Feds Bust Massive Puerto Rico Disability Scam

Federal agents on Wednesday arrested dozens of people in Puerto Rico in what may be one of the biggest disability scam busts ever. 

The Puerto Rico U.S. Attorney's Office says three doctors—Wildo Vargas, Rafael Miguez Balseiro, and Erica Rivera Castro—allegedly charged nearly 70 people between $150 and $500 to claim they were disabled. 

"The claimants who defrauded the [Social Security Administration] by feigning medical disabilities, and the physicians who provided false medical justifications for these claimed disabilities, are perpetrating a theft of public funds." said U.S. Attorney Rosa Emilia Rodríguez-Vélez. 

The government says it will go after $1.7 million from Torres Crespo, a former Social Security worker who was allegedly in on the scam. 

Lawmakers were outraged and are calling for investigations into the Social Security Disability Insurance (SSDI) program. 

"That such fraud could occur in the first place raises serious and troubling questions regarding Social Security's management of the disability program," said Rep. Sam Johnson (R-TX).

The number of Americans receiving disability benefits has exploded in the last decade. In 2003, 7.6 million were on disability. In 2012, 10.9 million received a total $136.7 billion in taxpayer-funded benefits—a level of spending nearly twice as large as the food stamp program. When the costs of health care for disability workers are included, federal spending on disability swells to $260 billion.

According to federal agents, Puerto Rico is considered a hotbed for disability fraud. In 2006, 36% of applicants were approved. By December 2010, 69% of Puerto Ricans who applied for disability received it. Over 33% of Puerto Rico residents on disability qualified by claiming they could not work due to "mood disorders."

While the Puerto Rico sting is a step in the right direction, other studies suggest disability fraud is a serious and growing problem. An investigation by National Public Radio (NPR) found that in Hale County, Alabama, for example, one out of every four working-age adults collects a disability check—a figure far out of proportion with nationwide disability rates. Liberal New York Times columnist Nicholas Kristof concedes the disability program has created "soul-crushing dependency."

Last week, a study found that more people now receive disability than live in New York City.

According to the White House, "workers on SSDI [Social Security Disability Insurance] rarely return to the labor force."


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