The Supplemental Security Income program: the welfare state's black hole

USA Today (Society for the Advancement of Education), Nov, 1995 by Christopher M. Wright

Fraud and corruption. Dishonest "middlemen" often help people fill out and process application forms. In 1993, Hour Bun Khy was arrested in California in a sting operation involving Cambodian immigrants, crooked psychiatrists, and SSI. State undercover agents, wired for sound, went to Khy's office pretending to need help qualifying for SSI benefits. The Orange County Register reported that Khy told the agents, "I need to teach you how to lie." He coached them to tell the government that the communists killed their families and to pretend to suffer from headaches, depression, and insomnia.

The next step was to identify a cooperative psychiatrist who would sign a bogus certificate of mental impairment. Khy would act as interpreter during the disability determination process in exchange for a portion of the applicants' retroactive lump-sum awards.

At a 1994 Congressional hearing, witnesses testified that a single dishonest interpreter can generate hundreds of nearly identical bogus claims. For instance, all 300 patients at one clinic were diagnosed as "mildly mentally retarded" in boilerplate psychological reports. A consulting psychologist hired by California Medical authorities concluded that the reports had a "numbing sameness to them."

Over the years, scam artists have discovered a multitude of ways to defraud the SSI program. Their methods include filing multiple claims under bogus Social Security numbers, feigning disabilities--sometimes with the help of professionals, and concealing financial assets or a return to work. There also are stories of representative payees spending program money on themselves after the recipient dies. Fraud appears to be deeply rooted within the culture of the program, as the following examples illustrate:

A California woman was convicted of murdering three of seven SSI beneficiaries found buried in the yard of her boarding house. She had been charged with killing all seven, plus two found elsewhere, for their benefits. The woman had impersonated one of the victims in attempting to obtain Dalmane, a drug found in seven bodies.

In New York, a disability recipient was sentenced to prison and ordered to make restitution of nearly $300,000. Posing at various times as a psychiatrist, neurologist, attorney, and real estate agent, he filed false medical reports to SSA that resulted in fraudulent SSI and disability benefits for his "patients."

An Iowa man was sentenced to $4,980 restitution for defrauding the SSI program. He applied for benefits in 1984, claiming blindness and unemployment after being hit on the head with a baseball bat during a barroom brawl. He pled guilty to fraud after learning that an investigator made videotapes of him working in a warehouse unloading semi-tractor trailers, operating a forklift, and reading computer invoices, as well as driving his car on public streets.

Seeking reform

The truth--that there is no reliable way to separate the deserving from the undeserving--was lost in the passage of disability programs, but no longer can be denied. Currently, SSI uses a definition of disability that is fluid and expands under pressure. Predictable and relentless expansion of the eligibility criteria allows more and more people to qualify as disabled.