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Part-time fraud investigator gets full-time results in Scott

April 7th, 2007 9:06 pm by CLIFFORD JEFFERY

GATE CITY - In a back office of the Social Services Department in Gate City sits one of the commonwealth's best fraud investigators.

Carolyn Elliott is no police officer, but she catches criminals part time at a rate that would make a beat cop blush with envy.

Elliott is a full-time employee of Scott County Social Services, but due to budget cuts she only works part time as the department's fraud investigator.

A Gate City native, Elliott was the oldest of five children and, although she thinks her family may have qualified for assistance when she was growing up, she never knew what welfare was until she started working for social services in 1979.

Elliott worked with customers, determining their eligibility for services initially.

While she still calls them customers, Elliott talks about the social services customers who strayed to the wrong side of the law and are being indicted for fraud.

Elliott began working as a fraud investigator in 1991 and became a full-time investigator in 1992. In recent years, the department's budget has been cut, and Scott County was permitted only one part-time investigator. That has not stopped Elliott from sending about 20 notices each month. Each letter notifies social services customers that Elliott believes they are committing fraud.

If they show up, or call, Elliott said they can repay the amount taken through misrepresentation.

Two hundred and fifty dollars can often be repaid in one lump sum, Elliott said. When the amount is $2,500, that may not be possible. Both cases would amount to a felony, but one would likely be handled administratively, and the other would likely go to court.

From April 2006 to March 2007, Elliott completed 230 investigations, almost 300 percent of the number required by the state for the fraud position.

Of the 230 completed cases, many were found to be mistakes. Only 35 required any action. Of those 35, 19 were handled administratively within social services, and 16 were prosecuted in court.

"Sometimes it is unintentional on the part of the client, and sometimes it is our mistake," she said.

There is a limit on the number of misdemeanors which the court will take, she said. But Scott County Commonwealth's Attorney Marcus McClung will prosecute all the felonies that Elliott brings him.

McClung said Elliott makes it easy.

"She has everything I need in her reports - witnesses with contact information, listings of evidence. I just have to submit it to the grand jury," he said.

"I don't take anything to court that I don't feel I have the evidence to convict on it," Elliott said. "I want a track record of convictions, and that is why the majority of our cases plead. Only three cases have gone to trial. One of those, the judge threw out on a technicality. The other two ended in convictions."

Elliott investigates cases involving Temporary Assistance to Needy Families (TANF), Medicaid and food stamps.

Most of the cases Elliott investigates deals with unreported income, or an overreported family.

Either there is someone living in the home who has a job and that person is not reported, or children are reported who do not actually live in the home, Elliott said.

In recent years, social services restrictions on aid has become more lax. As it became easier to collect, there are fewer instances of fraud.

At one time, Elliott would get up before light and drive to a home where she believed a customer underreported the family members with income. She wrote down the license numbers of the vehicles at the home and did a check on the owners.

If there was a boyfriend or girlfriend there at 5 a.m., there was good reason to believe they lived there.

Finding out if a child who was reportedly living in the home actually lived there required less work, she said.

"I'll call the bus driver and the neighbors. If the bus driver isn't picking him up at that home, that's an indication the child doesn't live there."

People do not necessarily lie on the reports submitted to social services, Elliott said. Sometimes it is a case of not updating the agency in a timely manner if a customer's circumstances have changed.

Elliott once investigated a woman who, through falsified reports, received almost $25,000 in which she was not qualified through all three programs, TANF, Medicaid and food stamps.

But most cases involved much smaller sums, between a couple hundred dollars and about $3,000.

About 70 percent of Elliott's investigations start with people calling to report abuse, she said.

Of those, a small fraction will go to court, but many more are handled administratively. The customer is ordered to pay back the money and may be disqualified from receiving any social services aid.

"The first time you are convicted of food stamp fraud, you are disqualified for a year, 24 months for the second offense, and permanently for the third offense," she said.

For fraud of TANF, the perpetrator is disqualified for six months on the first offense, 12 months on the second, and permanently for the third offense.

Most customers who commit an offense never have another problem, Elliott said.

There are three people in Scott County who can never receive services again, Elliott said.

While Elliott is not sure how much has been refunded by customers who, after committing fraud, have returned the social services money, Elliott has saved the Scott County office about $60,000 through preventative procedures.

If an applicant files for aid and the form does not add up, the eligibility staff member refers the case to Elliott for a front-end investigation. Doing investigations before payments are made, Elliott has found $60,000 worth of inconsistencies.

Those customers can also face disqualification, Elliott said. Disqualification also saves taxpayer money.

When a customer is disqualified for a year, that is a year's worth of services that are not being paid. That could amount to several thousand dollars, she said.

About 20 people a year are disqualified, a total of 350 since 1992.

"With about 110 agencies across the state, that comes out to a lot in the state," she said.

If a person receiving benefits says they cannot repay money that Elliott finds was not warranted, the money can be recouped through garnishment of the benefits. If the customer is not receiving benefits anymore, Elliott can contact the IRS and have the money returned through tax returns.

"Money isn't usually collected through court action," she said.

In-house collections work better. Probation and parole agents are also used.

"Most of the time, people fail to report their total income, or their total household. We used to count vehicles and property, and bank accounts," she said.

Elliott believes she has access to more information than most of her customers believe.

Through a growing bank database and networks of employment information, Elliott can find out within seconds if a person is hiding assets.

In some cases, customers have tried double dipping - collecting from both Virginia and Tennessee, she said.

"I found a bank account with unexplained deposits," Elliott said.

Those were traced back to social services in Tennessee.

"We get a lot of reports and have access to a lot of systems," she said. "We have so many newer systems and new ones coming online that, if they try and hide something, we will find them eventually."

The majority of cases are unreported income, she said. In a recent case taken to the grand jury, a customer said she was the only one in the household with a job. But a new computer search program showed another employed person was living there.

In an interview, Elliott discovered that there was over $3,000 in food stamp overpayments.

A mystery novel buff, Elliott confesses that she likes thinking like a detective when it comes to the fraud work. But once a person is caught, Elliott turns from hard-nosed investigator into helpful social worker. She once counseled a woman about what services she qualified for in the lobby of the courthouse moments after the woman pleaded guilty to fraud.

The number of cases completed by Elliott makes her the state's top social services fraud investigator.

"Customers have heard that the state doesn't do anything if they are caught," but that is not true, Elliott said. "It goes on their record. They are convicted of a felony. On the first offense, we usually don't ask for a felony conviction because we are the agency that is supposed to help people get back on their feet, and it isn't going to help them if they have a felony offense. The second offense - forget it."

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