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Senate Investigates Social Security Representative Payee Fraud

Wed, 05/03/2000 - 12:00am — Karen Stevenson
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About 6.5 million recipients of Social Security and Supplemental Security Income benefits must have help managing their money, including more than 750,570 beneficiaries which have an organization handling their monthly checks. These organizations include social service agencies, banks and hospitals.

Since Fiscal Year 1998, The Social Security Administration Office of the Inspector General (OIG) has investigated 1,352 representative payee cases, leading to 313 convictions and identification of fraud losses totaling over $7,500,000.

One example is the Aurora Foundation case, which was the subject of a television news magazine segment in January 2000, entitled "When Nobody's Looking." Aurora Foundation an organizational representative payee for over 140 disabled individuals in West Virginia. An investigation revealed that the head of the Aurora Foundation, Gregory Gamble, had embezzled over $300,000 between April 1995 through May 1999. The majority of these diverted funds were SSA benefit payments.

Another example of mismanagement was Ivy's Social Services, Incorporated (Ivy's), a fee-for-service rep payee located in Phoenix, Arizona and Denver, Colorado. An OIG investigation revealed that Ivy's was an organizational rep payee for 330 individuals from March 1996 to May 1997. During this short period of time, the head of Ivy's spent approximately $274,000 of the beneficiaries' money to make personal purchases. In addition to paying off $65,000 in personal credit card debt, the subject of the investigation also used the funds to furnish, and pay the rent for, three personal residences.

About 6.5 million recipients of Social Security and Supplemental Security Income benefits must have help managing their money, including more than 750,570 beneficiaries which have an organization handling their monthly checks. These organizations include social service agencies, banks and hospitals.

Since Fiscal Year 1998, The Social Security Administration Office of the Inspector General (OIG) has investigated 1,352 representative payee cases, leading to 313 convictions and identification of fraud losses totaling over $7,500,000.

One example is the Aurora Foundation case, which was the subject of a television news magazine segment in January 2000, entitled "When Nobody's Looking." Aurora Foundation an organizational representative payee for over 140 disabled individuals in West Virginia. An investigation revealed that the head of the Aurora Foundation, Gregory Gamble, had embezzled over $300,000 between April 1995 through May 1999. The majority of these diverted funds were SSA benefit payments.

Another example of mismanagement was Ivy's Social Services, Incorporated (Ivy's), a fee-for-service rep payee located in Phoenix, Arizona and Denver, Colorado. An OIG investigation revealed that Ivy's was an organizational rep payee for 330 individuals from March 1996 to May 1997. During this short period of time, the head of Ivy's spent approximately $274,000 of the beneficiaries' money to make personal purchases. In addition to paying off $65,000 in personal credit card debt, the subject of the investigation also used the funds to furnish, and pay the rent for, three personal residences.