Welfare fraud climbs as Massachusetts steps up enforcement

BOSTON - The state of Massachusetts may be stepping up efforts to stop welfare fraud, but some lawmakers say even more must be done to prevent people from gaming public assistance programs.

Their concerns are fueled by a new report from State Auditor Suzanne Bump revealing a dramatic increase in welfare fraud cases.

Bump's office found fraud in about 1,100 cases, representing $13.7 million worth of fraud, during the budget year that ended last June, according to the report. That represented a 44 percent increase in dollar value from the previous year, when investigators uncovered about $9 million in fraud. 

The office's Bureau of Special Investigations looked into more than 10,000 cases during the year, the report said.

More than $7.7 million worth of fraud was related to MassHealth, the state's Medicaid program. Another $5.7 million involved people who misrepresented their income to falsely claim eligibility for programs such as food stamps and cash assistance. At least $245,000 of the fraud was tied to childcare benefits.

"We owe it to the taxpayers to run these programs with integrity," Bump told reporters last week after releasing the findings. "We owe it to the people who rely upon those programs to make the best use of every dollar available."

She attributed the increase in fraud cases to stepped-up efforts by law enforcement agencies to crack down on fraud.

In one case, a Lawrence convenience store owner and his son pleaded guilty to defrauding the federal food stamp program, which is administered by the state, of more than $1.5 million dollars in fraudulent transactions over a period of three years.

Prosecutors alleged that Cristian Pena, owner of Bonao Market, and his father, Ramon, were "trafficking" in food stamps by charging recipients a fee in order to get cash for their benefits instead of using them to buy food and other necessities, according to the Essex County District Attorney's Office.

Several other Lawrence stores were involved in the scam and were the subject of raids by state and federal authorities.

Cristian Pena, a Dominican national, was sentenced to four to six years in state prison and faces deportation.

Still, only a small number of the cases – 27 of the 1,110 where fraud was identified – resulted in prosecution, according to the audit. Thirty-six were identified for administrative action, and seven resulted in out-of-court settlements.

The penalty for welfare fraud is up to 10 years in prison, in addition to repayment of the money.

House Minority leader Brad Jones, R-North Reading, wants the state to consider the use of biometric identifiers such as fingerprints and facial recognition to detect fraud.

“We’re losing millions of dollars a year to people who are gaming the welfare system,” he said. "That needs to stop."

Jones said the state and federal governments both use biometric identification for immigration, healthcare benefits, education and other public programs. The technology -- which tracks identifiers such as fingerprints or facial patterns to check an individual's enrollment in public assistance programs -- could save a lot of money, he said.

Rep. Jim Lyons, R-Andover, agrees that the Department of Health and Human Services and the Department of Transitional Assistance, which oversee welfare benefits, haven't done enough to prevent fraud.

He blames the Democratic-controlled Legislature for rebuffing GOP-led proposals, such as the use of biometrics.

"For one reason or another, the Democrats continue to reject these efforts," he said.

But fingerprinting is a controversial means of cracking down on fraud. Advocates for the poor and recent studies suggest the practice is too expensive and does little to stem abuse in public assistance programs.

Gov. Charlie Baker, a Republican who took office a year ago, has pledged to crackdown on welfare fraud.

On the campaign trail, he often made reference to a scathing 2013 audit by Bump's office that revealed millions of dollars paid in "questionable benefits," in some cases to dead people or individuals living in other states.

In that report, Bump's office identified 1,164 cases in which welfare recipients continued to get benefits months after they died, totaling $2.39 million.

The report revealed state agencies paid $368,000 in benefits to 178 guardians who claimed dead relatives as dependents. It also found 40 recipients who were being claimed by more than one guardian.

Every month, an average of 50,000 people in Massachusetts file for basic welfare benefits, while another 450,000 receive food stamps. The state spends $13 billion a year on welfare benefits, including public assistance and MassHealth.

Christian M. Wade covers the Massachusetts Statehouse for CNHI's newspapers and websites. Reach him at cwade@cnhi.com.

Christian M. Wade covers the Massachusetts Statehouse for CNHI's newspapers and websites. Email him at cwade@cnhi.com.

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