[House Hearing, 113 Congress]
[From the U.S. Government Publishing Office]
SOCIAL SECURITY DISABILITY FRAUD
CONSPIRACY IN PUERTO RICO
=======================================================================
HEARING
before the
SUBCOMMITTEE ON SOCIAL SECURITY
of the
COMMITTEE ON WAYS AND MEANS
U.S. HOUSE OF REPRESENTATIVES
ONE HUNDRED THIRTEENTH CONGRESS
FIRST SESSION
__________
SEPTEMBER 19, 2013
__________
Serial No. 113-SS8
__________
Printed for the use of the Committee on Ways and Means
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COMMITTEE ON WAYS AND MEANS
DAVE CAMP, Michigan, Chairman
SAM JOHNSON, Texas SANDER M. LEVIN, Michigan
KEVIN BRADY, Texas CHARLES B. RANGEL, New York
PAUL RYAN, Wisconsin JIM McDERMOTT, Washington
DEVIN NUNES, California JOHN LEWIS, Georgia
PATRICK J. TIBERI, Ohio RICHARD E. NEAL, Massachusetts
DAVID G. REICHERT, Washington XAVIER BECERRA, California
CHARLES W. BOUSTANY, JR., Louisiana LLOYD DOGGETT, Texas
PETER J. ROSKAM, Illinois MIKE THOMPSON, California
JIM GERLACH, Pennsylvania JOHN B. LARSON, Connecticut
TOM PRICE, Georgia EARL BLUMENAUER, Oregon
VERN BUCHANAN, Florida RON KIND, Wisconsin
ADRIAN SMITH, Nebraska BILL PASCRELL, JR., New Jersey
AARON SCHOCK, Illinois JOSEPH CROWLEY, New York
LYNN JENKINS, Kansas ALLYSON SCHWARTZ, Pennsylvania
ERIK PAULSEN, Minnesota DANNY DAVIS, Illinois
KENNY MARCHANT, Texas LINDA SANCHEZ, California
DIANE BLACK, Tennessee
TOM REED, New York
TODD YOUNG, Indiana
MIKE KELLY, Pennsylvania
TIM GRIFFIN, Arkansas
JIM RENACCI, Ohio
Jennifer M. Safavian, Staff Director and General Counsel
Janice Mays, Minority Chief Counsel
______
SUBCOMMITTEE ON SOCIAL SECURITY
SAM JOHNSON., Texas, Chairman
PATRICK J. TIBERI, Ohio XAVIER BECERRA, California
TIM GRIFFIN, Arkansas LLOYD DOGGETT, Texas
JIM RENACCI, Ohio MIKE THOMPSON, California
AARON SCHOCK, Illinois ALLYSON SCHWARTZ, Pennsylvania
MIKE KELLY, Pennsylvania
KEVIN BRADY, Texas
C O N T E N T S
__________
Page
Advisory of September 19, 2013 announcing the hearing............ 2
WITNESSES
The Honorable Patrick P. O'Carroll Jr., Inspector General,
accompanied by the Honorable Paul C. Lillios, Associate Chief
Administrative Law Judge, Social Security Administration....... 8
Beatrice M. Disman, Regional Commissioner, New York Region,
Social Security Administration, New York, New York............. 17
QUESTIONS FOR THE RECORD
The Honorable Sam Johnson........................................ 48
SOCIAL SECURITY DISABILITY FRAUD
CONSPIRACY IN PUERTO RICO
----------
THURSDAY, SEPTEMBER 19, 2013
U.S. House of Representatives,
Committee on Ways and Means,
Subcommittee on Social Security,
Washington, DC.
The subcommittee met, pursuant to call, at 2:30 p.m., in
Room B-318, Rayburn House Office Building, the Honorable Sam
Johnson [chairman of the subcommittee] presiding.
[The advisory of the hearing follows:]
HEARING ADVISORY
FROM THE COMMITTEE ON WAYS AND MEANS
Chairman Johnson Announces Hearing on Social Security Disability Fraud
Conspiracy in Puerto Rico
Washington, Sep 2013
U.S. Congressman Sam Johnson (R-TX), Chairman of the House
Committee on Ways and Means Subcommittee on Social Security, today
announced a hearing on the Social Security Disability Insurance fraud
conspiracy in Puerto Rico. The hearing will take place on Thursday,
September 19, 2013, in B-318 Rayburn House Office Building beginning at
2:30 p.m.
In view of the limited time available to hear witnesses, oral
testimony at this hearing will be from invited witnesses only. However,
any individual or organization not scheduled for an oral appearance may
submit a written statement for consideration by the Subcommittee and
for inclusion in the printed record of the hearing.
BACKGROUND:
On August 21, 2013, the United States Attorney for the District of
Puerto Rico announced that a Federal Grand Jury in the District of
Puerto Rico issued over 70 indictments charging three doctors, one non-
attorney representative (a former Social Security employee), and 71
Social Security claimants with fraud in the Social Security Disability
Insurance (SSDI) program in Puerto Rico.
Under the alleged scheme, the non-attorney representative would
help a claimant file an SSDI application and, with the assistance of a
conspiring doctor, provide fraudulent medical evidence that would
result in benefits for individuals who did not, in fact, meet the legal
eligibility standard for disability benefits. The representative would
collect a fee from the claimant of 25 percent of any past-due benefits
owed (up to a limit of $6,000). The doctors involved would be paid $150
to $500 by the claimant for their submission of false reports to the
SSA.
The multi-year investigation began when disability medical
consultants in the Puerto Rico Disability Determination Services
noticed and reported a suspicious pattern of benefit claims involving
nearly identical medical evidence. As a result, the SSA and the SSA
Office of Inspector General (OIG) conducted an extensive analysis of
medical source documentation in SSDI files. The SSA OIG was joined in
the investigation by the Federal Bureau of Investigation San Juan
Office and the Puerto Rico Police Department, and included numerous
interviews and surveillances.
As a result of the federal indictments, the SSA was able to
immediately suspend benefits to the indicted beneficiaries and has
initiated internal reviews of over 6,000 files of beneficiaries that
included evidence provided by one or more of the indicted physicians or
the indicted representative. During the internal review, should the
remaining evidence not substantiate the disability finding, benefits
will be suspended and the beneficiary must submit evidence to
substantiate the disability. Should a beneficiary be unable to
substantiate their disability without additional evidence, his or her
benefits will be terminated after proper notice and they will be
required to repay the Social Security Trust Fund for the benefits they
improperly received.
The responsibility for making initial disability determinations is
shared by the States and the SSA. All 50 States, plus the District of
Columbia and Puerto Rico, maintain fully federally-funded agencies,
known as Disability Determination Services, which decide initial and
continuing eligibility for benefits under rules established by the SSA.
According to the SSA OIG, approximately 185,000 disabled workers in
Puerto Rico and their eligible dependents receive about $2.4 million in
SSDI benefits each year.
