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Counties work at catching cheaters

By Staff | Apr 28, 2008

In June 2004, a 31-year-old Blue Earth woman applies to receive health care for members in her household at Faribault County Human Services.

Two years later the same person fills out forms for a cash program and food stamps to supplement the medical assistance.

On the application she fails to report that a person in the household is working and has earned income.

Several months later an alert financial worker discovers wages from employment hasn’t been reported.

The case is forwarded to Dorothy Sund-quist, welfare fraud investigator for Faribault and Martin County Human Services.

“If people think they can get something for free, somebody is going to try and take advantage of it,” says Sundquist.

Overpayments in the four programs are calculated to the tune of $12,323.

A referral is then made to the Faribault County Attorney’s Office for criminal prosecution.

“In the past we have dealt with people who intend to commit fraud. Sometimes it’s an honest mistake and they didn’t mean to do it,” says Sundquist. “At times it’s hard to go after a 90-year-old person.”

In this case, the net result:

The woman is charged with two felony counts of wrongfully obtaining assistance. Each charge carries a maximum penalty of 10 years in prison and a $20,000 fine.

Two charges of perjury also are filed against her; each having a maximum penalty of five years in prison and a $10,000 fine. A plea agreement is reached. The woman pleads guilty to one count of wrongfully obtaining assistance, the other charges are dismissed.

Welfare fraud convictions aren’t unheard of in Faribault and Martin counties. Last year, there were seven that totaled $109,395.

Kathy DeNeui, program manager for Faribault and Martin counties income maintenance division, says improved “tools for detection” have made it more difficult for people to cheat the system.

“They’ve made a huge difference in the amount of information we can interface with other government departments and organizations,” she says.

In 2007, income maintenance workers in both counties referred 125 cases to Sundquist for possible fraud. The amount of overpayments totaled more than $130,000.

Medical assistance had 111 instances where those receiving benefits were not eligible. The food stamps program was next with 91 and a cash program had 31.

“Because of the increasing cost of health care we are seeing overpayments in medical assistance as the biggest, and increasing,” Sundquist says.

Changes in household composition and income, says Sundquist, topped the reasons causing ineligibility in the two counties.

As a result of the fraud referrals, DeNeui says county officials have been able to collect thousands of dollars.

DeNeui says the counties took in $27,429 last year in “cash collections.” More than $41,000 was recovered in 2006; $35,513 in 2005; and $24,302 in 2004.

In addition, Sundquist says some recipients who admit to wrongfully receiving assistance may agree to sign a state waiver requiring recoupment or restitution payments.

“The first offense they’re off the programs for one year and it’s two years the second time. A third offense and they are done forever,” she says.

Sundquist says being located close to the Iowa border has caused problems with some people trying to get assistance in both states.

Sundquist says a person receiving cash assistance and food stamps in Faribault County also was getting aid from Illinois. She says obtaining welfare payments from more than one state carries a 10-year disqualification for the first offense.

Faribault County Attorney Brian Roverud says the cases he received in the past were “clear cut and dry.”

While state law says fraud should be treated as theft, a portion of the statute states that prosecutors should take into consideration that violators have been disqualified for receiving assistance.

“I think that means you should be a little more lenient,” says Roverud.

DeNeui says county officials started cracking down on welfare cheaters in 1975 with an internal investigator and the help of county authorities. It was in 1992 that the counties agreed to share one investigator working out of the Faribault County Sheriff’s Office.

Sundquist has held the position since Jan. 1, 2006, and her current annual salary is $41,184.

“Are the counties getting their money’s worth? ‘Yes, I think so,'” says Sundquist.