CHARLES P. ALLEN, 52, of Lake Stevens, Washington, was sentenced today in U.S. District Court in Seattle to five years in prison, three years of supervised release, and $625,666 in restitution for theft of government funds.  ALLEN, the former Police Chief of Granite Falls, Washington, pleaded guilty earlier this year to stealing more than $625,000 in Social Security benefits that he was supposed to provide to more than 500 developmentally disabled clients through a company called ‘People Helping People.’  Some clients were left without money to pay for rent, food or utilities after ALLEN drained the bank accounts and abruptly shut down the company.  At sentencing U.S. District Judge John C. Coughenour told ALLEN “these were among the most vulnerable victims.”

            “This was a cynical and cruel scheme.  Mr. Allen swindled and exploited people who most needed help.  Under the phony name ‘People Helping People,’ Allen helped only himself,”  said Jenny A. Durkan, United States Attorney.  “I commend the work of the Social Security Administration-OIG, who worked not only to protect the taxpayer funds, but also the victims who rely on this safety net.”

            According to records filed in the case, ALLEN took over operation of People Helping People (PHP) from his mother in 2005.  PHP was a ‘representative payee,’ – collecting social security payments for profoundly disabled adults, to make sure the bills for their needs were paid.  These vulnerable clients did not have a family member or close friend who could provide this help.  But instead of looking after these clients, ALLEN stole their money to pay his own expenses, including gambling debts and alimony payments.  ALLEN also used the money to make excessive benefit payments to family members who worked at People Helping People, and even paid his mother a “salary” for years after she retired.  Between January of 2006 and March of 2010, ALLEN took $625,666 to which he was not entitled.   Victim impact statements revealed that even before he shut the doors to his business, ALLEN had left clients in the lurch.  One victim regularly had her utilities shut off because the bills were not paid.  When the victim tried to raise the issue with Allen, “I had the door literally slammed in my face.” Another victim stated that he lost the possessions in his storage unit because PHP failed to pay the rent.  This victim states that Allen never returned his phone calls and was “always on vacation, [and] very rude.”

            In asking for a seven year prison sentence prosecutors highlighted the hypocrisy of a former police chief stealing from some of the most vulnerable in our society.  “It is difficult to imagine a more egregious fraud than the one perpetrated by Allen.  Allen assumed a fiduciary position for a group of the very most vulnerable people in the community. Allen knew that each person in the group was disabled.  He knew that each lacked the mental capacity to manage his or her own affairs.  He knew that each person in the group lacked a trusted family member or other person willing to serve as a personal representative payee.  Nonetheless, Allen exploited his trusted position by reaching into his victims’ collective bank account and stealing hundreds of thousands of dollars of their money–and then abandoning them without notice,” prosecutors wrote in their sentencing memo.

            One of ALLEN’s former clients spoke at sentencing, telling the court how he had almost lost his housing and did lose the contents of his storage locker when People Helping People abruptly stopped paying his bills.  In the storage locker were pictures of John Dale’s children.  “How do you put a price on that?” Mr. Dale asked the court “If he were truly sorry, Allen would have helped people get new payees.”

            The case was investigated by the Social Security Administration Office of Inspector General (SSA-OIG).  The case was prosecuted by Special Assistant United States Attorney Seth Wilkinson.  Mr. Wilkinson is an attorney with the Social Security Administration specially designated to prosecute Social Security related cases in federal court.

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