The Buck Stops Here

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When it comes to fraud, someone always gets stuck holding the bag. While many people may be involved in a fraudulent scheme, there is usually someone that is ultimately responsible for making it happen. In today’s case, the buck stopped with the chief executive officer (CEO) for the Tampa, Florida-area Hillsborough Association for Retarded Citizens (HARC). He, along with several other employees, committed Social Security fraud by taking advantage of the disabled clients under the organization’s care.

The CEO, who was a well-respected pillar of his community, enjoyed serving people with developmental disabilities such as Alzheimer’s disease and Down Syndrome. The executive was heralded for turning the condition of the organization’s poorly maintained buildings into vibrant group homes, offering multiple programs for the disabled. But, when the organization experienced financial troubles, the CEO turned to those he served to carry out the Social Security scheme.

Because some of the HARC clients were unable to manage their own benefits, the Social Security Administration (SSA) approved certain HARC officials to act as “Representative Payees.” This enabled HARC to receive the clients’ SSA benefits and the designated official was supposed to complete annual forms related to each client who received the government benefits. (They had to fill out basic information including expenses for food and housing, other goods, and the amount of money deposited into savings.) Also, if a client’s savings exceeded $2,000, they were at risk for losing their need-based Supplemental Security Income (SSI). To prevent this from happening, HARC took the excess money and deposited it into an endowment account.

The HARC’s chief accountant was the mastermind behind the Social Security scheme and during testimony at the CEO’s trial, he admitted to falsifying numbers on a spreadsheet that tracked each client’s contribution to HARC’s endowment fund. When the organization fell on financial hard times, money from the endowment account was used to pay for operating expenses. (The clients’ funds were also used to boost the salaries of the chief accountant and the CEO. And, let’s not forget that the two also received an $1,800-a-month car allowance.)

At one point, the Agency for Persons with Disabilities questioned HARC’s use of the endowment fund. At that point, the CEO instructed the accountant and another employee to have clients sign “pooled trust agreements,” which were documents that made the financial arrangement appear legal. (Since most of the clients had major mental disabilities, they really didn’t know what they were signing.)

The 70-year-old former CEO, who used to be admired in his community, was sentenced to five years in prison – the longest sentence allowed for this type of Social Security fraud – for stealing from the people he served, as well as the SSA. The fraudster must also pay $657,635 in joint restitution with the accountant, who was a key witness at the CEO’s trial. The former accountant previously pleaded guilty and was sentenced to two years in prison. In addition, the organization’s former CFO and finance manager previously pleaded guilty to related charges as well. They each were sentenced to five years of probation.

To his credit, the defendant accepted full responsibility for the fraud that took place under his tenure. He expressed remorse and hoped that his victims and their families could forgive him. The CEO’s wife also expressed that because of her health problems, she was concerned she would not be able to take care of herself without his assistance. (The judge simply explained that he was not taking her husband away. It was her husband that had taken himself away.)

Congratulations to the government investigators who stopped any additional Social Security bucks from being stolen by the Florida-based CEO, who lost sight of his mission to protect vulnerable citizens.

Today’s “Fraud of the Day” is based on an article entitled, Ex-HARC boss Richard Lilliston gets five years for role in diverting Social Security from disabled clientspublished by the Tampa Bay Times on September 18, 2017.

TAMPA — Richard Lilliston used to be admired. Now, old friends shun him. In the years when he ran a Hillsborough County agency for the mentally disabled, he enjoyed a reputation as a man who dedicated his life to serving those less fortunate.

But on Monday, a federal judge sent the 70-year-old Lilliston to prison for the longest term possible — five years — for taking advantage of those very same people and stealing from the government in the process.

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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.