According to the Congressional Budget Office, 10.9 million
beneficiaries received $135 billion in SSDI benefits in fiscal year
2012. According to the 2013 Social Security Trustees report, SSDI
program revenues will only be able to finance 80 percent of benefits
beginning in 2016, unless Congress acts.
In announcing the hearing, Social Security Subcommittee Chairman
Sam Johnson (R-TX) said, ``The widespread disability fraud uncovered in
Puerto Rico raises serious questions about Social Security's management
of the disability program. At a time when the Disability Insurance
program will be unable to pay full benefits beginning in 2016, it is
deeply troubling that Social Security is doling out millions of dollars
in fraudulent taxpayer-funded payments. Americans deserve answers. On
behalf of the American taxpayer, I am committed to getting the answers
and rooting out waste, fraud and abuse so that we can help keep the
program strong for those who truly need it.''
FOCUS OF THE HEARING:
The hearing will examine the investigation in Puerto Rico resulting
in the arrest and indictment of individuals for Social Security
disability fraud, Social Security's oversight of the SSDI program in
Puerto Rico, and Social Security's overall efforts to detect, prevent
and prosecute fraud.
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Chairman JOHNSON. The hearing will come to order.
This is the first subcommittee hearing since the passing of
my friend and former subcommittee chairman Clay Shaw. We all
remember him. Clay was one of the best, a great American, a
diplomat, and a joy to work with regardless of your politics. I
sat right next to Clay as he led the subcommittee during the
106th, 107th and 108th Congresses.
Through his leadership the committee achieved a number of
legislative accomplishments for America and its people. Chief
among them were the Seniors Freedom to Work Act of 1999, which
repealed the retirement earnings penalty for individuals who
attained their full retirement age; the Ticket to Work and Work
Incentives Improvement Act of 1999 to help those receiving
disability benefits to return to work; and the Social Security
Protection Act of 2003 to protect vulnerable Social Security
recipients from representative payees who misused benefits and
other program protections, including withholding benefits from
fugitive felons and parole violators. I guess that is similar
to what we are going to talk about today.
Chairman Shaw believed in Social Security and worked
tirelessly to secure its future by authoring legislation to
keep the Social Security promise, protect Social Security
finances, and enhance Social Security benefits for women.
Clay's instincts were to be bipartisan if possible and a
gentleman legislator always. He joined efforts with then-Ways
and Means Chairman Bill Archer in developing and promoting
legislation to save Social Security for 75 years and beyond,
the Social Security Guarantee Plus Act, a bill his Florida
constituents and even some Democrats found thoughtful and
possible. He was one of the earliest Members of Congress to
lead the fight to protect Social Security numbers.
Our hearts go out to Clay's beloved wife Emilee and his
family, and I ask that we bow our heads for a moment of silence
to honor our former Chairman.
[Moment of silence.]
Chairman JOHNSON. Thank you. I appreciate that.
You knew him, too.
Mr. BECERRA. I did, Mr. Chairman. If I may say a word?
Chairman JOHNSON. You may.
Mr. BECERRA. Mr. Chairman, if I may associate myself with
every single word that you just uttered with regard to our
colleague and friend Mr. Shaw. There are people who understand
this institution and who work hard to try to make it work. Mr.
Shaw was one of those individuals. He would reach out to his
friends, Republican and Democrat alike.
It is tough when you hear about a colleague who passes on
because you think that you never quite grow that old, and you
still remember those memories, and it is almost as if it was
yesterday that Clay was here with us. So I join you in
remembering a dear colleague and friend, and I hope that we are
able to see this House continue to make progress on behalf of
people like Clay Shaw, who gave quite a bit of his life and his
hard work to make it work.
So with that, Mr. Chairman, I thank you for yielding some
time.
Chairman JOHNSON. Thank you. I appreciate your comments.
We now turn our hearing to Social Security disability fraud
conspiracy in Puerto Rico. On August 21st, the United States
Attorney for the District of Puerto Rico announced the arrest
and indictment of 75 individuals for Social Security fraud. Let
me repeat that number. Seventy-five arrested for allegedly
seeking to defraud Social Security. So we are not talking about
a few bad apples here. Those arrested include a claimant
representative who was a former Social Security employee, three
physicians, and 71 beneficiaries. My understanding is that the
investigation is ongoing, and there could be additional
arrests.
Under the alleged scheme, the former Social Security worker
would help a claimant file an application for disability
benefits and, with the assistance of a conspiring doctor,
provide fraudulent medical evidence that would result in
taxpayer-funded benefits that should never have been paid in
the first place. The representative would collect a fee from
the claimant of 25 percent of any past-due benefits owed up to
a cap of $6,000. The doctors would receive a kickback of $150
to $500 by the claimant for their submission of false reports
to Social Security.
The investigation began back in November 2009 after medical
consultants in the Puerto Rico Disability Determination
Services reported a suspicious pattern of benefit claims
involving nearly identical medical evidence. Social Security
and the Office of the Inspector General then began an extensive
review of the medical information. Later the FBI and the Puerto
Rico Police Department joined the investigation.
Social Security has now suspended benefits claimed by the
indicted beneficiaries. It has also begun reviewing the files
of over 6,000 beneficiaries that included medical evidence from
the indicted physicians or representative. Unless beneficiaries
are able to prove their disability with nontainted medical
information, they will be required to pay back to Social
Security the benefits they should not have received in the
first place.
So the bottom line is that at a time when the Disability
Insurance program will be unable to pay full benefits beginning
in 2016, Social Security has been doling out millions of
dollars in fraudulent taxpayer-funded payments. This is
unacceptable. And on the heels of the Puerto Rico case, GAO
reported last week that Social Security paid $1.3 billion in
overpayments to disability beneficiaries. Moreover, the debt
owed to the Disability Insurance Trust Fund from those who need
to pay back overpayments is now $6 billion. In this particular
case, the problem occurred before beneficiaries even got their
first check, so they may have been awarded benefits when they
shouldn't have, all because Social Security's enforcement
operations doesn't generate earnings alerts in all cases when
earnings occur during the 5-month waiting period. In other
words, in my view, Social Security wasn't doing its job.
The Puerto Rico case along with GAO's report raises serious
and troubling questions about Social Security's management of
the disability program. The American taxpayer is right to
wonder whether Social Security is fully committed to rooting
out waste, fraud and abuse.
Let me be clear that Social Security should not try to
downplay the Puerto Rico case and the GAO's report by spinning
the numbers to try to minimize the loss of taxpayer dollars. To
do so would be an insult to taxpayers. Waste, fraud and abuse
in the Disability Insurance program cheat honest, hard-working
American taxpayers and those who truly need benefits. The best
way to protect the disability program is to prevent waste,
fraud and abuse before it occurs.
