Saturday, June 28, 2014

Attorney Sentenced For Theft of Government Property For Receiving Deceased Grandmother’s Social Security Benefits For Over 10 Years - Case Study On What NOT To Do When OIG Or Investigators Contact A Suspect

The Office of Inspector General (OIG) is increasing their investigations against those who are suspected of improperly taking Social Security benefits.  We have seen OIG request interviews of family members where the parents are out of the country and receiving Supplemental Social Security (SSI) and other government benefits. If someone is charged with theft of Social Security, SSI or Medicare benefits, they will be charged under 18 USC Section 641 (theft of government property).

If the OIG is investigating, it means that there is suspicion of criminal conduct. In a recent federal criminal case, the OIG started investigating and the person receiving the benefits lied to the OIG investigator. This is a case example of what not to do when contacted by the OIG and when an investigation is pending.

The facts are as follows. On May 24, 2000, the grandmother of Audrey Owens, an attorney and retired deputy public defender for Riverside County, passed away. Her Social Security benefits had been deposited into a bank account that had her and her father’s name on the account. Ms. Owens took her dad’s name off the account and changed the bank account address to her home. For the next 12 years, the benefits went into this bank account and Ms. Owens spent the funds. Ms. Owens did not think about the fact that her grandmother would have been over 100 years’ old in 2012.

In August 2012, as part of a “centenarian project” OIG began investigating Ms. Owens’ grandmother. The OIG was investigating all persons aged 100 years or more who are receiving Social Security or SSI benefits to make sure they are still alive. OIG could not locate Ms. Owens’ grandmother and therefore suspended benefits. Later this fact was used to show that Ms. Owens would not have ended the fraud on her own.  

On August 30, 2012, OIG agents went to Ms. Owens’ home and spoke to a man and asked him where the grandmother was. This man said the grandmother was in Kansas City. On September 24, 2012, Ms. Owens agreed to speak to OIG agents without an attorney. Ms. Owens told some mistruths to the OIG agents – which is not uncommon for people interviewed without an attorney when they panick. Ms. Owens stated that the man the OIG met was a homeless man she took in from a church when in fact he was her husband. Ms. Owens also stated that she thought the funds that went into the account were from her father’s VA benefits. Another untruth.

It took the U.S. Attorney’s Office a year before filing a criminal complaint against Ms. Owens. The total loss was just over $120,000 for benefits received as well as Medicare premiums paid on the grandmother’s behalf. 

During this year, it would have been very helpful for Ms. Owens if she had started repayment of these funds on her own before she was charged. Unfortunately, it appears that nothing was done until just before sentencing. Once Ms. Owens was charged, she plead open to the Court. By this time, she had retired from the  public defenders’s office.

At sentencing, Pretrial Services recommended 6 months. The government sought a sentence of 12 to 18 months. On June 2, 2014, Judge Phillips sentenced Ms. Owens to 1 year and 1 day (the extra day is a sentencing benefit to Ms. Owens for various reasons).

Ms. Owens sought to have her sentence lower by addressing the fact that she suffered from alcoholism during this time period. It is difficult to determine how persuasive this was given that she was employed full-time during this time period.

One thing that was done correctly here was repayment of restitution before sentencing. Ms. Owens wisely repaid all the funds to SSA except for $1,747 and this may have been a factor in the court not sentencing Ms. Owens to 18 months. If this had been a state court case rather than federal, there probably would not have been a state prison sentence for a first time offense where restitution was almost entirely repaid, however the federal system is much harsher on sentencing results for these type of cases -- especially when a professional is involved.

There is no question that lying to a government agent such as OIG makes matters much worse. It is better to refuse to be interviewed if the person cannot say anything without incriminating themselves. This is when someone should obtain an attorney for advice so they do not make such a terrible mistake that compounds problems. This can often lead to obstruction of justice charges or enhancements.

Posted by Tracy Green, Esq.

Phone: 213-233-2260


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