Maine ramps up battle against welfare fraud

They claim to be pregnant for 40 months in a row. They assume the identities of their dead fathers. They say they’re single when they’re married. They pretend to be caring for children when they’re not. They steal from the same state agency they work for. They conspire and deceive. These Maine welfare cheats are stealing public money. And they’re going to jail.

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Maine officials are stepping up efforts aimed at catching and convicting anyone who steals welfare money.

Department of Health and Human Service investigators are better trained. Local police are assisting on more cases. And state prosecutors are devoting more time and resources to putting behind bars people who rip off taxpayers’ money.

The numbers tell the story.

Last year, Maine grand juries returned a dozen indictments charging welfare fraud, double the number in 2010. Already in 2012, charges have been lodged against eight defendants in the Lewiston area alone.

State prosecutors secured 10 convictions last year, up 25 percent from a year earlier.

Investigators at the Department of Health and Human Services tripled the number of cases they referred to the Maine Attorney General’s Office over the same period.

Courts ordered nearly three times the amount of restitution be paid last year over the year before. The amount of money collected through court-ordered restitution nearly doubled last year.

Outside the courtroom, administrators last year recovered more than $2 million in overpayments to welfare recipients, also up from the previous year.

In 2010, DHHS fielded 1,200 reports of possible welfare fraud and abuse. In 2011, the number of reports nearly doubled to 2,100.

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While the Maine Attorney General’s Office investigates most crimes against the state, the Department of Health and Human Services is solely charged by law with investigating welfare fraud.

“Nobody was satisfied with the welfare fraud program a couple of years ago,” Assistant Attorney General Peter Black said. Then-Attorney General Janet Mills made the issue a priority, he said. And with a change in administration a year ago, DHHS has followed suit.

“There’s been a top-down change in focus from DHHS,” said Assistant Attorney General Leanne Robbin, who until recently was Black’s boss in the Financial Crimes Division at the AG’s office. “I think it’s fair to say there’s been a culture change over there and I don’t think it’s because welfare fraud is increasing.”

Attorney General William Schneider said the issue topped both his and Gov. Paul LePage’s agendas.

“Almost immediately after I took office in January, we started meeting with the people over at DHHS to try to forge the contacts and the connections that we needed to get the cases from them, where they’re investigated, to us, where they’re prosecuted,” Schneider said. “There seemed to have been a lack of enthusiasm for doing that kind of case in the past.”

Welfare fraud occurs in two primary ways: individuals who get overpayments of benefits by lying on various welfare applications, and individuals who sell or trade their public assistance benefits. The state is going after both.

But while recent figures might suggest that the new spotlight on welfare fraud has remedied the problem, consider two more numbers: The total amount of money believed to be overpaid last year by the Maine Department of Health and Human Services was nearly $4 million, yet agency officials recovered just over $2 million, roughly half the total. The figures involve all types of overpayments, including agency error and intentional and unintentional erroneous application information by recipients.

While the total value of all fraud against Maine’s welfare system isn’t known, a spokeswoman at the Maine Equal Justice Project said most welfare recipients are people who truly need the assistance and don’t abuse it. DHHS’s own figures show that the portion of intentional fraud deemed provable enough for prosecution involves a small fraction of total welfare recipients.

But DHHS officials acknowledge they’re only aware of the fraud they catch.

“We don’t obviously know all of the fraud that’s occurring,” said Dale Denno, a former assistant attorney general who was recently named director of the Office for Family Independence.

To detect more fraud, more troops are needed, officials say.

Last month, the agency’s Fraud Investigation and Recovery Unit told state lawmakers it is “stretched for resources to meet the current number of incidents” of welfare fraud and abuse being reported. The personnel shortage limits the unit’s ability to efficiently investigate reports of fraud and abuse and limits its ability to effectively collect debts owed to the state, according to a report by Maine’s DHHS commissioner.

The Fraud Investigation and Recovery Unit has nine investigators, two fewer than in the 1990s, a DHHS spokesman said.

At the Attorney General’s Office, veteran trial lawyer Black was hired away from a Portland law firm about two years ago to fill a dedicated role aimed at bringing to justice more of the criminals who abuse and defraud the welfare system.

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Most state welfare assistance comes in two basic forms:

• The Supplemental Nutrition Assistance Program (SNAP) — formerly food stamps, the benefit can only be redeemed for specific foods;

• Temporary Assistance for Needy Families (TANF) and Additional Support for People in Retraining and Education (ASPIRE) — two living assistance programs whose benefits can be withdrawn as cash at an ATM or debited at store checkouts in exchange for any product.

In both cases, the benefits a recipient receives from the programs are loaded monthly on a credit card-like “electronic benefit transfer” (EBT) card.

A month ago, an Androscoggin County grand jury handed up five indictments against four Lewiston men and a Waterford woman. They were charged with theft and other crimes stemming from an EBT card trafficking ring, according to court records. Two weeks later, four more people were charged in 8th District Court in Lewiston in connection with that ring.

Authorities say the defendants were trading EBT cards for cash and drugs. These cases marked a new push by the state to cast a broader net for welfare cheats, beyond the more familiar fraudulent practice of lying on applications.

“These Lewiston cases are a product of (DHHS) and the Attorney General’s Office getting together and saying, ‘OK, from a policy standpoint, where should we focus our resources?’” Black said. “And one of the things that the state feels is a concern is the trafficking in benefit cards. There’s kind of an underground economy in trading these cards for cash and for other items.”

