Deceptive Granny

Social Security Cards for identification and retirement USA

Social Security Income (SSI) provides financial assistance to qualified people who are 65 and older, blind or disabled and with limited income and resources. A grandmother from St. Albans Bay, Vermont thought she could get away with Social Security fraud by collecting her grandson’s SSI benefits while he was incarcerated. (This granny was lucky that the punishment for her crime did not require her to share a bunk with her grandson behind bars. That could have been super awkward.)

The Social Security Administration (SSA) is clear on the fact that SSI payments are not payable for the months that a beneficiary is serving time for committing a crime. (The SSA does not have to pay Social Security or SSI benefits after a criminal is released either.)

Today’s Social Security fraud case starts with the fact that the grandson qualified for and began receiving SSI benefits from the government in 2001. Those benefits were paid directly to his grandmother, who happened to be his representative payee. (That means she was responsible for using the SSI benefits in a proper way to take care of him.)

While under his grandmother’s care for about eight years, the grandson committed several serious crimes and was put in prison. (The law states that he was not entitled to receive SSI benefits at any time during his incarceration.) The grandmother neglected to inform the SSA in her annual reports to the government agency that her grandson was behind bars. She continued to falsely claim that she used the SSI benefits to pay for his care. (The fraud article says she used those funds – about $50,000 – for her own benefit. Perhaps she took a few senior citizen cruises, who knows?)

The 64-year-old grandma from St. Albans Bay pleaded guilty to Social Security fraud and was sentenced to two years of probation. She was also ordered to pay back $48,000 in restitution – the amount of SSI benefits she illegally received on behalf of her incarcerated grandson.

Usually, you read about fraud cases involving the younger generation not informing a government agency of a change in status regarding an elderly relative. (Today, it’s the opposite. I guess you could say that the apple (grandson) didn’t fall too far from the tree (grandma).)

Today’s “Fraud of the Day” is based on an article, “Debra Bluto sentenced for social security fraud,” posted on on June 21, 2019.

The United States Attorney for the District of Vermont announced that Debra Bluto, 64, of St. Albans Bay, was sentenced today in United States District Court in Burlington following her guilty plea to a charge that she defrauded the Social Security Administration. Chief U.S. District Judge Geoffrey Crawford sentenced Bluto to two years of probation and ordered her to pay restitution totaling $48,000.

On October 24, a federal grand jury in Rutland returned a four-count indictment charging Bluto
with stealing government funds and making false statements 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.