March 21, 2012
Department of Justice
United States Attorney William C. Killian Eastern District of Tennessee
Kingsport Couple Plead Guilty to Social Security Fraud
GREENEVILLE, Tenn. - Kelsey Lee Jones, 58, and Kathy Wilson Jones, 52, both of Kingsport, Tenn., pleaded guilty in U.S. District Court in Greeneville, to committing Social Security representative payee fraud. Sentencing has been set for September 6, 2012, at 9:00 a.m. Kelsey and Kathy Jones, who are married to each other, face up to five years in prison, $250,000 fines, up to three years on supervised release, $100 mandatory assessments, and restitution as ordered by the Court.
According to the information and plea agreements on file with the U.S. District Court, in 2005 Kelsey Jones became Representative Payee for a disabled relative of Kathy Jones, with responsibility for the relative’s care and disbursement of his disability benefits. From December 2005 to August 2009, Kelsey and Kathy Jones converted $37,338 in Social Security Disability benefits from the relative’s use to their personal use. Among other acts, Kelsey Jones admitted that he submitted materially false accountings of the funds he received, to the Social Security Administration (SSA), opened a mutual fund with himself and the disabled relative as joint tenants with right of survivorship, collected an unallowable administrative fee for his services as representative payee, and failed to pay the nursing home bills of the benefits recipient. Among other acts, Kathy Wilson Jones admitted that she prepared materially false accountings which were sent to the SSA, redeemed funds for her personal use from the mutual fund her husband established, and used an ATM card issued to the benefits recipient to withdraw funds from his bank account for her personal use.
The Office of Inspector General, Social Security Administration, investigated the fraud. Assistant U.S. Attorney Helen Smith represented the United States.