United States Attorney Jenny A. Durkan
Western District of Washington
Seattle Couple Pleads Guilty To Defrauding Aid Programs Intended For The Poor
Couple Lived in Waterfront Home, Traveled Widely and Bought Expensive Jewelry
A Seattle couple pleaded guilty today to theft of government funds for defrauding state and federal benefit programs intended to provide a safety net for the poor and vulnerable, announced U.S. Attorney Jenny A. Durkan. The chiropractor, DAVID SILVERSTEIN, 60, and his long time live-in partner, LYUDMILA SHIMONOVA, 53, will pay more than $261,000 in restitution plus an additional civil penalty of $216,441. In all they will pay two and a half times the total fraud they perpetuated on the Department of Housing and Urban Development (HUD), and will reimburse both the Social Security Administration and the Washington State Department of Social and Health Services (DSHS) for the fraudulent benefits they obtained. U.S. District Judge Ricardo S. Martinez scheduled sentencing for September 21, 2012.
“Today we ensured this couple will not profit from their flagrant greed,” said U. S. Attorney Durkan. “In addition to a significant financial penalty, we will ask the judge to impose prison time. They stole resources that should have gone to the truly needy, illegally taking the place of others in a housing program with a long waiting list. This conduct hurts people who need assistance and weakens public support for a vital safety net. I commend HUD and SSA for the work done to protect the public interest in this case.”
According to the plea agreements the couple began defrauding HUD in 2003, when they falsely claimed that SILVERSTEIN was SHIMONOVA’s landlord who was accepting rent for her and her two children to live at his waterfront property. SILVERSTEIN fraudulently stated that he was not living at the house and posed as SHIMONOVA’s landlord, not her romantic partner. SILVERSTEIN used the address of his chiropractic practice on correspondence with HUD to conceal the fact that he was living in the waterfront property. SILVERSTEIN collected more than $1,250 each month as rent payments from HUD on behalf of SHIMONOVA. The couple even went so far as to submit a fraudulent “Eviction Notice” in October 2003, so that they could collect $750 in emergency rent assistance as a “damage deposit” on the home. SHIMONOVA and SILVERSTEIN lied about their living circumstances to qualify for the HUD benefits.
SHIMONOVA further lied about her personal financial circumstances to qualify for food and medical benefits from DSHS, as well as Social Security Disability payments. These programs are available only to people with less than $2,000 in total assets. Beginning in 1995, SHIMONOVA claimed to have no assets other than a small balance in a checking account. In fact she had a life insurance policy with a cash value exceeding $2,000 making her ineligible for assistance. In 2003, after beginning her relationship with SILVERSTEIN, she continued to lie about her resources. In annual reports to DSHS and Social Security she claimed poverty while owning a platinum and diamond ring appraised at $12,500 and diamond earrings worth $17,000. She also owned certificates of deposit of more than $30,000. Any one of these assets disqualified her from the assistance programs. Between 1999 and 2011 she fraudulently collected $84,000 from DSHS. Between 2005 and 2011 she fraudulently collected $60,124 from Social Security.
Theft of government funds is punishable by up to ten years in prison and a $250,000 fine.
This case was investigated by the Department of Housing and Urban Development Office of Inspector General (HUD-OIG), the Social Security Administration Office of Inspector General (SSA-OIG) and the Department of Social and Health Services Office of Fraud and Accountability.
The case is being prosecuted by Special Assistant United States Attorney Seth Wilkinson. Mr. Wilkinson is an attorney with the Social Security Administration specially designated to prosecute fraud cases in federal court. The civil litigation in this case was pursued by Assistant United States Attorneys Harold Malkin and Kayla Stahman.