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Cheaters Must Not Prosper

Gaming the public pension system for inflated retirement funds is bad enough; scamming the public pension system by pretending to have permanent disabilities is much more disgusting. As the NYT reports:

The United States attorney in Manhattan, Preet Bharara, said, ‘Employees [of the Long Island Railroad], in many cases, after claiming to be too disabled to stand, sit, walk or climb steps, retired to lives of regular golf, tennis, biking and aerobics’…

A sampling of hundreds of cases approved by two doctors showed that $121 million had been paid to workers whose disabilities were either fabricated or exaggerated, according to court papers, though the total was quite likely more. It was unclear if officials would try to stop the payouts, or could even legally do so, before the disbursements hit $1 billion.

The government should come down hard on this. It is a tragedy that money intended to go to disabled LIRR retirees and their families was scooped by liars and cheats before being burned on golf and tennis. The two doctors involved in this scam need to be made examples of; let’s hope they go to jail for a long time and lose every dime they own.  Other doctors similarly tempted should realize that they will ruin their lives and impoverish their families if they go down this road.

There is an epidemic of financial crime in this country; from Wall Street to the LIRR people are stealing everything that isn’t nailed down.  Ultimately this is a moral and social problem, but we clearly need to toughen up the laws and do a better job of enforcing them. Jail needs to be part of the solution, and the financial penalties for fraud should be increased to the point where people convicted of these crimes are picked clean.  We have not done enough to deter these destructive crimes, and that needs to change.

A particularly troubling branch of fraud involves the medical profession.  Fake Medicare claims, fraudulent testimony in civil lawsuits, and false disability certification cost huge amounts every year: that needs to change and fast. A lot of bad doctors need to go to jail, and the sooner the better.

Note to politicians: pushing for tough anti-fraud laws with stiff penalties is good policy and good politics.  This is one way to turn the public anger about Wall Street abuses and other financial crimes into a serious force for constructive reform.

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  • Bruno Behrend

    If Western Civilization fails, the future civilizations digging through our ruins and corrupted, but recoverable, data files, will conclude that public employment, and the mindset of personal, greedy entitlement, was the cause.

    They will write papers discussing how we let public employees do this to us.

  • jetty

    “Note to politicians: pushing for tough anti-fraud laws with stiff penalties is good policy and good politics.”

    Hahahahahahahah. Good one. Anti-fraud laws from the fraud professionals.

  • Toni

    Any time the government creates a big pot of money, cheaters go after it, and many prosper. Who doesn’t agree that the cheaters should be stopped and punished? The problem is how. The bigger the numbers — dollars and recipients — the bigger the potential fraud.

    Little Puerto Rico is home to big disability fraud. The WSJ reported in March that that “nine of the top 10 U.S. zip codes for disabled workers receiving benefits can be found on Puerto Rico.”

    The story, “Insolvency Looms as States Drain U.S. Disability Fund,” reports that the Social Security Disability Insurance program “is set to soon become the first big federal benefit program to run out of cash–and one of the main reasons is U.S. states and territories have a large say in who qualifies for the federally funded program…. The disability fund, however, will run dry in four to seven years without federal intervention, government auditors say.”

    Interactive graphics let readers view a map and sort a table of states’ SSDI statistics. I’m happy to report that only 3.5% of Texans are on disability, which is among the lowest rates. (With a severe case of MS, I’m in that 3.5%.) West Virginia and Arkansas rank highest, at 8.8% and 7.8% respectively.

    Two follow-ups on SSDI fraud in Puerto Rico: “Disability Claims in Puerto Rico Get New Scrutiny”
    “Puerto Rico Disability Claims Probed” (by the Social Security Administration’s inspector general)

    Won’t it be nice to find out how much Puerto Rico has cost us fraudulently? Note that the LIRR cheaters could cost the federal Railroad Retirement Board more than $1 billion. “Federal” means us, too.

    According to the RRA’s website, “While the railroad retirement system has remained separate from the Social Security system, the two systems are closely coordinated… The purpose…is to place the Social Security trust funds in the same position they would be in if railroad service were covered by the Social Security program instead of the railroad retirement program.”

    This is a guess, but I’m betting the RRA system is just as broke as overall Social Security. The RRA was created in the 1930s, before Social Security took effect. I’m guessing also that in the seventy-something years since then, the RRA was never merged into Social Security because railroad employees get something the rest of us don’t.

    Crooks are crooks. May they all rot in jail. But, first, may they all get caught.

    PS I’m fortunate to have private disability insurance from my longtime employer, Forbes, as well. Periodically, that insurer sends me to my neurologist so he can fill out a form and confirm that my permanent disability is still permanent. Maybe the SSA should send out forms.

  • dearieme

    I follow a blogger who is very sound on the wisdom of jailing the bent bankers and fraudulent politicians who have got us into this mess, yet hates it when anyone suggests that the crooks and cheats in the trade unions be treated similarly.

    Mind you, no-one much is pointing at the other main guilty party – we the people.

  • Jimmy J.

    I have a nephew that is a fraud investigator for insurance companies. (He contracts his services to different companies.) With the electronics (cameras, cell phones, surveillance cameras, etc.) now available he finds it quite easy to finger the frauds. The insurance companies are happy to pay him well because he saves them money.

    Medicare, Medicaid, and Social Security pay lip service to preventing fraud, but seldom bother. Actually, they are charged with increasing their customer base and satisfaction. (Yes, that’s right – benefit recipients are called customers or clients.) I know it is hard to believe, but check out any Social Security office and see what is happening there. Most of the people in there are under 60 years of age and applying for disbility benefits or immigrants applying for SSI benefits for their parents/grandparents.

    Another fact. IBM has developed a computer program to detect fraud in medical claims. It was offered, free of charge, to the U.S. governmment and was turned down.

    Then there’s Supplemental Security Income (SSI). This program is primarily welfare for the parents and other dependents of immigrants. (Although some poor U.S. citizens qualify as well.) I live in an area with many legal and illegal Latino immigrants. The SS office here spends a lot of time processing SSI for the parents and grandparents of immigrants who have moved their extended families to the U.S. Not many people are aware of this expenditure of money on people who have never paid taxes or a dime into the FICA/Medicare funds.

    The above issues represent some of the problems with the “Blue” model.

  • Ronchris

    I feel somewhat bad for pointing this out, but these crooks are cut from the same cloth as all those “heroic first responders” who begged for $billions for their permanent disabilities due to WTC dust.

    I wonder if anyone will muster the fortitude to investigate that herd of sacred cows?

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