The American people want, need and deserve answers. Social
Security's leadership needs to get serious about better
protecting this program paid for by America's hard-working wage
earners.
Chairman JOHNSON. I now will recognize our ranking member
Mr. Becerra for his opening statement.
Mr. BECERRA. Mr. Chairman, thank you very much.
American workers pay for Social Security, and we owe it to
them to protect their investments by preventing fraud and
stopping it where we can. Every month over 160 million American
workers contribute part of their hard-earned paychecks to
Social Security to prepare for retirement and to protect
themselves and their families.
To put it in context, over Social Security's lifetime
American workers have contributed $14.5 trillion to Social
Security. During those 78 years, Social Security has
safeguarded those contributions, it has invested surpluses in
U.S. Treasury bonds, and it has paid American families their
benefits on time and in full for 78 years. And in those 78
years today, there are some $2.5 trillion in reserve that has
yet to be used to help cover the future benefits of Americans
who paid into this system. We owe it to Americans, therefore,
to do everything we can to protect their contributions from
those looking to defraud Social Security, while still paying
those honest workers their earned benefits when they need them.
SSA does a good job of fighting fraud, as evidenced by this
successful investigation that we will hear about more. Most
Social Security fraud is reported or prevented by Social
Security Administration employees, as was this conspiracy. It
was frontline employees at the Puerto Rico office who first
detected this conspiracy as part of their work reviewing
benefit applications. They brought it to the attention of SSA's
regional leadership, and a referral was then made to the
inspector general for investigation and potential prosecution.
But SSA didn't stop there. They continued to track the
suspicious cases, subjecting them to additional scrutiny. And
in light of the deepening investigation and the emergence of a
conspiracy, SSA set up a process to quickly rereview all
suspicious cases as soon as the Attorney General filed
indictments. SSA has already suspended benefits to the 71
individual beneficiaries who were indicted on August 16th.
The vast majority of disability insurance recipients are
honest. They are hard-working Americans who became too disabled
to work, and the disability insurance program has grown in
recent years because of demographics and the aging population,
not because of fraud. As Social Security's chief actuary has
testified, the disability program has grown primarily because
there is a larger population, the baby boomers are hitting
their most disability-prone years, and the increase in the
number of women in the workforce. These are factors that have
nothing to do with fraud and that the actuaries have actually
known about and projected for many years.
Finally, I would note for the record that fraud is not a
driver of the growth of the DI program in and of itself. Last
year, in 2012, SSA employees made over 26,000 fraud referrals
to the inspector general, including disability fraud. Of these
the inspector general found that 5,300 cases merited
investigation and, of those, 236 rose to the level of criminal
prosecution; 236 out of 26,000 fraud referrals. That is less
than 1 percent. And that doesn't even say that there was a
conviction. That was a referral for a criminal prosecution.
By the way, of those 236 cases that rose to the level of
criminal prosecution, which represents 236 of the 26,000 fraud
referrals, that is out of the 3.2 million applications that
were received by the Social Security Administration for
disability benefits out of the 57 million people who are in the
Social Security beneficiary population altogether.
So I think it is very clear that SSA is working very hard
to root out fraud, because no one wants to see the hard-earned
benefits of any American used for other than the benefits that
have been earned.
A highly trained, well-staffed SSA is our best defense
against fraud. When SSA's disability examiners noticed this
problem in Puerto Rico and reported it to the IG, SSA had more
staff available to it than they have today. So we have to take
a look. In 2012 reports from Social Security, employees were
responsible for nearly two-thirds of the fraud investigations
opened by the inspector general. They are not coming from the
outside, folks. They are not coming from regular people. They
are coming from the SSA employees themselves who are detecting
this fraud.
Unfortunately, SSA's budget has been cut by about $1
billion a year since 2011, which has had real consequences for
taxpayers, beneficiaries and the workers who are counting on
Social Security in the future. It pains me to say, but this
House has blocked $421 million that the Budget Control Act
provided for SSA to fight waste, fraud and abuse, costing
taxpayers billions of dollars. SSA has lost nearly 11,000
highly trained employees to budget cuts over the past 2 years.
As Ms. Disman says in her testimony, that leaves far fewer
people to ``stand watch over Social Security'' and leaves them
with far less time to document what they see and to report it
to the inspector general.
I am pleased that we have had a chance to come together for
this hearing to see how SSA combats fraud, to learn more about
what happened in this particular conspiracy and whether
additional action is needed. At the same time we must keep in
mind that in the overwhelming majority of cases, there is no
fraud involved.
SSA does a good job overall of detecting and preventing
fraud, and the inspector general aggressively investigates
reports of potential fraud. But without adequate resources, SSA
cannot adequately police fraud while ensuring that individuals
who have earned their benefits get paid on time and in the
right amount.
So we are very much interested in your testimony today, and
with that, Mr. Chairman, I yield back my time.
Chairman JOHNSON. I think as a matter of record it took too
long to get into this. 2009 until today is a long time.
As is customary, any Member is welcome to submit a
statement for the hearing record.
Chairman JOHNSON. Before we move on to our testimony today,
I want to remind our witnesses to please limit your oral
statements to 5 minutes. However, without objection, all the
written testimony will be made part of the hearing record.
We have one witness panel today seated at the table, the
Honorable Patrick O'Carroll, Inspector General, accompanied by
the Honorable Paul Lillios, Associate Chief Administrative Law
Judge, Social Security Administration; and Beatrice Disman,
Regional Commissioner, New York Region, Social Security. You
are the one that has responsibility for Puerto Rico, I guess.
Mr. O'Carroll, welcome and thanks for being here. Please go
ahead with your testimony.
STATEMENT OF THE HONORABLE PATRICK P. O'CARROLL, JR., INSPECTOR
GENERAL, ACCOMPANIED BY THE HONORABLE PAUL C. LILLIOS,
ASSOCIATE CHIEF ADMINISTRATIVE LAW JUDGE, SOCIAL SECURITY
ADMINISTRATION
Mr. O'CARROLL. Good afternoon, Chairman Johnson, Ranking
Member Becerra, and Members of the Subcommittee. It is a
pleasure to be here today to discuss our ongoing criminal
investigation in Puerto Rico.
About 4 weeks ago in the early morning hours, 19 OIG
special agents with 125 FBI special agents and about 150 Puerto
Rico Police Department officers successfully executed 69 arrest
warrants within a few hours. The arrests were meticulously
planned and accomplished without incident.
The arrestees were taken to the Morales Basketball Coliseum
in Guaynabo where the United States Marshals Service was
standing by to process and fingerprint them. They were able to
appear immediately before an on-site United States magistrate.
In addition to the 69 arrested, 6 additional suspects were
arrested or surrendered to authorities in the days that
followed.
These arrests were based on 75 indictments returned by a
grand jury in Puerto Rico. Our investigation had revealed that
these 75 individuals took part in a massive scheme to defraud
Social Security of millions of dollars in disability benefits.
