A Different Kind of Financial Cushion

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Does making the effort to save money really count if that money is stolen? (Objectively speaking, no.) Last January, the New Jersey Attorney General’s office published a press release that detailed how a young man is in trouble with the law after he ”inherited” an illegal 72 year old Social Security account owned by his deceased father.

But why is he in trouble? The father lived a double life for nearly 30 years, leading up to his death, ”as part of a fraudulent scheme he planned for decades to provide for his son.” He spent daylight hours using his real name and working as a welder at the Philadelphia Naval Base. But at nightfall, he assumed the name ”Frank DiCarlo” and worked a second job at a fencing company. It was through that second name and job that he fraudulently applied for, and began accruing Social Security payments, which he continued to receive, illegally, even after his death. (That’s, right, folks. This guy’s retirement/life insurance/savings plan consisted of stealing and stockpiling decades’ worth of Social Security checks.)

But the occurrence of the real Frank DiCarlo’s 100th birthday prompted the Social Security Administration’s routine outreach to beneficiaries of that age. The agency’s inability to locate ”Frank DiCarlo” triggered investigators to trace back decades worth of payments, a road that, eventually, ended with the son. He subsequently pleaded guilty to second-degree theft of property lost, mislaid or delivered under mistake and was sentenced to three years in prison. He also signed a civil consent judgment that requires him to pay back the Social Security Administration almost a quarter of a million dollars in restitution.

So can this tactic actually work, in terms of funding a post-retirement life-of-leisure? (You bet it can.) To put it into perspective, the son collected $243,844 over a 29 year period, from the date of his father’s death in 1984, until he finally was caught in August of 2013. It’s possible that the father stole a million dollars from the government over the course of the entire scam.

Source: Today’s ”Fraud of the Day” is based on, ”Man Sentenced to Prison for Stealing $243,000 by Falsely Collecting His Father’s Social Security Benefits for 29 Years After the Father Died,” a press release published by the New Jersey Attorney General’s office on January 8, 2016.

Acting Attorney General John J. Hoffman announced that a Gloucester County man was sentenced to prison today for stealing more than $243,000 by fraudulently collecting Social Security benefits for his father for 29 years after the father died. The father had worked a second job using a false name and a second Social Security number he obtained in that name. When the father died, the son continued to collect benefits paid in connection with that false identity, for which no death was reported.

The monthly benefit payments for DiCarlo were direct-deposited into a joint bank account in the name of DiCarlo and Severino Jr., which had been set up by the father before his death and which had the son’s Paulsboro residence as the associated mailing address. The elder Severino had assumed the identity of Frank DiCarlo and set up the joint bank account as part of a fraudulent scheme he planned out for decades to provide for his son. The father applied for and received a Social Security number in the name of Frank DiCarlo in 1945. He worked during the day as a welder at the Philadelphia Naval Base under his true name. However, at night, the elder Severino worked a second job under the name Frank DiCarlo at a fencing company in New Jersey, thereby accruing Social Security benefits under that name. Because there was no record of a Frank DiCarlo dying, those benefits continued after Severino Sr.’s death in 1984. Severino Jr. knew of his father’s deception and never informed the SSA that ”DiCarlo” had died. Instead, he fraudulently continued to collect the Social Security benefits.

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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.