Social Security Disability Fraud In Puerto Rico: Probe Leads To Arrests, Prompts Call For Reform

Arrests have been made in a multimillion dollar fraud case that is being reported as one of the largest seen in the history of the Social Security Administration. Authorities have arrested 75 people in Puerto Rico, including a former Social Security worker, for stealing $2.5 million in false claims. Puerto Rico has the highest rates of fraud when it comes to disability benefits in the United States.

Those charged have received over $2 million in disability benefit payments, and this includes three doctors. The biggest offendor is reportedly a former social security worker who took $2.5 million in false claims. This employee is also responsible for sending other claimants to doctors who would file false claims. "There has never been a case like this in the history of the Social Security Administration," said federal prosecutor Rosa Emilia Rodriguez. "If this fraudulent activity hadn't been stopped, the government would have lost more than $35 million."

The former Social Security worker responsible for the $2.5 million fraud helped claimants looking for benefits and sent them to doctors. The doctors would receive $500 for each fake claim, according to Ed Ryan, New York-based special agent in charge of the Inspector General's office of the Social Security Administration's investigations office. Agents foiled the operation by taking videos of people that lied about their claims. For example, one was a gym owner who supposedly had back problems, but had a picture of himself on Facebook lifting a girl above his head.

When federal agents started their investigation in 2009, they realized that "the conspiracy was much larger and far-reaching than [they] thought, reveals Ryan. In fact, the fraud was not just in Puerto Rico--it went all the way to Baltimore as well. But the majority of the fraud was being committed in Puerto Rico, as nine of the top 10 U.S. zip codes of fradulent claims were in Puerto Rico. "Not everyone is receiving them fraudulently, but it is worrying," said Ryan. "Something is wrong."

According Rep. Sam Johnson, a Texas Republican and the Social Security chairman of the Ways and Means Subcommittee, the Puerto Rican case will be discussed in a September hearing. "Clearly this isn't a case of just a few bad apples," he said in a statement. "That such fraud could occur in the first place raises serious and troubling questions regarding Social Security's management of the disability program."

To prevent this kind of fraud around the country, units have been established around the country and in San Juan to investigate potential cases of Social Security fraud. In fact, Ryan has revealed that 24 other U.S. cities have ongoing investigations and they function "basically to stop the bleeding before it begins."