Seventy-one of the arrestees were disability beneficiaries,
three were medical providers, and one was a nonattorney
claimant representative named Samuel Torres Crespo, who was a
former SSA employee.
The scheme was simple enough. Word of mouth was all it
took. Anyone looking to obtain disability benefits
fraudulently, either because they had recently been laid off or
because they saw what they thought was an easy mark, would go
see Torres Crespo. He would, for 25 percent of the claimant's
accrued benefits, put together an application and send the
claimants to one of three of the indicted doctors. The doctor
would charge the claimant a fee between of $125 and $500 to
produce a false medical report, and then the fraudulent claim
would go forward.
Over time, observant disability examiners noticed that
nearly identical medical reports were coming across their
desks, and the OIG was notified. Over a period of months, from
late 2009 to 2010, we received a series of such allegations.
Each was carefully examined, and many required interviews or
video surveillance before a decision could be made whether to
conduct a criminal investigation. Some allegations proved
unfounded, or, more often, the fraud could not be fully
established.
Finally, however, we were able to gain a foothold in early
2011 thanks to an exhaustive review of records, tireless work
by SSA analysts and our agents, and the timely cooperation of
the FBI. Working with the U.S. Attorney for the District of
Puerto Rico, the FBI and the Puerto Rico Police Department, we
conducted scores of interviews, covert surveillances and
undercover visits to doctors' offices. We also executed search
warrants and used other investigative techniques that slowly
revealed the breadth and extent of this complex scheme.
I cannot say enough about the level of cooperation amongst
these agencies. This was truly government and law enforcement
at its finest.
The judicial process in this case will take time to unfold.
Some of these people will likely go to jail. Many will be
required to repay the money they stole, and the government has
already seized about $1.7 million in assets from Torres Crespo.
Meanwhile, this investigation continues, and other
investigations are spinning off from it. Calls to the toll-free
hotline number that we established are generating new leads.
That number, 1-855-777-0821, is being contacted frequently.
Our work in Puerto Rico is far from finished, and Puerto
Rico is by no means the only place where our office is
investigating doctors, lawyers, representatives, interpreters
and others who facilitate disability fraud in large numbers.
This type of fraud has long been a priority of our office. It
was one of the inspirations for the CDI program, with which
this subcommittee is very familiar, and the Puerto Rico CDI
unit is now up and running. It was also the motivation behind
the recent creation of the disability fraud pilot. We
specifically designed this program to detect and investigate
facilitator fraud such as that which we found in Puerto Rico.
Judge Lillios, who is here with me today, will work with
one of our deputy assistant inspector generals for
investigation and audit and investigative staff to mine data,
review past allegations and beat the bushes for leads. They
will also be looking for professionals who have abused the
government's trust as paid participants in the disability
process. Be they doctors, lawyers or representatives, they
should know that we are looking long and hard at similar
schemes.
Of course, we will continue to advise this subcommittee as
this work continues, and as always I appreciate your unflagging
support, and I will be happy to answer any questions.
Chairman JOHNSON. Thank you, sir. I appreciate that
testimony.
[The prepared statement of Mr. O'Carroll follows:]
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
Chairman JOHNSON. Ms. Disman, welcome. Please proceed.
STATEMENT OF BEATRICE DISMAN, REGIONAL COMMISSIONER, NEW YORK
REGION, SOCIAL SECURITY ADMINISTRATION
Ms. DISMAN. Chairman Johnson, Ranking Member Becerra,
Members of the Subcommittee, thank you for this opportunity to
discuss Social Security's role in uncovering the complex
disability fraud conspiracy in Puerto Rico. My name is Bea
Disman. I am Social Security's Regional Commissioner for the
New York Region. I have direct authority over the agency's
operations in New York, New Jersey, Puerto Rico and the U.S.
Virgin Islands. I began my career at Social Security as a field
office employee in 1965. While much has changed since then, the
agency's commitment to service and stewardship has never
wavered.
Like you, I am outraged whenever anyone attempts to defraud
the government. I am especially chagrined that a former Social
Security employee acting as a nonattorney claimant
representative was an integral part of the conspiracy uncovered
in Puerto Rico. This individual betrayed his former colleagues
by violating the public trust, and, frankly, I am incensed by
his actions.
We applaud the recent news that law enforcement officials
indicted the former employee, several physicians, and
approximately 70 disability claimants for allegedly defrauding
the disability program. While the Federal grand jury
investigation continues, evidence suggests that the involved
parties conspired to submit fabricated or exaggerated medical
evidence in order to fraudulently obtain benefits. This
criminal behavior is unconscionable, and we do not tolerate it.
In this case it was the diligent employees of the Puerto
Rico DDS, funded and trained by Social Security, who first
identified the fraudulent medical evidence. The DDS employees
referred the allegation to us in March 2009 during an on-site
visit by my regional office staff and the quality reviewers.
In November 2009, after completing additional analysis and
case development, we referred the allegation along with
information about the nonattorney representative to the Office
of the Inspector General. In addition to referring the case to
the OIG, we took aggressive steps to identify any additional
cases and develop a process for reviewing the cases. These
steps ensured that we could reliably handle any high-volume
review that might result from the investigation.
We directed Federal resources to Puerto Rico to assist in
the investigation, monitor the Puerto Rico DDS operations and
help decide cases. We also redirected and trained staff on
medical issues from our Puerto Rico field offices and our
program service center in New York City. These additional staff
resources were focused on Puerto Rico cases, including those
involved in the investigation.
In addition, we authorized the New Jersey DDS to hire
bilingual disability examiners to assist with Puerto Rico.
Other DDSs, both inside and outside the New York region,
provided workload assistance to the Puerto Rico DDS, which
added more outside eyes to the cases being filed in Puerto
Rico. A sustained, multiyear cross-training effort, as well as
additional quality studies, further strengthened our work with
the Puerto Rico DDS and ensured their quality continued to
remain strong and the fraud identified.
Without question, our antifraud activities in Puerto Rico
worked. They have shown that our frontline employees are the
best defense against fraud. Over the years our emphasis on
their role in the integrity of our programs and
responsibilities for reporting fraud have strengthened our
stewardship focus.
We have suspended over $130,000 in monthly benefits to the
indicted individuals and their auxiliaries. As of today we are
reviewing at least 6,600 disability applications in which we
awarded benefits based in part on the medical evidence supplied
by the doctors. These reviews will occur in New York City and
in New Jersey. In redetermining these cases, we will disregard
the tainted medical evidence. If the remaining evidence does
not support our original allowance, we will suspend the
benefits, providing the opportunity to submit additional
medical evidence prior to a final determination. Beneficiaries
will receive notification if we terminate their benefits and
assess an overpayment.
