Massachusetts officials are investigating whether to pursue criminal or civil charges against hundreds of people identified in a new state audit who may have fraudulently collected welfare or illegally sold food benefits for cash.
The report Tuesday by state Auditor Suzanne Bump found $18 million in suspicious welfare payments, including money sent to more than 1,160 recipients listed as dead, and signs that some participants may have sold their electronic benefit cards, which is illegal.
Bump said Wednesday that she sent a copy of the audit to the attorney general’s office and referred the findings to the Bureau of Special Investigations, the unit in her office charged with investigating public assistance fraud and identifying cases for potential prosecution.
“We identified some very suspicious and potentially illegal food stamp misuse, and we will be pursuing those individual cases further in order to determine whether charges should be brought,” Bump said Wednesday.
A spokeswoman for Attorney General Martha Coakley said her office is “carefully reviewing” the audit to determine if she should order a welfare fraud investigation.
Also on Wednesday, a war of words developed over the audit’s accuracy, as the auditor and welfare officials slammed each other for withholding information. Officials at the Department of Transitional Assistance suggested that the problem of dead welfare recipients may be overstated.
Agency officials said Wednesday that they could not confirm whether all 1,164 recipients actually received benefits after they died because it has yet to receive the names from the auditor. And they said a separate figure in the audit — the number of supposedly dead dependents claimed by guardians for welfare benefits — was sharply inflated. The agency said it discovered that nearly half of the 178 people were still alive, some were duplicates, and others had already been dropped from the welfare rolls.
“We have requested access to all of the cases mentioned in the audit, so we can conduct a full review of each case, said Department of Transitional Assistance spokesman Matt Kitsos . “These errors highlight the need for a full review.”
But the auditor’s office retorted that welfare officials have not explained how they concluded that the 178 dependents figure was inaccurate and noted that a separate federal review last year also found hundreds of dead beneficiaries on the Massachusetts welfare rolls.
“We cannot just accept what an agency says based on their word,” Bump said, explaining that the department has repeatedly declined to provide supporting documents to auditors. The auditor’s office acknowledged that it has responded in kind by refusing to provide the list of 1,164 dead recipients.
Regardless of the exact number of suspicious welfare payments, one lawmaker urged the state to aggressively pursue charges against anyone who wrongfully obtained benefits. In all, more than 885,000 people received cash or food assistance from the agency, or one in seven Massachusetts residents, at a cost of $1.7 billion last year.
“I think the harshest penalties need to be imposed to send a strong message that we are not going to tolerate fraud in public assistance programs,” said Representative Shaunna O’Connell, a Taunton Republican, who has been pushing for legislation to make it more difficult to qualify for public assistance.
Welfare fraud is not unique to Massachusetts.
An audit last year by the US Department of Agriculture’s inspector general found problems with food benefits in all 10 states it reviewed, including more than 27,000 recipients who appeared to be dead, used a deceased individual’s Social Security number, had erroneous Social Security numbers, received benefits in multiple states, or were otherwise disqualified from receiving the benefits.
In Massachusetts alone, the Agriculture Department audit identified more than 900 participants with “questionable eligibility,” including 520 who were listed in the Social Security Administration's list of deaths.
Massachusetts officials confirmed that someone used the benefits after the client died in 59 of the 268 cases it reviewed.
But there is no indication that Massachusetts was worse than other states, and the incidents amounted to a tiny percentage of the overall caseload. The federal audit flagged 0.12 percent of beneficiaries in Massachusetts and 0.20 percent in all the states it reviewed.
Bump’s audit is just the latest report to fault the Transitional Assistance Department for not doing more to prevent fraud and abuse. The agency’s former director resigned in January after a report from the state inspector general suggested that the state was squandering $25 million a year on improper benefits.
But the interim director said she has already made significant progress in implementing a series of steps to make sure benefits only go to those who are truly eligible, including cross-checking data that recipients provided against other government databases.
In addition, department officials said they will do everything they can do recoup overpayments, noting that the agency has already referred 5,000 cases of potential fraud this fiscal year to the Bureau of Special Investigations, including several flagged by the latest audit.
Bump’s welfare review focuses on payments between July 2010 and December 2012, meaning that virtually all of the suspicious welfare payments occurred within the three-year statute of limitations for prosecution if investigators determine fraud was committed.
State and federal prosecutors have already pursued cases similar to the ones cited by Bump in the past.
Last year, two former owners of a market in Holyoke were sentenced to more than a year in prison on federal charges they illegally gave customers cash for food stamps.
A Quincy store owner and 21 others were charged in state court last April with buying or selling food benefits.
And earlier this month, a Medford woman was indicted for fraudulently collecting more than $161,000 in state and federal benefits.
Bump said the state would probably not press criminal charges in cases in which a family member simply neglected to alert the state right away when a relative died, though the state could try to recoup any aid received after the beneficiary died.
But Bump said the state would alert the Social Security Administration if it finds any cases in which someone wrongfully used someone else’s Social Security number to fraudulently obtain government aid.
“You have to look at intent,” she said.
The federal audit figures reflect a broader challenge facing nearly every company or agency that provides long-term benefits, whether it’s Social Security, a pension, or welfare assistance. How do you find out right away when someone dies?
In many cases, family members notify the agency or regulators find out when mail is returned as undeliverable, but that doesn’t always happen.
So agencies typically consult state or federal lists of deaths. But not every database is complete.
And matches sometimes fail because of data entry errors or different spellings of names.
Nor is the issue new. In 1991, the General Accounting Office found 3,000 cases in Maryland, Pennsylvania, and the District of Columbia in which recipients continued to draw food stamps and other welfare benefits long after they died.
Todd Wallack can be reached at firstname.lastname@example.org.