X-Rated Fraud

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Greed can make a person do some shocking things. Today ‘s “Fraud of the Day” spotlight shines on an Arkansas man who operated a strip club and brothel out of his home while receiving Social Security disability benefits.

The X-rated fraud scheme operated out of the man ‘s Little Rock residence, which was called “The Cat House.” Patrons were charged a $10 admission fee, alcohol was sold, and additional income was earned by renting out a VIP room. The man also took a cut of the daily earnings. (Sometimes, you just can’t make this stuff up.)

At the same time, “The Cat House” owner and operator was receiving Social Security disability benefits because he claimed he was unable to work. As a result of his false claims, the deceptive man received more than $15,000 from the Social Security Administration (SSA).

The 61-year-old man pleaded guilty to making a false statement to the SSA. He was sentenced to 21 months in federal prison to be followed by three years of supervised release. He was also fined $500 and is required to pay $15,208 in restitution to the SSA.

It is interesting to note that the recommended sentence for this type of crime is from 0 to 6 months in prison. The government didn’t like the fact that this criminal exploited multiple women in conjunction with the SSA in order to pocket money he did not deserve. (It looks like “The Cat House” has been shut down. This X-rated fraudster has lost his “VIP” status and is now headed to the Big House where he will be treated like everyone else ,a criminal.)

Source: Today’s “Fraud of the Day” is based on a Department of Justice press release entitled, “Little Rock Man Operating Brothel Out of Home Sent to Prison for Lying to Social Security Administration,” released on January 18, 2017.

LITTLE ROCK‚Christopher R. Thyer, United States Attorney for the Eastern District of Arkansas, and Special Agent in Charge Robert Feldt, of the Social Security Administration, Office of Inspector General, announced today that Gary Lemond Shorter, age 61, of Little Rock, was sentenced to federal prison for making a false statement to the Social Security Administration.

On Wednesday, United States District Judge Kristine G. Baker sentenced Shorter to 21 months’ imprisonment to be followed by three years of supervised release. Judge Baker also imposed a $500 fine and ordered Shorter to pay restitution to Social Security in the amount of $15,208. Shorter was indicted on September 2, 2015, and on April 28, 2016, he pleaded guilty to making a false statement to the Social Security Administration.

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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.