If we suspect additional fraud of medical providers in any
of these cases we review, we will refer that to the OIG for
investigation and possible referral to the U.S. Attorney. Under
a program we are considering for Puerto Rico based on success
in other regions, our agency's attorneys may pursue cases not
accepted for criminal prosecution by the U.S. attorney.
Looking ahead we know that it is critical that Congress
fully fund our cost-saving program integrity activities while
ensuring we have the resources to serve the deserving
disability applicants who turn to us for help. Investigations
are time-consuming and labor-intensive. In Puerto Rico it
required close coordination between Social Security, the Puerto
Rico DDS, and multiple layers of law enforcement. We need your
support to keep the disability program strong.
Thank you, and I will do my best to answer any questions
you may have, with the understanding that this is still an
active grand jury investigation.
Chairman JOHNSON. Thank you for your testimony. I
appreciate it.
[The prepared statement of Ms. Disman follows:]
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
Chairman JOHNSON. Mr. O'Carroll, let me ask you a quick
question. Has there ever been a case as big as this in the
history of Social Security, in your opinion? Yes or no.
Mr. O'CARROLL. No, there has not been any one as big as
this.
Chairman JOHNSON. Okay. I am glad you and your Acting
Commissioner are convinced that fraud conspiracy is not limited
to Puerto Rico since you have set up disability fraud pilot
programs here in the United States focusing on third-party
facilitators, claimant representatives and medical providers.
It seems like everybody wants some of our money.
Ms. Disman, with respect to the Puerto Rico case, what is
the total amount of fraudulent taxpayer-funded benefits paid
out by Social Security? I expect it will reach millions of
dollars.
Ms. DISMAN. At this point in time, Mr. Chairman, I do not
have that figure because we are rereviewing all these cases,
and our initial review of the 6,600 cases, which we have
already started, shows a number of these people will continue
to receive benefits because there is other medical evidence in
the file even after we remove the tainted evidence. So we will
be able to--after we finish the review be able to tell you what
was involved with the tainted medical evidence and the amount
of the benefits.
Chairman JOHNSON. Well, I know it is Social Security's idea
to get payments out as fast as they can. Do you think we are
doing it too fast without checking what the status of the
claimant is?
Ms. DISMAN. In this situation it shows our frontline
employees did their job and did the checking. What they
uncovered was looking at template medical evidence, and they
didn't stop there. They went ahead and followed the procedures
that we have and the operating procedures that we have trained
them on.
Chairman JOHNSON. Yes, but you already paid them.
Ms. DISMAN. Right, because based on other evaluation of the
medical evidence in file and other factors--remember, this was
fabricated medical evidence--it appeared that these people were
eligible to meet the definition of disability.
Chairman JOHNSON. Do you think our taxpayers will be made
whole? Yes or no.
Ms. DISMAN. I think our taxpayers will be made whole for
those people we determine that are no longer eligible to
receive disability.
Chairman JOHNSON. In other words, all that money that we
put out is going to be paid back?
Ms. DISMAN. We are going to be charging overpayments if
those decisions were based on fabricated medical evidence and
cannot be supported, and they will be required to pay back the
overpayments.
Chairman JOHNSON. How do you go about getting that?
Ms. DISMAN. Well, basically you ask them to pay the money
back. You go through a process that gives them their due
rights. But ultimately there is a request for the money.
Chairman JOHNSON. Okay. And how much is Social Security
spending to deal with this fraud?
Ms. DISMAN. Well, during the review itself we are in the
midst of determining what we will be spending on the review. I
can tell you right now that the medical evidence in Puerto Rico
is in Spanish, so that in order to start this review and to
have it done by people that are not just bilingual and
biliterate, we have had to translate a number of the medical
documents, and that is hard to do because you have to be more
than bilingual, you have to be biliterate in medical. So we
have already spent $3 million in a contract to do the
translation. We are right now factoring all the costs, and I
will provide that for the record as soon as we finish putting
that together.
[Transcript Insert 1 follows:]
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
Chairman JOHNSON. So usted no hable espanol?
Ms. DISMAN. It is not just speaking Spanish, it is reading
complex medical terms. And I do agree with you, because I know
you have spent, Chairman Johnson, some time in Puerto Rico.
Mr. BECERRA. But he is a Texan. He knows everything.
Chairman JOHNSON. Ms. Disman, I want to turn to the
findings of a GAO study released last week on overpayments. It
found that Social Security paid out $1.3 billion in disability
that were wrong mostly because the individuals earned over the
legal limit during the 5-month waiting period before they
received their first check. The problem was simple: Social
Security did not catch the earnings if they occurred the year
before the year benefits were first paid.
Now, this seems like a problem that ought to be able to be
solved by a high school computer student. Why hasn't this been
addressed, and can you give me an assurance it will be, and
when?
Ms. DISMAN. Well, Mr. Chairman, I read the GAO report as
you did, and I have been involved in the enforcement operation
as being Regional Commissioner for years. I can tell you that
the enforcement operation is very complex, and it requires
complicated work by our program service center employees as
well as our field employees.
In reading the GAO report, and also talking to our policy
people, I know that we are going to have to go look behind the
cases because GAO did not do any analysis. If someone has
worked during a waiting period, it may be an unsuccessful work
attempt, there needs to be a look at the cases itself.
However, we agreed to look at those cases. We also agreed
to look at GAO's recommendation, that we take a look at what
the cost would be and the resources for us to obtain this
information during the waiting period, understanding that if we
did this, we may not be able to do something else given our
budgets and what we are dealing with.
Also, there are two proposals in the President's budget to
deal with exactly this issue. One deals with going to a
quarterly wage reporting. You know now it is yearly, so that by
the time the data come to us, enforcement is already late. And
the second is to continue and redelegate our demonstration
authority to go ahead and experiment with different ways of
counting earnings for the disability beneficiaries. And we have
been experimenting with different demonstrations to see if we
can simplify the program and still get at the heart of the
issue of enforcement.
Chairman JOHNSON. Have you been down there yourself?
Ms. DISMAN. Where?
Chairman JOHNSON. Puerto Rico.
Ms. DISMAN. Oh, I have been down to Puerto Rico over the
years. I must admit I go in August when it is 100 degrees. But
having said that, you have very dedicated Social Security
employees in Puerto Rico. They are really dedicated to the
mission. I can tell you that this fraud investigation and this
conspiracy, if you talk to my employees on the frontline, they
are incensed and upset, and a number of them knew the retired
Social Security employee, and they are beside themselves.
Chairman JOHNSON. Well, GAO says it urged Social Security
to use other verification sources since 2004, but you didn't.
In responding to the GAO report, Social Security referred to
the, quote, ``strategic plan goal of preserving the public
trust and improving payment accuracy'' as one of your highest
priorities. Is that true?
Ms. DISMAN. Well, our highest priority is to ensure the
public trust. I take stewardship responsibility personally. I
have over the years been one of the foremost supporters of
antifraud activities within Social Security. As a matter of
fact, the inspector general and I set up antifraud committees
in the regions, which are chaired by both of us.
