U.S.
House of Representatives - March 16, 2006
Committee
on Ways and Means
Subcommittee on Social Security
Statement for the
Record
Social
Security Number High-Risk Issues
The
Honorable Patrick P. O'Carroll, Jr.
Inspector General of the
Social Security Administration
March 16, 2006
Good morning, Chairman McCrery, Congressman Levin, and Members
of the Subcommittee. This is our fourth hearing in this series on high-risk
Social Security number (SSN) issues, and I applaud your efforts and dedication
in giving these issues the attention they deserve. The SSN is a key to American
life in many ways, and as we have seen throughout this series of hearings,
its misuse has repercussions that cause a ripple effect across the American
landscape.
Much of my testimony in the first three hearings has centered on largely
administrative issues. At the first hearing, we discussed enumeration, the
process by which the Social Security Administration (SSA) issues SSNs; at
the second hearing, we discussed SSN misuse in the context of misreported
wages, particularly by foreign-born workers without authorization to work
in the United States; and, at the third hearing earlier this month, we discussed
enumeration of foreign-born individuals and the payment of benefits to those
born or residing abroad.
Today, I would like to discuss our investigative efforts to combat SSN misuse
in all forms. Our Office of Investigations (OI) is dedicated to preventing
and detecting fraud against SSA's programs and operations, and SSN misuse
is an important facet of that overall investigative effort. Obviously, with
finite resources, and with many areas of responsibility, including program
fraud, employee fraud, contract fraud, and others, we are mindful that our
primary responsibility is to protect the Trust Funds that provide benefits
to millions of Americans every month. At the same time, our responsibility
to protect the integrity of the SSN cannot be overstated. We strive continuously
to strike an appropriate balance.
To give you some sense of how we strike that balance, consider that in Fiscal
Year (FY) 2005, the Office of the Inspector General (OIG) received about 85,000
allegations of fraud, 84 percent of which involved fraud against a Social
Security program, such as disability insurance benefits. Approximately 13
percent-almost 11,000 allegations-involved SSN misuse. It is important to
understand that these SSN misuse allegations are limited to incidents of SSN
misuse involving a Social Security program or otherwise directly related to
the administration of the Social Security Act.. Allegations of pure identity
theft, financial fraud, and other non-SSA-related crimes are referred to appropriate
sources, and are not included in this total.
Looking at actual investigations conducted during FY 2005, OI opened approximately
9,500 cases, of which 79 percent involved crimes against Social Security programs,
while just over 16 percent involved SSN misuse. Thus, while we actually investigate
a higher proportion of allegations in the SSN misuse category than in the
program fraud category, we still invest more than four times more resources
in program fraud than in SSN misuse. The results of an audit we will issue
shortly, in which we provide an estimate of the rate of overpayments in Social
Security's disability programs, underscores the importance of our emphasis
on program fraud. Our statutory mission is to protect SSA programs and operations,
and to the extent that an allegation of SSN misuse does not touch on those
programs, our resources do not generally allow us to pursue it.
We do, however, play a role in the overall government effort to protect against
SSN misuse in a multijurisdictional context. Our affirmative and aggressive
approach to SSN misuse of this type is designed to maximize our resources
through the effective use of task forces, workgroups, and other cooperative
efforts.
At this time, our investigators across the country are members of almost
200 task forces and workgroups in all ten of our field divisions. These groups,
comprised of Federal, State, and local law enforcement agencies, pool resources
and, when permitted, share information to accomplish more than each member
could ever accomplish on its own. The groups range from Joint Terrorism Task
Forces run by United States Attorneys, to white collar crime groups, to financial
fraud workgroups.
The work done by these groups is astounding. For example, our agents on the
Central Florida Identity Theft task force, a group comprised of ten law enforcement
agencies, concluded a case last year in which they apprehended fifteen members
of an identity fraud ring who would obtain lists of individuals with good
credit histories, and use the personal information of those individuals to
defraud a variety of commercial entities in the Orlando area. Twelve of the
fifteen individuals arrested were sentenced to prison terms, and the total
restitution ordered to victims exceeded $2 million.
In another case, our New York Field Division, working on a task force with
other agencies including the U.S. Secret Service, investigated the hijacking
of a deceased Social Security beneficiary's bank account. The complex investigation
revealed that the subjects not only continued to receive the deceased woman's
benefits-totaling some $80,000-but also used her bank account to launder counterfeit
checks created with the help of a corrupt bank employee. They then went on
to steal other SSNs and identities and open additional accounts, which they
would use both to create additional fraudulent checks and to launder them.
In all, they cashed about $300,000 in bad checks and opened credit card accounts
from which they stole another $100,000.
