Social Security anti-fraud program ensnared poor with massive fines – The Washington Post

Deckman didn’t have the money. So the Social Security Administration garnished the entire $704 check she was going to receive every month when she retired from her minimum-wage job flipping burgers at the convenience store in her local Rebel gas station. She can apply for retirement in 2032 — when she’s 83.

The inflated fees were set in motion during the Trump administration, when attorneys in charge of a little-known anti-fraud program run by the inspector general’s office levied unprecedented fines against Deckman and more than 100 other beneficiaries without due process, according to interviews, documents and sworn testimony before an administrative law judge. In doing so, they disregarded regulations and deviated from how the program had recovered money since its inception in 1995, failing to take into account someone’s financial state, their age, their intentions and level of remorse, among other factors.

The sums demanded by the government stunned those accused of fraud. The unusual penalties were not the only break with how the Civil Monetary Penalty program had previously been conducted: Unlike in the past, the chief counsel also directed staff attorneys to charge those affected as much as twice the money they had received in error, on top of the fines, interviews and court testimony show.

The escalating penalties created a giant jump — at least on paper — in the amount of money the inspector general could show lawmakers it was bringing in, according to interviews and sworn testimony obtained by The Washington Post. Fines as high as hundreds of thousands of dollars were imposed on poor, disabled and elderly people, many of whom had no hope of ever being able to pay.

A Chicago woman was fined $132,000 after wrongly receiving as much as $10,618 in benefits, according to internal data of penalties and assessments obtained by The Post. A Denver woman was sanctioned $168,000 after cashing as much as $14,960 in wrongly received checks. A New Jersey woman is on the hook for nearly $435,000 after she accepted about $47,000 in benefits but failed to report a $120,000 house she inherited from her father and car loans she co-signed for her children, on what she said was a lawyer’s advice.

Over a seven-month period ending in mid-2019, 83 people were charged a total of $11.5 million, the documents obtained by The Post show — a jump from less than $700,000 for all of 2017. It is not clear whether that is a full accounting of those affected by the practice of imposing stepped-up fines, which was halted by the inspector general’s office last year amid ongoing whistleblower complaints.

This account is based on interviews with 18 current and former Social Security employees, congressional officials, advocates for the disabled and beneficiaries, some of whom spoke on the condition of anonymity because they were not authorized to speak publicly.

Inside Ennis’s office, two officials raised concerns about the fees to her and her top staff, according to interviews and court testimony: Deborah Shaw, considered the program’s most knowledgeable, experienced attorney, who testified in September that she was directed by her bosses to issue penalties she found unconscionable; and veteran senior executive Joscelyn Funnié.

After they repeatedly pressed to have cases reexamined and the penalties lowered, Shaw and Funnié were escorted out of the agency’s headquarters in Woodlawn, Md., in September 2019 and placed on paid leave. Ennis then fired Funnié, who had also raised separate concerns to her about what she believed were improper hiring actions she took and directed that Shaw, who was also threatened with suspension, be demoted, according to hearing transcripts and people familiar with their cases.

In a May 6 ruling, Judge Craig A. Berg found that Shaw was the victim of a “prima facie case of whistleblower reprisal” by Ennis’s office and ordered the agency to restore back pay and benefits and reinstate her as a supervisor.

Shaw “has shown that she had a reasonable belief she was disclosing an abuse of authority when she raised issues with the drastic increase in penalties the [Civil Monetary Penalty] program was assessing …” Berg wrote in a 68-page decision. He found “significant evidence” that Ennis and her top staff “had motive to retaliate” against Shaw as she became a “vocal advocate” to reopen 83 cases whose penalties she believed were excessive.

In a email to The Post, Shaw said, “As a 27-year public servant who cares deeply about the Inspector General’s oversight mission, I had no choice but to speak up when I witnessed the corruption of an anti-fraud program I helped build.”

