Social Security Fraud Scheme Leads To Federal Conviction And Almost $42,000 In Restitution
The United States Attorney's Office announced that on March 20, 2014, FLORENCE IRENE JARA, 52, of Billings, was ordered to serve a term of five years of probation, pay $41,984.60 in restitution to the Social Security Administration, and perform 275 hours of community service, by U.S. District Judge Susan Watters.
In the prosecution's sentencing memorandum, Assistant U.S. Attorney Chad C. Spraker told the Court that Patricia Lennon was the beneficiary of Title II Social Security Administration (SSA) benefits, also known as the Old Age, Survivors and Disability Insurance (OASDI) program. Under the OASDI program, Patricia Lennon's son was also entitled to OASDI benefits. Lennon was appointed by SSA to be her son's representative payee, a position created by SSA when a beneficiary is unable to handle his or her own affairs due to age or disability. Patricia Lennon's son was entitled to benefits until he was eighteen, but as a minor, his benefits generally had to be paid through a representative payee accountable to SSA's rules. Prior to her death on May 19, 2010, Lennon added Jara as a joint account holder on a Valley Federal Credit Union account into which SSA was depositing the OASDI benefits. SSA, unaware of Patricia Lennon's death, continued making monthly deposits of approximately $1100 for Patricia Lennon and $1000 to Patricia Lennon as her son's representative payee.
In or about September 2011, SSA sent a representative payee accounting form to Lennon. Receiving no response, SSA suspended the $1000 monthly payment for Patricia Lennon's son. On March 2, 2012, a Valley Federal Credit Union employee called SSA to inquire about the benefits being deposited into the account. After discovering that Patricia Lennon had died, SSA requested a return of the OASDI benefits deposited into the account. Valley Federal Credit Union froze the account and called Jara concerning SSA's request to reclaim the benefits. Jara falsely claimed that she had already notified SSA of Patricia Lennon's death. On July 19, 2012, Jara was interviewed by federal investigators at her home in Billings. Jara stated that she knew Patricia Lennon was receiving SSA benefits and for her son when Jara was added to the VFCU account. After September 2010 Jara began spending the SSA money for her own personal needs. According to the Presentence Report, Jara later admitted that over the course of 18 months, she personally spent $18,000 in SSA funds.
In her interview with law enforcement agents, Jara further stated that she knew it was wrong to take the SSA benefits after Patricia Lennon's death, and she should have gone to SSA. Nevertheless, she also claimed that a probate attorney told her not to tell SSA about Patricia Lennon's death until after Jara obtained guardianship of Patricia Lennon's son. On August 21, 2013, a federal agent interviewed the attorney who advised that he had attempted to carry out Patricia Lennon's instruction to establish Jara as the guardian of Patricia Lennon's son, but the guardianship was never implemented. The attorney advised the agent that he never spoke with Jara, but if he had, he would have never instructed her not to report Patricia Lennon's death to SSA, as that is generally one of the first things he advised his clients to do.
The investigation was conducted by the Social Security Administration, Office of Inspector General.