Bill Mercer, United States Attorney for the District of Montana, announced today that during a federal court session in Missoula on December 18, 2009, before U.S. District Judge Donald W. Molloy, MARY EUDORA RAY, a 37-year-old resident of Lolo, pled guilty and was sentenced on the charge of theft of federal government funds.

RAY was sentenced to a term of:

• Home Arrest: 9 months

• Probation: 5 years

• Special Assessment: $100

• Restitution: $120,370

In an Offer of Proof filed by Assistant U.S. Attorney Carl E. Rostad, the government stated it would have proved at trial the following:

RAY applied for Disabled Adult Child (DAC) Social Security benefits based upon the death of her deceased step-father in February of 1994. She was approved for benefits and began receiving DAC payments on August 3, 1994.

In September of 1994, she received a large retroactive payment dating back to December of 1992, her date of entitlement for DAC payments. RAY claimed a disability based upon one or more mood disorders.

RAY had married R.L. in Davidson County (Nashville), Tennessee on March 29, 1991. That marriage was annulled in November 1992. Her application for DAC benefits came in November 1994 and was retroactive to December 1992, after the annulment. Because RAY'S marriage to R.L. occurred before she began receiving DAC benefits, it did not affect her eligibility for the program.

However, RAY subsequently married J.B. on August 2, 1997, in Will County (Joliet), Illinois. That marriage, in August 1997, ended her eligibility for DAC benefits. DAC benefits from SSA would have been completely discontinued had the marriage been revealed to the agency. J.B. and RAY later divorced.

On October 9, 2004, RAY married M.S. This marriage is also recorded in Joliet, Illinois. Immediately after the marriage, M.S. and RAY lived with his parents in Joliet. They moved to Hamilton in July of 2005 and then to Lolo in approximately May of 2006.

On April 6, 2009, a search of SSA electronic files for any statements submitted by RAY regarding her marital status revealed only one form. On the form, RAY failed to report her marriage to M.S., despite specific questions regarding her marital status.

M.S. and RAY have joint bank accounts and have combined their income to pay monthly household bills. RAY has used the name Mary Schram.

RAY was interviewed and admitted to both of her disqualifying marriages, that she was aware of her obligation to reveal them to SSA, and that she intentionally failed to do so.

As a result of her concealment and misrepresentations as to household composition and legal relationship, SSA paid RAY $99,842 in federal benefits for which she was not eligible or otherwise entitled.

The couple has also received Supplemental Security Income (SSI) for RAY'S daughter from her first marriage. RAY served as her daughter's payee for the SSI payments. RAY'S marriage would have also disqualified her daughter as an eligible recipient under the SSA program in which her daughter participated. During the investigation it was determined that RAY had also not been truthful in the application process for her daughter's SSI benefits, in that, RAY made false statements concerning the makeup of the household and living arrangements. RAY acknowledged in an interview that this was intentional so that a larger benefit payment would be approved.

As a consequence of RAY'S concealment, her daughter received - with RAY as representative payee - $20,528 in SSA benefits which she would not have been eligible for, or received, had the truth of the family's composition been disclosed.

The total loss to the Social Security system attributable to RAY'S fraudulent scheme was $120,370.

Because there is no parole in the federal system, the "truth in sentencing" guidelines mandate that RAY will likely serve all of the time imposed by the court. In the federal system, RAY does have the opportunity to earn a sentence reduction for "good behavior." However, this reduction will not exceed 15% of the overall sentence.

The investigation was conducted by the Social Security Administration - Office of Inspector General.

A copy of the Offer of Proof can be obtained by contacting Sally Frank at (406) 247-4638.

 

 

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