Guaranteeing Checks: Pueblo County DA gets aggressive to stop welfare fraud
Nursing homes in Pueblo County couldn’t help but notice when some of their residents didn’t have enough money to pay their room and board yet, in fact, those residents were supposed to be receiving Social Security or other benefits to amply cover their nursing home expenses.
What was happening was those who were designated as the nursing home residents’ payees, which included relatives who either through power of attorney or through some government action had control over the residents’ finances, were spending those funds on themselves instead of giving them to the residents and their nursing homes.
The dollar amounts each person who has been committed of welfare fraud steals can be staggering.
Paul “Jake” Villegas, an investigator with the 10th Judicial District Attorney’s Office, this year did the grueling work leading to the prosecution of two particularly egregious welfare fraud cases.
According to court records provided by Villegas, the range in dollar amounts defrauded can be large. On the lower end, Catherine Kegg Schwartz of Pueblo County, between March 29, 2016, and June 30, 2017, was accused of defrauding about $5,366 from the Pueblo County Department of Human Services (DHS). She faced from one to three years in prison and a fine of up to $100,000.
And on the higher end is Tiffany Marie Davis, also of Pueblo County. Her alleged illegal take from DHS was $21,779 between Oct. 4, 2014 and May 24, 2018. She faced from two to six years in prison and a fine of up to $500,000.
A “community outcry”
It was what Pueblo District Attorney Jeff Chostner in December called a “community outcry” over the unusually high amount of cases like these that used to have gone uninvestigated and therefore unprosecuted that prompted him to take action. In some cases people were getting food stamps they weren’t entitled to and in others relatives of victims were skimming thousands of dollars in Social Security and other benefits from grandma and grandpa.
The complaints were coming primarily from representatives of area nursing homes, the DSS, and the Social Security Administration – all of whom witnessed the fraud firsthand and were frustrated that little was being done about it.
In response, Chostner said he asked the Pueblo County Board of Commissioners for funding for a special investigator dedicated to gathering evidence to prosecute welfare fraud.
The commissioners gave their approval and Chostner hired Villegas in March. Since then, Villegas has handled about 30 cases of felony welfare fraud each mostly with a value of more than $5,000 in taxpayer money stolen.
“Before March, we didn’t investigate 30 welfare fraud cases in [the span of] three years,” Chostner said of his short-handed staff.
So far, Villegas’ efforts have raked in $46,000 from three fraud cases reported by the Social Security Administration on behalf of the federal government and $95,000 from five cases reported by DHS on behalf of the state. The remaining 22 cases Villegas has investigated have yet to go to trial.
Chostner explained that fraud cases involving food stamps are fairly simple – someone is caught lying on an application and that person is fined, incarcerated, or both. But cases involving cash entitlements like Social Security benefits are more difficult to investigate because looking into them involves following a paper trail.
For instance, he explained that a relative will claim on paper he or she spent let’s say $2,000 in gas taking grandma on trips to the mall or Dillards or some other higher-end department store, when in fact the trips were made to buy clothes for the grandkids. Or relatives will say they spent hundreds on groceries for a grandparent who lives in a nursing home which provides food as part of her nursing home’s monthly fee.
Now before investigator Villegas got hired on at the District Attorney’s Office, he did welfare fraud investigations for the Department of Human Services (DHS).
“Jeff [Chostner] stole him from me,” said DHS Director Tim Hart. Hart replaced Villegas, who worked for DHS for close to two years, with another investigator for the DHS Fraud Unit, Kendra Carstensen. Hart said it was difficult to replace Villegas because criminal investigators who normally work for law enforcement agencies rarely consider career opportunities at social service agencies like DHS.
Carstensen reported in December that her unit investigated about 1,800 cases of suspected welfare fraud for DHS over the past four years. Of those, 195 were deemed to be fraudulent and a total of about $377,695 in fraudulently obtained benefits were retrieved. That’s an average of about 450 DHS suspected fraud cases per year with 46 of those that needed to be prosecuted for fraud collecting about $94,424 annually. Now adding in the money DHS collected from Medicaid fraud, DHS saved $402,634 in taxpayer money over the past four years averaging $100,658 per year.
According to Carsenten, as of December 422 suspected fraud cases were awaiting investigation.
Carsenten said that this year she sent some of the prosecutable cases to Villegas at the District Attorney’s office. Although most of the cases were worth more than $5,000 in welfare money defrauded, she did say she sent some cases to the DA valued at just over $2,000 each.
To get a better understanding of which benefits the DHS is responsible for, Hart said his agency handles state-issued food stamps and state-issued cash assistance to people who are out of work, people who work but are below the poverty level, and those who are disabled and who are waiting for the Social Security Administration to determine their eligibility for federal benefits.
In all, Hart said that the state offers 28 different types of state-issued cash-assistance benefits to people in need. Carstensen added that six months prior to December, the state added Medicaid benefits to DHS’s plate in addition to the aforementioned state-issued food stamps and state cash benefits.
But Hart cautioned that although the number of cash benefits retrieved by DHS may seem high to the average person, one must consider the total dollar amount of benefits DHS distributes in any given year. He said DHS distributes well over $100 million annually in food stamp benefits alone. Hart said, by in large, people collecting public assistance are overwhelmingly honest.