Shaw testified that she was shocked when she was directed in early 2019 to issue a penalty of $176,000 to a woman who had already written a check for $26,000 to repay the government the entire amount she had wrongly received in disability benefits. Before she was placed on leave, Shaw was able to dismiss or settle about 23 cases with high proposed fines that were already in the appeals process. But that left at least 83 cases that she thought merited review, interviews and testimony show.

Funnié was out of work for almost two years before she settled a similar claim of retaliation late last year with Ennis’s office, which had originally told her she was being fired for asking for a postponement in a court case. She is now back as a special adviser, but her duties have been restricted to tasks below her experience level, according to two people familiar with her situation. Funnié declined to comment.

Ennis’s staff issued new guidelines for the fraud program beginning late last year after the whistleblowers lodged their concerns, recommending a single fine of $2,300 to $7,000 in cases where the accused settle. But scores of those who came under scrutiny in 2018 continue to owe disproportionately high fines.

“Any penalties that impact poor people that don’t take into account their circumstances are unfair, particularly when there are policies in place that require this,” said Jonathan Stein, a longtime disability advocate who is of counsel to Philadelphia-based Community Legal Services.

Ennis’s office, with a $112 million budget, published 46 staff audits and reports of Social Security operations and performance in 2021, interviews and records show — less than two-thirds of its output in 2017 and 2018. Some early pandemic oversight work took a year to get underway.

Dozens of senior auditors, investigators and other staff have quit or retired, many in frustration with what they describe as Ennis’s mercurial leadership and lack of focus on the office’s mission, according to current and former staff members. The Office of Audit has lost 35 auditors since March 2019, almost double the number who resigned in the prior three years. In recent months, multiple supervisory law enforcement agents and the heads of investigations and digital evidence units quit, following an exodus in which some took demotions to accelerate their departures.

Ennis, in her statement, said she is committed to addressing issues affecting employee morale, which dipped to its lowest point since 2014 in a new survey of the federal workforce. She cited expanded recruitment efforts, particularly to find diverse job candidates, regular meetings to foster informal engagement and other efforts. Her spokeswoman, in an email, blamed the departures on a “normal and expected increase in attrition” as a result of leadership changes and the shift to remote work during the pandemic.

Civil fines provide an alternative when fraud is considered too insignificant to warrant criminal prosecution by the Justice Department. The fines act, in theory, as a deterrent to misconduct. Starting in 2015, Congress allowed the office to update the maximum penalties by a small amount each year in line with inflation. By 2018, the cap was $8,250, meaning that someone could be charged that amount for each wrongly received benefit check. But until the Trump administration, the full amount was rarely — if ever — imposed, according to people familiar with the program. Doing so was viewed as excessive punishment for a low-income and disabled population, according to current and former employees.

Twice a year, the inspector general reports to Congress how much money it has assessed to those it has accused of wrongdoing. By 2017, the amount had plummeted to less than $1 million from a peak of $20 million years earlier, according to the reports.

Gangloff directed his staff to increase penalties, attributing the demand to pressure from Stone and from lawmakers on Capitol Hill, according to current and former employees, who said they did not have any indications that lawmakers were concerned about how much the program was recovering. Stone declined to comment.

The counsel also did away with the financial disclosure forms the office had sent for two decades to those it accused of fraud in order to determine how much they would be charged. Deckman, for example, said she did not receive a form asking her to list the details of her finances, even though the final letter she received in July 2018 laying out what she owed said it was taken into account.

DePiero, 55, said she has learning disabilities and back pain stemming from a leg damaged from birth. A single mother of five children, she had fought through eight years of appeals to win a $1,600 monthly benefit. Soon before her final appeal was heard, her parents died, DePiero said, and she asked the lawyer she had hired on contingency if inheriting their homes would put her benefits in jeopardy. He told her not to worry about it, she said. But while inheriting one house did not count against her benefits, the second did, along with several vehicles for which DePiero said she was signatory for car loans for her children.

Her disability checks were diverted to pay her debt. DePiero found work during the pandemic in warehouses loading boxes, but back pain caused her to quit. She now lives on a monthly $1,502.70 disability check from UPS, she said. It will take her more than 22 years to pay back what the inspector general’s office told her she owes the government.