Chairman JOHNSON. When did you do that?
Ms. DISMAN. We set that up a good 10 years ago that we have
been working on that. We bring in line management. We identify
various trends.
So I will tell you, for a while I was the operations lead
on anti-fraud--I want to say antifraud, not fraud--and I take
this seriously and to heart, because when I was trained as a
claims representative, that motto, we get the right check to
the right person on time, is our foundation.
Chairman JOHNSON. Well, you need to do both, and I am told
that, you know, some people think you are more interested in
cutting checks than trying to prevent fraud, and I hope that is
not true.
How can we believe the agency's statement that payment
accuracy is the highest-step priority when the actions here say
something different?
Ms. DISMAN. Well, Mr. Chairman, I think you can see the
actions here were a complex conspiracy, and if you actually
look at the information of our accuracy of the data of Puerto
Rico, they are equal or better than the national average, and,
you know, we have an independent quality organization that
looks at that.
Chairman JOHNSON. Well, as the New York Regional
Commissioner, you are responsible for overseeing the Puerto
Rico Disability Determination Program; is that correct?
Ms. DISMAN. That is correct.
Chairman JOHNSON. And I would like to get your attention to
the slide, if they can put it up on the screen. I think the
staff gave you a hard copy of that.
Ms. DISMAN. I don't have it, and let me see if I can see
it. I can't see it, but I understand what it is showing.
Chairman JOHNSON. Okay. You understand it just shows that
the allowance rates in Puerto Rico are way above the national
average anywhere else, like double and triple, and it was
pointed out in a Wall Street Journal article from March of
2011, which we will insert in the record without objection.
[The Wall Street Journal article follows:]
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
Chairman JOHNSON. And show the next slide, please.
That table shows the percent of beneficiaries nationwide,
and the percentage of beneficiaries diagnosed with a mental
disorder in Puerto Rico is at least 10 percent higher than the
national average for all years. The percentage with a mood
disorder is more than double the national average. And this is
important since we have been told back problems and affective
disorders, including mood disorders, were alleged by most of
the beneficiaries who were arrested. Assuming you saw both the
award rate and the diagnosis trends when they happened, what
action did you take and when, and what was the result?
Ms. DISMAN. Well, we have taken multiple actions in Puerto
Rico. We have actually had a multipronged approach. We have had
our quality reviewers and my own disability staff visit Puerto
Rico and do extensive training. As a matter of fact, when we
found out about the allegation of the doctors, we were there
training them on the medical documentation of the file, how to
identify suspect medical evidence, going over the risk factors
for fraud and similar faults. Two of the categories in those
risk operations for operations deals with affective disorders
as well as back disorders, going through what the factors are
for them to look at.
We did more than that. We did very special training in July
of 2011 where we brought together the ALJs and our DDS
examiners. We had headquarters, we had our own people from the
region, we had quality, going over again the characteristics of
affective disorders, similar fault, and actually going through
how you deal with the files for inconsistency when you see the
types of trends. We do have very specific operating procedures
for them to follow, and they have continued to do the
referrals.
But I do have to say allowance rates make up a total--a
composite of a number of factors. It is not just what you are
seeing with this conspiracy. It really does depend on the
demographics of a population, it depends on the age, it depends
on the education, it depends on the poverty level that exists,
it depends on the jobs and the economy.
So you can't draw a conclusion just by looking at the
allowance rate, but you have to look behind it. We also asked
for a special study where they did a 1,000-case analysis of
what the Disability Determination Service was doing, and when
they looked at those cases, they also made special referrals to
the OIG, but at the same time they determined that the quality
and accuracy of the decision making was equal to or better than
the national average.
In addition, as I have said before, we have had help from
outside my region as well as within the region. So I really
established eyes and ears to look at these cases to see if we
could pick up any special trends and analysis and continue with
the reporting of fraud.
In addition to that, I have taken my own Federal resources
from my field offices in Puerto Rico, and I could ill afford
it, to devote them to training them on medical decisions and
looking at specific cases.
So I actually looked at, in working with the OIG, cases
from specific areas in Puerto Rico to try to identify patterns.
We would move it to ZIP codes and establish information that
the OIG could use.
Chairman JOHNSON. When did she first inform you of this
effort?
Mr. O'CARROLL. Well, Chairman, we have been working in
conjunction with Regional Commissioner Disman and her office
right from the beginning in 2009 when we heard about this. From
there on we started referring cases to her for review. So we
have been pretty much working united on this thing for the last
few years.
Chairman JOHNSON. Were you satisfied with what the answers
were that you were getting?
Mr. O'CARROLL. Yes. As we keep going with this, it is so
complicated on it, and there are so many different tentacles to
this situation, it has taken a lot of interaction back and
forth and education on the part of our agents in terms of
reviewing files, and I have got to say it has been a very good
cooperation on this one.
Chairman JOHNSON. Well, you know, if the Federal quality
reviewers are saying the decisions are right, either we have
got more fraudulent evidence out there, or we really need to
take a good look at the statute defining disability.
Mr. Becerra, do you wish to question?
Mr. BECERRA. Yes, Mr. Chairman, thank you.
And I think the admonishment that the Chairman just made
is, I think, something all of us would agree with at this dais,
and that is that we have to hunt this stuff down as quickly as
we can. No one wants to see any kind of report of fraud,
because it is what undermines the confidence that the people
have that when they pay these Social Security contributions,
these taxes to Social Security, that they will be used for the
right purposes.
So we appreciate, Ms. Disman, everything that your people
have done, especially the line workers who often times don't
get to be here to explain exactly what they have done. Please
tell them that we appreciate that they were the ones that
detected this, and that we hope they have the resources they
will need to continue to be able to continue to do that. By the
way, I also hope that you are able to keep those experienced
staff, who probably have the knowledge it takes to sort of
understand when something looks a little fishy on those
applications.
So I think you answered the first question I was going to
ask, and that is what are you doing today to try to make sure
you can prevent this type of fraud from occurring again when
the Chairman asked some questions.
So let me ask this: It all seems to hinge on this former
employee who knew how the office operated, who sort of
understood what your reviewers are looking for to determine if
an application passes that bar so that it goes to the next step
of getting closer to being approved.
I agree with you and your line workers that if you could
descend on this guy with every tool you have, we should,
because he breached a trust. He learned the system, and then
once he left and probably took a decent retirement with him, he
still went ahead and shafted the very system that helped him.
Those kind of guys don't even belong behind bars.
Anyway, I would say that what you should do is give us a
sense. There are probably several other people who have learned
the system, understand what your disability reviewers are
looking for, and therefore could tailor this fabricated
evidence to look like they qualify. And unless you are really
good--it is like when Sam, the chairman, and I talk about these
fake IDs that are used to do all sorts of things including
getting employment, an employer looks at this thing, and this
looks like a real Social Security or a real driver's license,
and, lo and behold, it is fake.
