Destitute in Diamonds

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45584989 - bank check with house frame and pen on the table

While it has been said that diamonds are a girl’s best friend, one Seattle resident may insist that it’s welfare instead – at least according to today’s Fraud of the Day from KATU.com.

You’ll remember the case; I wrote a commentary on it when the story broke last year: a couple out of Washington was accused of taking welfare and other government benefits while maintaining their residence in a $1.2 million home and jet setting around the globe.

Now, the couple has pleaded guilty. The KATU.com provides a quick reminder of the facts. The defrauding began in 2003, when the man falsely claimed that he was charging his longtime live-in partner and her two children monthly rent. He posed as his partner’s landlord and claimed to not be living in the house with her. He was granted $1,250 from the U.S. Department of Housing and Urban Development as rent payments on behalf of his ”tenant” and submitted a fake eviction notice in order to collect $750 in emergency rent assistance. (I just can’t make this stuff up.)

While staying with her partner, the woman submitted false information about her financial circumstances in order to qualify for food and medical benefits. These programs are only available to people with fewer than $2,000 in assets; this woman conveniently forgot about her life insurance policy (valued at $2,000), a ring worth $12,500, diamond earrings worth $17,000 and certificates of deposit worth over $30,000. (What?? No fancy cars?)

To say the least, this lady had no need for government assistance. Court files confirm that between 1999 and 2011, she collected $84,000 from the Department of Social and Health Services and $60,124 from the Social Security Administration.

Sentencing is scheduled for September. Prosecutors will ask that the couple pay over $261,000 in restitution and $216,441 in civil penalties – and want the judge to impose prison time, as well.

These two individuals may have been living the high life, but they were doing so at the taxpayers’ expense. While that money could have been going to the individuals who truly need it, they were blowing it on international trips. Welfare fraud is not just for those looking to make a few extra bucks; millionaires can be fraudsters too.

Government agencies, especially those that have programs for helping people in need, are at serious risk of welfare fraud. Crosschecking income and granted government assistance is one way to help fight welfare fraudsters from cashing in.

Source: Today’s ”Fraud of the Day” is based on an article entitled ”Washington Welfare Fraud Couple in $1.2 Million Home Pleads Guilty” published by KATU.com on May 18, 2012.

SEATTLE – A Washington couple accused of drawing welfare and other government benefits while living in a $1.2 million home and traveling around the world has pleaded guilty to defrauding the government.

U.S. Attorney Jenny A. Durkan said the couple stole thousands of dollars over a period of years from state and federal benefit programs intended to provide a safety net for the poor and vulnerable.

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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.