Welfare Fraud Law
Millions of people in the United States rely to some extent on public assistance programs, collectively—and sometimes disdainfully—referred to as “welfare.” The U.S. Census Bureau estimated in 2011 that 49.1 million people in the U.S., about sixteen percent of the total population, are living in poverty. Wages are not keeping up with increases in the cost of living for many people, and these are the people who are most likely to benefit from welfare programs.
The welfare system has many critics, and the documented instances of welfare fraud fuel many of their arguments. Definitive statistics on the extent or cost of welfare fraud are notoriously difficult to come by, with low-end estimates of one or two percent of all claims being fraudulent. Fraud offenses generally involve a scheme to defraud a person, business, or government agency through false representations or false pretenses, as opposed to outright theft. A typical welfare fraud scheme involves submitting false or misleading information to a government agency in order to obtain a benefit. Welfare fraud is similar to insurance fraud in the sense that it targets a specific program or policy.
Public Assistance Programs in the U.S.
“Welfare” covers an array of government programs addressing issues like families with children, food insecurity, and disaster relief. States administer several federal programs using federal funds. These include the Temporary Assistance for Needy Families (TANF) program, which provides monetary assistance to families with dependent children, with the goal of getting them off public assistance through employment; and the Supplemental Nutrition Assistance Program (SNAP), which provides assistance for food purchases and is still commonly known as the “food stamp” program. Other federal assistance programs include Medicaid, Supplemental Security Income (SSI), and various disaster-relief programs.
Social Insurance Programs
Some government benefits are known as “social insurance,” because they are based on payments into the system made by an individual or their employer. These include state and federal unemployment insurance, Social Security benefits, and Medicare. While they are not generally considered part of the “welfare” system, fraud involving these programs, particularly unemployment insurance fraud, may still be included in the category of welfare fraud.
Welfare Fraud Statutes
The federal government may investigate and prosecute welfare fraud under the federal mail fraud and wire fraud statutes. Both statutes include enhanced penalties for fraud involving benefits paid in connection with federally-declared emergencies or major disasters.
State laws may address welfare fraud more specifically. Welfare fraud in the first degree under New York law consists of and fraudulent act that results in more than $1 million in public benefits. Fraudulent schemes in New York that bring in $1,000 or less may be prosecuted as welfare fraud in the fifth degree.
Examples of Welfare Fraud
The most famous case of welfare fraud, perhaps, is that of Linda Taylor, who allegedly inspired the “welfare queen” concept used by critics of welfare programs to this day. She was indicted by prosecutors in Illinois on thirty-one counts, including fraud and perjury, for allegedly obtaining more than $100,000 using as many as eighty false identities. She was convicted of four counts of fraud and perjury in 1977.
One of the largest cases of welfare fraud occurred in California, when a woman named Barbara Williams was accused of using at least nine aliases, eight drivers licenses, and numerous fake birth certificates to open ten separate cases under a program similar to TANF. She claimed more than seventy fictitious children as dependents, resulting in over $239,000 in benefits. She was convicted and sentenced to eight years in prison in 1978.
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