Lewiston police Chief Michael Bussiere said that during routine pat-downs his patrol officers started finding EBT cards stuffed in suspects’ pockets. In some cases, the suspects turned out to be drug dealers.

Local police started to work more closely with DHHS investigators and state prosecutors to gather evidence that could be used to successfully prosecute criminal cases.

Bussiere said his department started playing a greater role in welfare fraud investigations a couple of years ago and has roughly tripled the number of its welfare fraud cases on its books. That spike coincided with the economy hitting bottom, he said. The General Assistance office at City Hall was flagging many more cases of possible fraud and abuse and passing along tips, he said. Many tips are generated by legitimate benefits recipients ratting out friends or family members who are cheating the system.

“We’ve done a lot more cases because we’re getting a lot more tips and information that’s being brought in, and that’s fine,” Bussiere said. “We don’t mind doing that. We don’t mind helping out. Our concern is not just that people are stealing from the government, but that people are stealing taxpayer money and they’re taking it away from people who really need it.”

Diversion of money earmarked for welfare benefits also hurts the community in other ways, he said.

Not only do some people withdraw cash benefits loaded on their cards from TANF or ASPIRE to buy contraband, including illicit drugs, but drug dealers themselves might be collecting benefits because they have no declarable income, Bussiere said.

“If drug dealers can come up here and set up shop and not have to worry about daily costs because they’re receiving [welfare] benefits on top of that, that’s another issue altogether,” he said. “If that’s not fueling somebody’s drug habit, that’s making money off of other people’s problems, while also doing it for free.”

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Maine’s battle against welfare fraud includes more training and a change in agency culture that is sending a new message that fraud will not be tolerated, officials say.

Local police bring to their job investigative experience and training needed to build criminal cases against welfare cheats, Black said, but their counterparts at DHHS have traditionally lacked similar credentials.

No more.

Faculty from the Maine Criminal Justice Academy are providing greater training to DHHS investigators. Much of the curriculum in a recently launched program is a condensed version of what cadets at the academy would learn. Also, detectives at the Attorney General’s Office have been meeting with DHHS investigators.

Also changing: a bureaucratic mentality that fraud isn’t worth pursuing.

If referrals of “fishy answers” on applications that are forwarded to investigators appear to go nowhere, those frontline DHHS workers will be less inclined to take action when a red flag pops up on an application, said Assistant AG Robbin. “The culture within the agency tells the worker not to bother,” she said. “They may look the other way.”

But, Robbin said, “if you’ve got an agency that’s saying, ‘We don’t want a single dollar to go out the door for fraud. We’re going to give you support, we’re going to try to get you support to be able to investigate’” that fishy answer, she said, the eligibility worker will be more motivated to blow the whistle. That’s part of the current culture change.

A case involving an Andover woman who was forging letters from a school where she claimed to have been a student showed an obvious misspelling that wasn’t immediately flagged. That misspelling should have tipped off the eligibility caseworker to the likelihood of forgery, Robbin said. Instead, the DHHS worker accepted the letter at face value and filed it. The deceit was only spotted later.

Robbin acknowledged that one challenge to spotting and reporting such deceit is the “very high” load handled by caseworkers. “It’s hard for them to go beyond checking the boxes and the application and making sure that every section’s been gone through.”

Robbin added, “They’re so time-pressed, they’re saying, ‘We’ve got the employer verification — check’ and then they just move on. Maybe the manager’s saying, ‘Move it through. Move it through. Get out the benefits.’”

But if a piece of information causes a caseworker to do a double take, that worker should give it greater scrutiny, she said.

“If you’ve got something that bothers you, that concerns you, we should look into that further before shoveling the money out the door.”

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Most overpayments are handled by DHHS working with clients to recover the extra money paid to them. If a client lied on an application, that case might be referred to the Attorney General’s Office for criminal prosecution.

“We’ve charged everything that they’ve sent over,” Black said.

Prosecutions are not cheap, but Robbin said her agency is guided by no minimum threshold to bring a case to court.

“The collection part of this job is probably not going to make up for the costs of someone investigating fraud,” she said.

Prosecutors pursue the “most egregious” cases, she said. They also highlight cases intended to deter copycats.

Case in point — A DHHS clerical worker secretly held onto returned EBT cards and withdrew money from their accounts. It was difficult to show exactly how much the worker stole, Robbin said, recalling the figure of $138.

“Obviously, you go after that one,” she said, “mainly because you’ve got to send a message to staff: ‘No!’”

She also recounted the case of two men who bought hundreds of dollars worth of water with SNAP benefits at a supermarket, then wheeled the shopping carts loaded with the jugs around the back of the store and emptied them so they could collect the deposit money on the jugs to buy booze and cigarettes, Robbin said.

“So that would fall under the definition of trafficking,” Black said. “That would be something we would prosecute, [though] not a big-dollar item.”

“It’s not a dollars-and-cents question,” Attorney General Schneider said. “I know we’ve increased our restitution collected. We’ve increased the number of cases we’ve brought and we’ve increased the dollar value of those cases. So we’re increasing all three of those values. I honestly don’t know whether that dollar for dollar offsets the cost of doing the prosecutions, but it’s important to do the prosecutions, anyway, just to keep the system credible.”

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