Sunday, February 05, 2006

Back to Work Programs a Fraud Heaven for Scammers

We've all heard of Welfare Reform. Here are some examples of how it isn't saving the working public (who pay taxes) much money. In fact for those committing fraud, it appears to be pretty lucrative. According to reports, they may be taking in up to $5,000.00 a month without paying taxes.

Many of the people on this program, also qualify for AFDC (Aid to families with dependent children), the Food Stamp Program and possibly other free benefits.

In California alone, as reported by Troy Anderson of the Los Angeles Daily News, fraud and abuse are costing the taxpayers about 1.5 billion a year. Although this figure is being disputed by secondary sources, fraud isn't successful unless it goes undetected.

The end result from the law enforcement sources quoted is a belief that 40-50 percent of what is paid out is probably fraud.

Is it possible that some of these people have more spending power than say a "blue collar" family, who is paying for it in their taxes? Speaking of taxes, a lot of these people will qualify for
the Earned income tax credit, which can net them a few more thousand in spending power.

Here is a scary fact from the article that bespeaks a better than a "blue collar" lifestyle:

"In one case, prosecutors say a Lancaster resident conspired with relatives and friends to invent phony employment and child-care records and fraudulently obtain $345,719.

"The scam is increasingly popular in Los Angeles County, where investigators have opened more than 800 cases involving child-care fraud.

"Right now, this is the fraud du jour," said James Baker, assistant head deputy district attorney in the Welfare Fraud Division. "This is where the big money is now."

"The scam typically involves welfare-to-work recipients who fabricate employers or exaggerate work hours in order to qualify for taxpayer-financed child care. Then they split the money with friends and relatives who claim to be caring for the children, prosecutors said."

"Under reforms of the 1990s, welfare recipients qualify for government-paid child care -- usually $500 to $1,000 a month per child -- while they are looking for work or, after finding jobs, are making the transition into the work force."

For the full story by Troy Anderson, read:

Fraud eats away at funds earmarked for child care

The Welfare-to-work program is administered by the Federal Government. If there is 1.5 billion of fraud being committed in California, I would hate to estimate what the nationwide bill for all of this is. Furthermore, if in California, half of what is being paid out is a result of fraud, it's time to take a serious look at what is going on.

Don't get me wrong, we need to help those who are truly needy. BUT how much more could we help those who deserve help if half of the budget to help them wasn't being stolen by criminals? There are also the rights of those, who work hard and pay their taxes to support these social programs. It just isn't very equitable.

Speaking of social programs, it isn't hard to find reports in the news that they are over burdened and going bankrupt. The solution to this problem is greater oversight, to include aggressive prosecution of fraud and a complete review of entitlement policies and procedures.

It's not fair to make the working public pay for this sort of ABUSE!


prying1 said...

This makes me sick - How long before it gets 'fixed'. How many will sue if removed from the program and what sort of scam will take its place if it is 'fixed'?

Anonymous said...

This top down view of bashing the poor seems to have now become sport for many Americans these days, but in my ears it rings petty and hollow, especially when looked at carefully from the bottom up. I am disgusted with these accusations, blame and criticism of the poorest amongst us, and trust all who find these attacks justified, will themselves enjoy the same fate ... as those who bear the brunt of America's new agenda towards the poor.

I am ashamed this was written by Americans, about Americans who's only crime seems to be poverty, and the apathy of their fellow man

Ed Dickson said...


I respect your opinion, but if you read carefully, I am not bashing the poor. I am bashing those, who take advantage of them AND drain the resources allocated towards them.