Since cases like this represent an opportunity to achieve a significant return
with only minimal investment of resources-our agent in this ten-agency task
force still maintains a "normal" caseload-we can afford to contribute
substantially to the overall effort to stop SSNs being used as instruments
of a crime. If each of the 200 task forces in which we participate makes only
a few cases like this each year, we are able to have a far greater effect
than we could ever have working alone.
However, our day-to-day program-related SSN misuse caseload is no less daunting,
and our solo work is equally impressive. We see allegations of SSN misuse
in its myriad forms come in every day by phone, fax, e-mail, and in electronic
referrals from SSA employees. One such referral from an SSA District Office
concerned a woman who was confronted by SSA with the fact that she appeared
to be receiving disability benefits under two separate SSNs. Each set of benefits
was going to the same name, the same address, and for the same disability,
but under two different SSNs. The woman informed SSA, and subsequently our
investigators, that she had a twin sister. Despite the fact that both sets
of benefits were going to the same address, the woman alleged that she and
her identical twin were estranged and did not speak.
Our investigators obtained a copy of the woman's birth certificate from the
state vital records office. It showed that hers had been a single birth, not
a twin birth. Additional investigation uncovered no other evidence that a
twin had ever existed. Our investigators asked the woman to provide a copy
of her birth certificate, and she eventually provided the same document we
had obtained from the state without her knowledge. It had the same control
number and the same signatures, but the altered copy she provided showed a
twin birth. We recontacted the vital statistics office and confirmed that
no official change had been made since we'd obtained our copy. The woman,
unaware that we had her original birth certificate, continued to demand that
her duplicate benefits be reinstated, even going so far as to write to her
Congressman to demand that he intercede on her behalf. We showed the Congressman
the two versions of the birth certificate, and that ended the woman's ill-conceived
mission.
In another case, our investigation revealed that a woman had been working
full-time since 1978 under one SSN and receiving Title XVI disability payments
since 1973 under a second SSN. From 1978 until 2001, she worked full-time
for various healthcare agencies while certifying each year to SSA that she
was not working. In 2001, the woman applied for Title II disability benefits
under the first SSN, based on her extensive work history. A Title XVI claims
representative recognized the woman during her appointment to apply for Title
II benefits, and referred the case to OIG. She later admitted to OIG agents
that she had been working for 23 years while receiving Title XVI payments.
She eventually pled guilty to theft of government funds and making false statements,
and was sentenced in May 2005 to 6 months' incarceration in federal prison,
6 months' home detention with an electronic monitoring device, and 5 years'
probation, and was ordered to pay full restitution of $166,767.
While SSN misuse cases like these are made by our investigators every day,
we encounter cases involving counterfeit Social Security cards much less frequently.
The practical reality is that most of us were issued our Social Security cards
not long after we were born, and we long ago committed our SSNs to memory.
But the cards themselves were probably placed in a drawer or box many years
ago, and have rarely been seen or used since. Almost every entity imaginable,
from government, to medical facilities and insurance carriers, to creditors,
to employers and beyond may and often do ask for SSNs; but rarely, if ever,
do they ask to see the card itself.
Our work reviewing SSA's automated employee verification services, such as
the Social Security Number Verification Service (SSNVS), further underscores
this reality. Employers seeking to confirm the SSN of a current or prospective
employee need only take advantage of this service to go online and match the
employee's name, SSN, date of birth, and gender against SSA's records-all
without ever laying eyes on an actual Social Security card. Of course, for
verification services such as SSNVS to be truly effective, we must be confident
that the information in SSA's databases is as accurate as possible, and our
prior audit work has revealed that this may not always be the case. Nevertheless,
SSNVS and other verification services even further minimize the need to carry
or present the card. Indeed, today, the card is little more than a "hard
copy" of a number that is already contained in various databases throughout
society and government. This is consistent with the purpose for which the
card was created 70 years ago, and while there should always be security enhancements
made to stay one step ahead of tech-savvy counterfeiters, it would be hard
to justify the expense involved in replacing all Social Security cards with "hard" cards
as long as their utility remains as limited as it is.
From time to time, there is talk of expanding the card's use beyond its current
functions, and obviously, this issue is one for Congress to debate. If a decision
is made to transform the Social Security card into something more than it
is, significant improvements may then have to made in the document. Moreover,
it could create a significant new workload for SSA-one that might fall outside
of the Agency's current and historical function, or even further heighten
the tension between service and integrity.
Whatever Congress may determine is an appropriate role for the Social Security
card to play, our office is happy to provide whatever audit and investigative
work might prove helpful. In the interim, we will continue our tireless efforts
to prevent and detect misuse of the Social Security number as well as the
Social Security card itself.
www.socialsecurity.gov
