Social Security may have overpaid $19M to fraudsters

The Social Security Administration potentially made $19 million in overpayments in one of its income security programs in 2010, according to a government watchdog report released Wednesday.

But though the waste outlined is significant, the Government Accountability Office’s report suggest another potential weakness in America’s employment infrastructure. In some cases, red flags went up when multiple employers across state lines listed the same Social Security number for an employee.

Many causes, fraudulent undocumented workers among them, may be causing the overpayments, report author Seto Bagdoyan said.

“It’s kind of difficult to generalize who the culprit really is,” Mr. Bagdoyan said. “It could be an employer collaborating with an employee under a wrong SSN or it could be an employee misrepresenting himself to an employer.”

“The aggregate you see there has the potential for both scenarios,” he added.

It’s even possible that multiple undocumented workers are hiding behind the same name and Social Security number with different employers. In one case, an individual whose listed residence was in California was supposedly employed at eleven locations in Washington, Illinois, Indiana, Mississippi, Alabama, Florida and Pennsylvania (none of the supposed employers were located in California).

Because of this possibility, GAO recommends that Immigration and Customs Enforcement connect with Social Security in the future to add employment data to its investigations.

ICE has “a worksite enforcement strategy, and we met with one of their entities and they were definitely interested in the data on the aggregate level,” Mr. Bagdoyan said. “It’s the sort of thing they encounter once in a while on a case-by-case basis, but if SSA can share this information in the aggregate, that would be a net benefit to” ICE.

The most recent revision ICE’s worksite enforcement mandate from 2009 stipulates that agents pursue prosecutions of businesses employing illegal immigrants. However, Mr. Bagdoyan added that he had not heard previous suggestions in his career that ICE and Social Security, which has pertinent data on all workers in the US, collaborate.

GAO’s report focuses on Supplemental Security Income, which disburses disability payments to workers with low incomes; the agency only examined income and employment information while conducting this audit.

However, a wider audit conducted internally at Social Security estimated $3.3 billion improper payments for the supplemental income after it looked for additional indications of fraud in individuals’ real estate, financial assets, living arrangements and pensions in the same year.