Cleaning Up through Fraud

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It seems like all fraudsters are in search of a way to clean up. In other words, they want the big pay off without doing the work. Today’s Fraud of the Day, courtesy of WIBV-TV, tells the story of a business owner whose circumstances put a new spin on the phrase ‘cleaning up’, when she was found guilty of collecting Medicaid and welfare benefits while owning a cleaning business.

This story is a case of fraud by omission (as is commonly the case). From 2009-2012, the defendant collected $18,000 in Medicaid and welfare benefits while neglecting to tell the Erie County, Ny., Department of Social Services that she made ”six figures” and owned her own business. (Therein lies the fraud.)

In July, the defendant pleaded guilty to third degree welfare fraud and faced seven years in prison. At her sentencing proceedings in October, she expressed sorrow and remorse for defrauding taxpayers and her community. She apologized for her actions and said that she’s looking forward to atonement. The defendant was sentenced to repay the Erie County government, pay an additional $1,000 fine and serve five years of probation. (Despite her occupation in housekeeping, this fraudster will not exit this ordeal with a clean record.?

The taxpayers of Erie County are rightfully getting repaid, and this fraudster had to shutter her business and pay back a hefty sum of money. But, even so, no one in this case cleaned up.

Source: Today’s ”Fraud of the Day” is based on an article titled, ”Hamburg business owner sentenced for welfare fraud,” written by Brittini Smallwood and published by WIVB-TV on October 15, 2015.

The owner of the Cleaning Pixies was sentenced Thursday for defrauding the welfare system.

Rhonda Heinen faced up to seven years behind bars. She was sentenced to five years of probation and received a $1,000 fine.

Heinen pleaded guilty to welfare fraud in July. She admitted that between 2009 to 2012 she didn’t tell Erie County’s Department of Social Services that she owned the Hamburg business and made six figures.

During that time, Heinen received Medicaid and food stamps totaling almost $18,000.

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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.