Fraudsters plead guilty to bilking Social Security but avoid jail time

Patricia Munson had lived with her mother in Arizona for decades, and when the older woman died in 2016, Munson looked at her finances and realized she wasn’t going to be able to make ends meet without her mother’s Social Security check.

So when the feds kept sending the money, she kept collecting and spending it.

Social Security investigators finally caught up with Munson, and late last year she pleaded guilty and was sentenced to three years’ probation.

Munson is one of 11 people who’ve been charged in Arizona with collecting Social Security benefits on behalf of someone who died, as part of a new agency push to clean up its records and better police its payment registries.

The 11 people stole more than $1.3 million combined.

Authorities said they flagged nine other cases that were resolved without criminal charges and recovered $1.2 million from them.

Despite the tough talk, the government sought light sentences in the cases, and none of the defendants who have gone through to sentencing have received any prison time.

Munson, for example, was ordered to do three years on probation and to pay restitution of $50 a month over 34 months.

Freda Hunt, who pleaded guilty to felony theft of government money for stealing $144,412, earned five years of probation and was ordered to pay back $200 a month for 59 months.

Tamara Head, who pleaded guilty to a misdemeanor count of theft of public money after collecting her dead father’s Social Security checks from March 2016 to May 2020, received two years’ probation and agreed to pay restitution of the $63,307 she pilfered.

Head says she did send a copy of the death certificate to Social Security, but the agency kept paying checks anyway, until Arizona verified the death in its own records in 2020.

Her lawyer said her crime didn’t deserve time.

“Ms. Head did not threaten or intimidate anyone in committing the offense. No person suffered bodily injury or psychic trauma. In fact, other than the economic harm suffered by the public writ large, there is no actual victim,” the lawyer told the court. A federal judge agreed, slapping a two-year probation period on Head.

The government agreed with that sentiment, arguing in another case against a man who took $60,891.90 sent to his dead father that there was no real “individual victim.”

Federal prosecutors also said Douglas Pasley only took the money and “did not affirmatively make a false representation” to get the funds.

“Thus, the government respectfully suggests that these facts favor a lesser punishment,” the acting U.S. Attorney at the time, Glenn B. McCormick, told a judge.

The cases were flagged by Social Security’s inspector general as part of ongoing efforts to sniff out waste, and were developed during COVID-19 shutdowns, thanks to tips from Social Security field office employees.

Thomas A. Schatz, president of Citizens Against Government Waste, said bogus Social Security payments are part of a larger problem for the feds, who just don’t have the systems in place to stop them. He pointed to the private sector, where companies have safeguards to make sure their money isn’t wasted.

“It’s all part of a problem with government computers and communications and record-keeping — they have never been good, and I would say this is all agencies — they’re simply not very good at preventing fraud from occurring,” he said.

“It’s too easy in many cases to take money from the government, and especially if the consequences are insufficient to deter similar behavior in the future,” Mr. Schatz said.

Paying dead people is particularly troubling.

The IRS paid $1.4 billion in pandemic stimulus checks to dead people from the first round of stimulus checks in 2020, and paid tens of millions more in another round of stimulus payments last year, according to that agency’s inspector general.

At Social Security, the issue of paying dead people has bedeviled the agency for years, though things are improving.

A 2009 report flagged 6,000 people for whom the agency had clear evidence of death in its files but was still making payments. A 2013 follow-up found 2,500 names, and a 2018 version whittled the list to just 1,281 names.

But dozens of names appeared on all three lists, meaning Social Security still hadn’t cleared them after nearly a decade of warnings.

The inspector general also periodically reviews payments state-by-state. A 2021 audit of California, for example, found Social Security paid more than $21 million to 245 dead people. Reviews of Maryland and Michigan in 2019 found another 145 dead people paid $16.9 million.

That’s a minuscule fraction of the 65 million or so people who collect Social Security checks each month, at a cost of more than $1 trillion a year.

The Arizona U.S. attorney’s office didn’t respond to a request for comment on the cases it prosecuted.

Some prosecutors have won jail time for other Social Security fraud, including a six-month sentence against a Texas woman who collected her father’s checks from 1997 to 2015.

But even some of the agency’s most egregious cases have resulted in leniency.

An Oregon man who cashed Social Security benefits for his aunt for more than 40 years after her death — collecting $460,192.30 along the way — was sentenced last year to just three years of probation.

Prosecutors said George Doumar not only didn’t report his aunt’s death to Social Security, but forged her signature to open a bank account to continue receiving her checks. He also filed address changes for her when he moved from New York to Oregon in 1979, eight years after her death.

Doumar also admitted to cashing a $1,200 coronavirus stimulus check made out to his aunt. Doumar, who was 76 at the time he was caught, was also collecting Social Security in his name.

The aunt died in 1971. Authorities flagged her case after realizing she was the second-oldest person on Social Security’s rolls at 114 years of age, yet hadn’t had any updates to her records in decades.

Authorities said Doumar deserved leniency because he agreed to sell his home to help repay the government.