How do you get to the point where you can prevent that from
occurring? Because there are a whole bunch of former Social
Security employees who are probably doing great work defending
a lot or representing a lot of future beneficiaries or
beneficiaries today. We don't want to indict everyone who just
happens to have done good work and knows the system, but how do
you make sure that those who know how they might be able to
game the system aren't doing that?
Ms. DISMAN. Well, I have to agree with your comments about
the former employee, and one of the things that I hope is that
this indictment and what has taken place in Puerto Rico serves
as a notice to any former employee and anyone that we will find
the fraud, we will investigate it, and you will face criminal
charges and perhaps imprisonment.
I will tell you we used this opportunity of the indictment
to send out a message throughout Social Security to talk about
what took place, to remind people about reporting it, how to
report it, what to look for, and to continue to do it. How we
really save this--and this hotline that the inspector general
mentioned is bringing in information as to some other
nonattorney reps that may exist. We do not know yet if they are
former employees or just nonattorney reps.
Having said that, I can't say a lot more because there is a
grand jury investigation, but I will tell you that we are
looking very closely at cases. We are trying to come up with
patterns. It takes resources. I can tell you my regional office
that helped do all this analysis and is working with the
inspector general is down 22 percent in the last 3 years.
I have moved resources from doing other work that Social
Security requires to focus on this investigation. And this
investigation will take place, and others, by doing on-the-
ground work, analytical work, hard work. But I do want to send
a message to anyone that is out there: If you commit fraud
against our programs, we will find it, and the Inspector
General will find it, and you will serve the appropriate
sentence.
Mr. BECERRA. Well, I hope you can communicate to the U.S.
attorney who is handling the prosecutions in this case that we
hope that they throw not just the book, but the kitchen sink at
these guys, including the doctors, because the doctors made it
possible for this medical evidence to look real. And this
former employee should be severely punished however the law
allows it, but those doctors as well. Too often these
professionals who abuse their own license to practice get off
very easily, and before you know it, they are out there
practicing again.
I hope you can send a very clear message, especially, Mr.
O'Carroll, as you said, this is the worst case of conspiracy
and fraud that we have seen under SSA, that you will descend on
these individuals as aggressively as you can. And if there is
anything we can do to help by contacting the Department of
Justice or the U.S. attorney to say, we need you to set an
example so you don't have to come and testify in the future
about these kinds of fraud cases, let us know, because this
is--and I think this is a small, minute fraction, but it does
spoil it for all those hard-working Americans who ultimately do
qualify, are truly eligible for the benefit that they have paid
for.
So we urge you to continue to work. We thank you for what
you are doing. And know that you have the support of, I think,
this Congress to try to really go aggressively at any fraud
that may occur out there. And I hope that we heed your guidance
about resources; that you can only do so much and stretch a
dollar so far in trying to get this done. And it is pound
foolish to cut your resources and then find the fraud occurred
because you don't have the personnel available to sort of catch
it, and then have to spend lots of money and a lot of your
personnel resources to now try to go after the bad guys who
defrauded the system.
But thank you very much for being here and for all your
testimony.
Chairman JOHNSON. Thank you, Mr. Becerra.
Mr. Renacci, would you care to question?
Mr. RENACCI. Thank you, Mr. Chairman, and I thank the
witnesses for their testimony.
Ms. Disman, you sound sincere, and I heard you say one of
your mottos was ``right check to the right person,'' and
clearly there was some systematic failures that occurred. So
let's not talk about Puerto Rico as much as maybe you can help
me with your office and other offices in the country.
I guess I am concerned about uniform qualifications for DDS
examiners. Can you tell me the qualifications of the examiners
in the facilities that you oversee? And what I am asking is I
understand some have high school educations, all the way to
graduate school. What is their background and experience,
because these are the frontline people.
Ms. DISMAN. Well, I think to understand it, the DDSs are
State employees or Commonwealth employees, and so they are not
actually employed by Social Security. We pay the freight for
it, the costs of it, and we train them. The States have
different standards as to the qualifications for the employees.
In most places it is a college graduate. For example, in the
State of New York they have even nurses that are already come
up and be disability examiners.
So it varies by State. But we also do a very extensive
disability training program for them. So they are not really
considered proficient for about a 2-year period. They go
through stage training. And we also--they are tested, they are
mentored. So it is a very, very intense program for it.
And, again, qualifications vary, but we have been looking
at this on a national level in Social Security. There has been
a task force looking at what type of standards should we try to
set. And since I am not responsible for policy, there is a task
force working on it, and I can get more information for the
record for you.
Mr. RENACCI. I would appreciate that.
[Transcript Insert 2 follows:]
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
Mr. RENACCI. But you do agree there could be a high school
graduate and a graduate student, and they are making some of
the up-front decisions?
Ms. DISMAN. It could be from high school through graduate
or postgraduate.
Mr. RENACCI. They have the training--you said they have a
2-year training, but they could be making decisions during that
training process, correct?
Ms. DISMAN. They make decisions, but there is a quality
control in the DDSs. There is an internal quality. They don't
function on their own. They also have to pass a number of tests
in order to succeed. So they are not left to their own devices,
because we all collectively know that the medical decision that
they make is a gateway, and we want to make sure that that
medical decision is appropriate.
Mr. RENACCI. Mr. O'Carroll, can you tell me, were video
hearings used in some of the Puerto Rico cases?
Mr. O'CARROLL. Mr. Renacci, no, I am not familiar with
whether videos were used in those hearings.
Mr. RENACCI. Do you know, Ms. Disman?
Ms. DISMAN. I do not know, but I will tell you in looking
at the universe of cases, very few of the 6,600 cases that we
are looking at that are involved actually were made at the ALJ
level. So it is a small amount. It is about 100.
Mr. RENACCI. Do you know how much use we have of video
hearings? Across the country I am talking about.
Ms. DISMAN. Since that is not my area of responsibility, if
I can get the information for the record, I would be glad to
provide it.
[Transcript Insert 3 follows:]
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
Mr. RENACCI. Mr. O'Carroll, do you know? Is there a
backlog, and is there a reason we are using, or how many we are
using? I am just trying to get systematic.
Mr. O'CARROLL. I don't have a number. I will get it to you.
But we have done some work, and we are supportive of it.
Mr. RENACCI. Mr. O'Carroll, can you tell me a little about
the hurdles OIG has to overcome in order to prosecute those
that defraud SSA?
