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Government Programs Have Become One Big Scammer Fraud Fest

Jan 13 2014, 10:51am CST | by

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Government Programs Have Become One Big Scammer Fraud Fest
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Government Programs Have Become One Big Scammer Fraud Fest

Amongst all the polls about how various groups view their prospects going into 2014, I’d like to see one polling people who habitually defraud the government.  I bet it would be off-the-charts positive, as they look

for a banner scammer year.

We are being inundated by news stories of fraud perpetrated against numerous government programs.  The feds themselves put Medicare and Medicaid fraud at approaching 10 percent  of the programs’ budgets, or about $100 billion a year for the two programs.  And I’m betting that’s on the low side.

And yet instead of solving this problem, President Obama harangues the country, and especially Republicans, for being unwilling to throw even more money at the federal government’s Fraud Fest.

Let’s review some of recent stories.

Medicaid — There’s so many Medicaid fraud stories it’s hard to choose the “best.”  Perhaps the most egregious, though far from being the most expensive, is a December Wall Street Journal story explaining that “the Manhattan U.S. attorney accused 49 current and former Russian diplomats of participating in an alleged scheme that garnered nearly $1.5 million in fraudulent Medicaid benefits.”

The diplomats are charged with underreporting their incomes so they could qualify for Medicaid.  The story says that over the last decade 92 percent of New York-based Russian diplomats’ childbirths were paid for by Medicaid, a program created to cover poor U.S. citizens.  So highly paid foreign diplomats are allegedly having babies at U.S. taxpayer expense.

Several years ago the New York Times ran a series on Medicaid fraud wherein one New York City official estimated that about 40 percent of the city’s Medicaid expenses were fraudulent. And yet the problem still isn’t under control.

Long Term Care — While we’re on Medicaid fraud, let’s include Medicaid’s program to cover poor seniors in nursing homes—at least, they’re supposed to be poor.  American Enterprise Institute adjunct scholar Mark Warshawsky recently wrote in the WSJ that Medicaid pays for about two-thirds of the elderly’s long-term care costs.  That money is meant for poor seniors, but many seniors in nursing homes have significant assets in homes—up to $802,000 worth in some states—cars and savings.  Indeed, there is a legal specialty known as “elder care attorneys” who help families hide grandma’s assets so she can qualify for Medicaid.

Medicare — Last week the Miami Herald ran a story about a South Florida woman found guilty of Medicare scams costing taxpayers $20 million.  In December a Houston doctor was charged with defrauding Medicare of $158 million, involving false claims for mental health treatments.

Earlier stories explain that Italian, Russian and Nigerian mobsters have moved in to Medicare fraud because it’s so easy, lucrative and, if you get caught, lighter jail time.  That’s why when CBS’s 60 Minutes covered Medicare fraud a few years ago—and recently updated that story here —one of the criminals who had been caught boasted he had been making $20,000, $30,000, $40,000 a day!

UnemploymentObama and the Democrats are pushing hard for an extension of long-term unemployment benefits, making one wonder if they just like to throw away taxpayers’ dollars.

The U.S. Department of Labor recently released a report claiming that there was some $7.7 billion in “improper” unemployment benefit payments in 2013.  Among the most fraud-ridden states, Nebraska wins with an 18 percent improper payment rate, followed by North Carolina (17.5%), New Jersey and Louisiana (16%), Maine and Ohio (14%).

Why are Republicans and conservatives heartless for not wanting to expand these fraud-ridden programs, while Democrats are compassionate for letting your hard-earned tax dollars be stolen by the fraudsters?

Food Stamps — And speaking of Democrats pushing more spending in fraud-filled programs, how about those food stamps?  The push is on to keep funding the food stamp program, which has doubled to 47.3 million people since 2006.  According to a December story in the New York Times, the government estimates the food-stamp fraud rate to be about 4 percent, or $3 billion./>/>

Disability — Last fall a Senate subcommittee report found massive evidence of fraud in the Social Security Administration’s Disability Program.  According to one news account,  “The fraud is so rampant, and disability cases have so proliferated in recent years, that the Social Security’s Disability Trust Fund may run out of money in only 18 months, says Sen. Tom Coburn, R-Okla.”

And as if to give Coburn a resounding amen, last week New York City workers were charged with swindling the disability program out of an estimated $400 million since 1988.  These “disabled” claimants go on to have productive second careers doing many of the activities they claimed they couldn’t do.

Social Security — Monthly Social Security checks allow millions of seniors to live with dignity, even dead ones.  A June report by the agency’s office of inspector general found that in 2012, the agency paid out about $31 million to 2,475 dead people, which was much better than the 2.1 million deceased people who received benefits in 2011.

Obamacare — There have already been multiple news stories of Obamacare scams, and the program is just getting started.  Seeing how well the government polices all of those other programs, which have been around much longer and aren’t nearly as complex, Obamacare is likely to be a scammers’ paradise.

To be fair, the government has cranked up its fraud-fighting efforts over the past several years, and has caught some criminals—like its own employees.  Just last month the Environmental Protection Agency’s highest-paid employee—a “climate change expert,” no less—was sentenced to 32 months in prison for bilking the government out of $1 million in salary and benefits.  He was taking off weeks and months at a time, claiming he was secretly working for FBI.

If a blatant liar and thief was working next to senior government officials for years and no one noticed, how successful do we really think these same people will be rooting out fraud?

The problem is that the government has created so many programs with so many regulations covering so many people that it is virtually impossible to effectively police them all.  Plus, government officials don’t seem to have much motive.  Private sector executives would be fired for letting so much money—10 percent and more—slip through their hands, or the company would go broke.  Not in the Obama administration.  He uses it as an opportunity to demand that taxpayers fork over even more.  And that may be the biggest scam of all.

Merrill Matthews is a resident scholar with the Institute for Policy Innovation in Dallas, Texas. http://twitter.com/MerrillMatthews

Source: Forbes

 

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