prosecuted are more faithful with repayments, most others placed on monthly installment plans fail to follow through on their original agreements, Provenzo said.

Even so, millions of dollars in repayments flow back to Erie County each year – including more than $4 million in 2017.

When debtors ignore bills, collectors work with the Erie County Sheriff's Office to garnish wages. The county is also free to dock other future government and Social Services benefits. Last year, the Special Investigations Division garnished $966,000 in wages, Provenzo said.

Proving a crime

At 10:29 a.m., Rooney pulled up near a light-colored Victorian with a peeling roof in South Buffalo. He was investigating a young woman receiving food stamps. When she first applied, she was disqualified after telling Social Services she was living with her parents. She then reapplied claiming to be homeless.

Rooney walked up to her parent's house to find out who was home. Nobody answered. He started checking with neighbors and spotted one pulling into his driveway.

When Rooney introduced himself, the man assumed he was from Child Protective Services and launched into a story about how the young woman in question let her toddler wander out into the street alone last year. Rooney told the man he wasn't with CPS but still took notes. Then the neighbor invited Rooney into his upper apartment to chat with his wife.

They were happy to share what they knew – up to a point. Rooney carried a waiver release form and two types of affidavit forms in case someone was willing to be a named witness, but it was a tough sell.

"I don't want to put my name to anything," the man said.

Proving that individuals improperly received welfare benefits is one thing. Proving they were deliberately gaming the system is something else.

The difficulty in obtaining proof helps explain why of out of 3,100 benefit overpayment cases last year, only about 10 percent resulted in sanctions or criminal prosecution.

To be criminally prosecuted, county investigators must prove to the District Attorney's Office that an offender illegally received at least $2,000 in benefits. And they must prove their case "beyond a reasonable doubt."

Only 1 percent of overpayment cases last year were criminally prosecuted, and none resulted in felony convictions.

The District Attorney's Office pursued 39 cases of welfare fraud, resulting in about $60,000 in restitution. Defendants pleaded to misdemeanors with no jail time and conditional discharges. Cases included individuals who forged paychecks, pretended to be unemployed, or hid the fact they lived with another wage earner.

District Attorney John Flynn said the majority of the cases involved single mothers who are first-time offenders, mostly abusing food stamps. The offenders were required to make restitution through repayment plans. Those convicted of benefits fraud are banned from receiving the benefit for a year or longer.

Barring extraordinary circumstances, he said, "no judge is ever going to put them in jail." He pointed out that many white-collar embezzlers who steal far more money don't get jail time either.

Forcing poor single parents to take felonies makes it harder for them to get jobs and ensures they'll wind up on welfare for life, he said.

"It's easy to pound your chest and say this person stole a lot of money from the county, and taxpayers need justice, and I agree with that," Flynn said. "But you have to analyze the long-term consequences of the punishments you give them."

Need public help

It was 11:38 a.m., the last stop of the morning. Rooney pulled into a low-income apartment complex in Amherst to investigate another "cohab" case, this time a single parent suspected of living with her fiance. Rooney knocked on the doors of five neighbors. One invited Rooney in. She invited him to sit, but for safety reasons, Rooney remained standing.

The neighbor thought she knew the woman Rooney asked about. Her daughter and the woman's daughter sometimes played together. But she wasn't sure about any man living with the woman.

"I work all the time," she tells him. "I don't see anyone."

Rooney checked the mailbox to see if any names were listed. No luck.

Without a willing citizen to identify a benefits abuser, a case risks coming to a dead end.

"We catch a lot of it," Provenzo said. "We don't catch all of it."

As of the end of February, in-house investigators faced a backlog of 3,258 overpayment cases, while field investigators were backed up with 477 cases.

Public tips help, but many aren't aware the investigations unit exists. Even when tips are called in, they are often made anonymously, limiting the ability for investigators to follow up.

Still, a reliable source providing a detailed tip can help Erie County crack jackpot cases. The biggest cases prosecuted by the Special Investigations Division and District Attorney's office last year were sparked by public tips, exposing frauds that spanned multiple years.

For that reason, county officials urge citizens who suspect welfare fraud to call the Social Services tip line at 858-1886 or file a report online. They also urge people willing to give a report to leave a phone number so investigators can follow up. Tips with contact information are prioritized over anonymous calls without them.

But no tip is completely ignored unless a case has previously been investigated and closed, Provenzo said.

During Rooney's years as an investigator, he's heard some whopper tales. But he's not jaded. He's seen enough to know some people need all the help they can get.

"There's some good stuff, too," he said, "like when you show up, and everyone is telling the truth."

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