Mr. O'CARROLL. Yes, and this is--probably a good example of
it is that in order to do a prosecution, it requires a lot of
criminal evidence and a lot of background on it. And I guess,
again, in this case here where we had the cooperation of the
U.S. Attorney's Office, and we were working with them, it was
probably a little bit easier than we have it in any other
districts on it in terms of that when we are making our
presentations to U.S. Attorney's Offices, we are kind of in
line with all the other Federal agencies, and oftentimes the
fraud against SSA is usually in smaller amounts of money than
what U.S. Attorney's Offices are looking to do their
prosecutions on.
So I guess the long answer to this thing is that it is very
difficult to get prosecutions when you are competing against,
you know, bank robbers or whatever on it, but we do do a lot.
We use the State, we use local prosecutions as well as Federal,
and we also use civil monetary penalties, again, to assert
fines and penalties on people.
Mr. RENACCI. I would just say in conclusion, and I am
running out of time, that in the private sector--and, of
course, I was in investigations from a CPA standpoint, many
financial institutions--even though one person may have caused
the problem, there are usually systematic issues that allowed
that one person to cause that problem. So I am hoping that we
are looking across the board at all our systems. And I thank
you for your testimony.
I yield back.
Chairman JOHNSON. Mr. Kelly, do you care to question?
Mr. BECERRA. Why don't we just reduce the time for each of
the two so that way we can make sure we make votes.
Chairman JOHNSON. I will give you a minute.
Mr. KELLY. All right. Just very quickly. Thank you.
I think my concern is because when you look at the amount
of money that we are talking about, and are we talking about
very small percentages, but a very small percent on a very
large sum is great. And I think the integrity of the program
always does come down to there are certain people that just
find a way, as Mr. Renacci said, with these systemic
opportunities.
I look at Puerto Rico that has an unemployment somewhere
beyond 13, 14 percent, so they are going to find a way to make
money somewhere or get revenue somewhere. So you look to where
the low-hanging fruit is, and apparently they found a way to
gain revenue.
I know this is tough, and I know you are trying to do an
awful lot of things, but I see you have done a good job of
redeploying some of your funds and looking at prioritizing your
spending, and in a time when things get tough and coming out of
the private sector, sometimes you don't have a choice, you just
have to prioritize. I think what you have done is quite wise,
although the amount of this is staggering.
The chances of us ever getting that money back, slim to
none? I mean, seriously, how much--what is the total amount? I
mean, it runs into the billions, right, in overpayments or
fraudulent payments?
Ms. DISMAN. At this point I cannot tell you that because we
are reviewing our 6,600 cases, and from our initial review of
some of the cases, we just started this review, people have
other medical evidence that would sustain it. So, for example,
I am seeing medical evidence from the Veterans Administration
and other places. So you can't make the assumption because we
identified 6,600 cases that had these medical providers, that
ultimately it was based on that that made the decision.
Mr. KELLY. But in my own business, having dealt with when
you get to the situation of accounts payable and them being
overdue, the longer they are overdue, the less chance you have
of recovering. So the recovery process on this--and we are
talking in the billions of dollars in overpayments; is that
correct?
Ms. DISMAN. I don't think you are talking about billions.
Mr. KELLY. Okay. All right. The chances of getting any of
that money back?
Ms. DISMAN. I think there is a good chance, because we have
a very good debt process. And ultimately, remember, these
people came on our rolls when they age. There is such a thing
called retirement. There is offsets. There is a lot of other
things we can do.
I think the bottom line is we have to finish this rereview
to see how many people really are involved and would no longer
be eligible for benefits. And we intend to take the full action
in recovering these overpayments.
Mr. KELLY. My concern is always that, you know, there is a
way of running out the clock on this stuff, and after a point
the cost of recovery is greater than what you can possibly
recover, because usually the recovery amount is very small.
But I am going to yield back, Mr. Chairman, because we are
running out of time, and I think Mr. Thompson has a question.
Thank you all for being here.
Chairman JOHNSON. Thank you all for your questions.
Mr. Thompson, do you care to question?
Mr. THOMPSON. Thank you, Mr. Chairman, and thank you to all
of you for being here. Just a couple of things.
You had mentioned, ma'am, that there is a policy part of
this, and as you figure out what sort of policy is needed or
needed to be changed, I would hope that you would consider our
subcommittee so we can help facilitate that if any of that has
to be done statutorily.
In regard to getting the money, first, I couldn't agree
more with Mr. Becerra and his comments on the fact that there
is a special place in hell for people who would cheat this
critical system, a system that is important to so many people.
So I would hope that you would take every effort to make sure
that whatever punishment is available, that it is doled out,
because that sends a strong message to other folks. And we have
all seen too many times when people who perpetrate this type of
foul behavior walk. It is not right. So I hope you would do
that.
In regard to getting the money back, I think there is two
kinds of money that we are talking about. There is the money
that was paid out that shouldn't have been paid out, and I
trust that your comments about getting that back, that you are
going to do everything you can. But how about the money that it
is costing us to go after this? You have had to rearrange
priorities. We are spending a lot of dough to track these guys
down, to investigate this. Is there a policy in place that
allows us to go back and capture that?
Ms. DISMAN. Well, I think I would have to yield to that to
the Inspector General since he is involved with the U.S.
attorney on recovery of assets.
Mr. O'CARROLL. Mr. Thompson, in fact we have been in touch
with the U.S. Attorney's Office a number of times over the last
few weeks. But one of the issues that happened when we made the
arrest on, in fact, the former SSA employee was we seized $1.7
million worth of assets from him. Those assets were turned over
to the Justice Department as assets, and eventually what will
happen is that if a judge in the case assesses that he has to
repay money to SSA, SSA can petition Justice Department to get
at those seized assets.
Mr. THOMPSON. But what I am talking about is not just the
money they took inappropriately, but the cost of figuring this
out and trying to get that. Can we get payment for that?
Mr. O'CARROLL. I would like to see a way that we can
penalize them that way, and I think that we can probably put
that before the judge.
Mr. THOMPSON. I think we should look at that. I think that
would be important to do.
Mr. O'CARROLL. We will do that.
Mr. THOMPSON. Thank you.
Chairman JOHNSON. We have got votes going on. Mrs. Black, I
am sorry. Have you got a quick question?
Mrs. BLACK. They can get back to me on this. I am just
curious about when we look at recovery, not in this particular
incident, but in recovery across the board, I am very
interested in what percentage--looking over maybe a 10-year
period, what percentage do we actually recover? And in that I
would also like the figure what is the cost of the recovery?
That should be one area. And then the other is the actual
dollars that were inappropriately committed to the client, how
much of that do we actually get back? So two different areas.
Thank you, Mr. Chairman. I appreciate it.
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Chairman JOHNSON. You know, we have got to get serious
about better protecting this program which is paid for by
America's hard-working wage earners, and Americans want, need
and deserve no less.
I thank you all for being here today. And we have votes, so
we are going to call it a day. With that, the subcommittee
stands adjourned. Thank you for being here.
[Whereupon, at 3:30 p.m., the subcommittee was adjourned.]
[Questions for the record follow:]
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