Last Hurrah

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41664067 - senior woman using a walker

The Social Security Death Master File (SSDMF) website explicitly mentions that access is restricted to only users who are certified. A Fort Pierce, Florida fraudster, who was definitely not qualified to have access, somehow tapped into the file that contains over 86 million personal records, including Social Security number, name, date of birth and date of death. (An identity thief could cause a lot of damage with that type and amount of personal information.) Today’s fraudster committed more than $1.6 million in Medicare fraud by stealing and using the identities of several physicians.

All it took for the Florida fraudster to carry out his ruse was the stolen identities of six retired and semi-retired senior citizen physicians and their Medicare account numbers, which were used to submit bogus claims. By using fake passports, driver’s licenses and other documents to set up bank accounts, mailing addresses and phone-answering services in the victimized physicians’ names, it gave the appearance that the physicians were actively working and providing medical care to senior citizens around the country.

By mining the SSDMF, the fraudster combined the personal information of people who had recently died with information about the older physicians. (I wonder how he qualified for access to the file.) Then, he filed fake medical claims using the victim doctors’ identities with Medicare and private plans over about five-and-a-half years. (The insurance plans sent around $1.6 million in payments directly to the fake physician bank accounts established by the fraudster.) So, as you might guess, the physician victims were quite surprised when they received bills from the Internal Revenue Service (IRS) for unpaid taxes and requests for repayment of the fraudulent claims.

At this point, it’s important to note that the Fort Pierce fraudster had previously been convicted of Medicaid fraud in Florida in 1999. And, while on probation for that offense, he also committed healthcare fraud in New Jersey and Pennsylvania. (As if that were not enough, he committed mortgage fraud while those cases were moving through the courts.) Around that time, he headed to Chile for about two years with $19,000 until he had to return to the U.S. because his visa was expiring.

His last hurrah before getting caught involved using a fake passport to set up a bank account in West Palm Beach, Florida. The cops were called in when a bank employee thought the passport looked fake. (Unlucky for the fraudster, the cops searched his car and found a SSDMF DVD file containing more than 90 million death records. Oops! Next time, leave that behind.)

While originally charged on 28 counts, the Fort Pierce, Florida fraudster negotiated an agreement where he pleaded guilty to one count of healthcare fraud, one count of making false statements and one count of aggravated identity theft. The maximum penalty of 269 years in prison and $7 million in files was reduced to 13 years and four months in jail, three years of supervised release and restitution of $1,665,348 paid to the victims. (In this case, it was the government that actually had the last hurrah and the last laugh as well.)

Today’s “Fraud of the Day” is based on an article entitled, Judge Sentences Man Who Used Death File to Bilk Health Plans,” posted on ThinkAdvisor.com on November 1, 2017.

A man from Port St. Lucie, Florida, may go to prison for a scheme that involved use of the Social Security Death Master File to create fake medical claims, officials say.

A judge at the U.S. District Court for the Southern District of Florida has sentenced the man, Miguel de Paula Arias, to 161 months in prison, and three years of supervised release, for violating federal benefits laws. The judge has also ordered Arias to pay about $1.7 million in restitution to the victims, according to officials at the U.S. Department of Labor’s Employee Benefits Security Administration (EBSA) unit and at the U.S. Department of Justice.

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Larry Benson
Larry Benson is currently the Director of Strategic Alliances for Revenue Discovery and Recovery at LexisNexis Risk Solutions. In this role, Benson is responsible for developing partnerships for the tax and revenue and child support enforcement verticals. He focuses on embedded companies that have a need for third-party analytics to enhance their current offerings.