14 in Eastern Ky. allegedly defrauded Social Security, Medicaid of more than $1 million

bestep@herald-leader.comAugust 24, 2012 

Fourteen Eastern Kentucky residents defrauded Social Security and Medicaid out of a total of more than $1 million, a federal grand jury has charged.

Many of the people concealed the fact that they lived with their spouse — making it appear they had less financial support than they actually did — in order to qualify for disability benefits, according to a news release from U.S. Attorney Kerry B. Harvey.

Several of the fraud cases involved the federal Supplemental Security Income program, commonly called SSI.

The program provides cash payments to elderly or disabled people with little income and few assets.

In Kentucky, people who qualify for SSI also automatically get Medicaid, a health care program for poor people funded mostly by the federal government.

The indictments announced Friday alleged that people got assistance from both programs that they weren't eligible to receive.

For instance, 65-year-old Francis Terry, of McCreary County, allegedly concealed the fact she lived with her husband, Albert, while improperly receiving $82,159 from SSI and $120,792 in Medicaid benefits between September 1997 and April 2012.

Albert Terry, 70, was indicted with his wife. The two told representatives of the Social Security Administration they'd lived apart for 20 years, when they hadn't, the indictment alleged.

A grand jury in London charged three couples and eight individuals in 11 separate indictments. The cases were not related.

It's not unusual for a group of similar cases to be presented to a grand jury at the same time to "maximize resources and impact," a federal spokesman said.

The alleged fraud described in the indictments took place over long periods in several cases.

Henrietta Winchester, 65, of McCreary County was charged with illegally getting more than $120,000 in benefits between 1989 and July 2012 by failing to disclose she lived with, and received support from, her husband Denver, 70.

The two also were charged with lying to federal employees. They allegedly said they had lived apart since 1991, according to the indictment.

The others charged were Novella Lawson, 60, Whitley County; Earl, 63, and Rebecca Johnson, 60, Whitley County; Lula Lewis, 64, Leslie County; Patty Justice, 60, Pike County; Herman Caldwell, 65, Bell County; Frank Holland, 66, Perry County; Sarah Binder, Laurel County; Sasha DeHart, 25, Pike County; and Alice Cole, 54, Pike County.

The Johnsons allegedly received more than $73,000 in survivor benefits for a grandchild in their care but used the money for their benefit, not the child's.

Caldwell was charged with concealing that he had a job while he got $104,888 in federal disability payments between 2003 and 2008.

Caldwell told a representative of the Social Security Administration he hadn't worked since 1996, and that someone must be using his Social Security number fraudulently, the indictment said.

The health care fraud and theft charges in the indictments have a maximum penalty of 10 years in prison. Charges of Social Security fraud and lying carry a top sentence of five years.

Federal and state authorities announced last September that they had created a cooperative investigations office in Lexington to try to root out fraud in federal disability programs.

In a news release at the time, authorities said people could report possible fraud by calling (800) 269-0271 or online at http://oig.ssa.gov/report-fraud-waste-or-abuse.

Bill Estep: (606) 678-4655.Twitter: @billestep1

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