News and Press Releases

plumbing company owner pleads guilty
to $140,000 social security fraud

September 9, 2011

KANSAS CITY, Mo. - Beth Phillips, United States Attorney for the Western District of Missouri, announced that a Centerview, Mo., man pleaded guilty in federal court today to receiving nearly $140,000 in federal disability benefits while he and his wife operated a plumbing company.

Kody Ray Erisman, 35, of Centerview, waived his right to a grand jury and pleaded guilty before U.S. District Judge Howard F. Sachs to a federal information that charges him with theft of government money.

According to today’s plea agreement, Erisman and his wife, Danelle, conspired to conceal his work activity from the Social Security Administration as part of a scheme to fraudulently obtain a total of $139,967 in disability payments.

Kody Erisman applied for disability benefits in November 2001 and was determined in March 2002 to be medically disabled and unable to work due to anxiety-related disorders and affective mood disorders. These disability payments included auxiliary benefits for Kody Erisman’s wife and four children.

The Erismans created a company doing business as D.E. Plumbing in October 2003. They intended to create a company that appeared to be owned and operated exclusively by Danelle Erisman, but in reality, Kody Erisman was a full-time employee who did extensive labor and managed the company’s employees.

Between 2003 and 2005, Kody Erisman worked on well over 50 projects for various customers. The company’s contracts ranged from small projects to large sub-contracts for the installation of onsite wastewater treatment systems for real estate developers. Investigators witnessed him performing physical labor at job sites, and there were photos of him operating heavy equipment.

The company’s revenues usually ranged from approximately $11,000 to $70,000 per month.

In addition to the disability payments, the Erismans received $500 in economic stimulus payments that were intended for individuals who were eligible for Social Security benefits under the American Recovery and Reinvestment Act of 2009. The total loss to the government was $140,467.

Under federal statutes, Erisman is subject to a sentence of up to 10 years in federal prison without parole, plus a fine up to $250,000. A sentencing hearing will be scheduled after the completion of a presentence investigation by the United States Probation Office.

This case is being prosecuted by Special Assistant U.S. Attorney Trey Alford. It was investigated by the Social Security Administration – Office of Inspector General.

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