Wednesday, July 01, 2015

Welfare fraud sweep nabs 30 Orange County residents, 2 corporations in Kiryas Joel 

County officials on Wednesday announced welfare fraud charges against 30 people and two corporations, bringing the amount of fraudulently obtained public benefits wrapped up in three county-wide sweeps since January 2014 to more than $1 million.
Orange County District Attorney David Hoovler and County Executive Steve Neuhaus stressed that there is a critical need for legislation to close state and federal loopholes that allow people with substantial income or assets to game the system in ways that allow them to legally collect public benefits.
In this sweep, dubbed "Operation Million Dollar Mark,"officials say the defendants improperly collected $324,000 in public assistance administered by the county. The full total now is $1.07 million.
One in four people in Orange County collects some kind of public benefit, Hoovler said. Many are legitimately eligible and deserving, but fraud remains a serious problem.
"It affects everyday people," Hoovler said. "It affects the taxpayers of the county more than you would think."
The arrests announced Wednesday bring the number of people charged in these sweeps to 97, plus the two corporations. Hoovler put the amount of fraud prevented by the investigations and arrests at $5 million.
The investigations have been done through cooperation between the county's Department of Social Services and its special investigations unit, the county sheriff's office and the district attorney's office, and entail significant legwork and scrutiny of documentation and public records, said Ann Caldwell, the county's deputy commissioner of social services.
In the latest sweep, the largest chunk of fraud - $239,979 - was through Medicaid. Another $63,908 was attributable to fraudulently collected Supplemental Nutrition Assistance Progam benefits and $20,905 from Temporary Assistance.
So far, the county has received $123,930 in restitution from prior sweep defendants, and $148,390 in voluntary repayments from people who had not been charged.
Both of the corporations involved in the most recent sweep are owned by residents of the Village of Kiryas Joel.
The largest fraud charged was against Mordechai Friedman, 37, of Kiryas Joel, 100 percent shareholder of YMF and Associates. Officials say he fraudulently collected $61,442 in Medicaid benefits by under-reporting his income. He was charged with second-degree welfare fraud, a felony.
Another businessman, Chayim Deutsch, 36, of Kiryas Joel, structured his financial draws from his corporation, KJ Advertising, so he could create false documents and under-report his income and appear to be eligible for Medicaid. He collected $21,133 in benefits, officials said. He was charged with third-degree welfare fraud.
Hoovler and Chief Assistant District Attorney Chris Borek explained that individuals who structure their business corporations properly and who structure the pay they draw from the corporation can actually be eligible for public assistance, even if they own homes and cars and have substantial savings, and it's legal. Those business owners are often instructed on doing this by tax professionals, Hoovler said.
"It cries for a legislative fix," he said. "We need these loopholes closed. ... It's the IRS, it's the state level. There's multiple levels that need to be fixed."
Hoovler and Neuhaus announced that they will be contacting state Assembly and Senate members to address the issues, and a major push by the state's district attorneys' and county executives' associations to close loopholes is coming.

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