California Prisoners Got $3.5 Million from Social Security

Prisoners collected six-figure retirement payments while behind bars

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November 9, 2018

Prisoners incarcerated in California took in $3.5 million in Social Security payments from taxpayers.

The inspector general for the agency reported 123 inmates received the disability and retirement payments despite the Social Security Act prohibiting payments to individuals "confined to a jail, prison, or certain other public institutions for committing a crime."

The report, released late last month, also found flaws in the Social Security Administration's database of prisoner information, as only 69 percent of prisoners' personal information matched SSA records.

"We identified 123 inmates who received approximately $3.5 million in improper payments while they were incarcerated in [California Department of Corrections and Rehabilitation Facilities]," the inspector general said. "In 49 cases, the Social Security Administration's (SSA) Prisoner Update Processing System (PUPS) did not contain the inmates' most recent confinement information."

In 74 other cases, the database contained accurate information that the beneficiary was incarcerated, but nothing was done to shut down their benefit payments.

The audit was based on data from the California Department of Corrections of 188,000 prisoners obtained by the inspector general in October 2016.

In one case, the Social Security Administration processed and approved retirement benefits that were filed from a California state prison.

The person has been incarcerated since 2004 and is not scheduled for release until 2030. The prisoner filed for benefits in 2012 and because the government "did not contain a record of the individual's incarceration, SSA approved the retirement claim."

The prisoner collected $90,208 before the payments were shut off earlier this year.

Another retirement beneficiary continued to receive benefits after being incarcerated in 2008. Payments continued for nearly 10 years, totaling $93,528, before being suspended.

In 30 other cases, the government was "aware of the beneficiaries' confinement but did not take appropriate corrective action."

In one such case, a retirement beneficiary had their payments cut off when they were incarcerated, only to have the government issue a lump sum to the prisoner years later thinking the benefits had been canceled by mistake.

The government resumed benefits and issued $43,720 for three years' worth of back payments while the prisoner was locked up.

"SSA informed us the beneficiary's sister acknowledged the beneficiary had been in prison since 2006 and confessed to receiving and transferring the funds to a foreign country," the inspector general said. "SSA referred this case to our Office of Investigations. We estimate SSA issued $129,690 in improper payments before it suspended the payments in October 2017."

The inspector general said it alerted San Francisco Region Operations personnel, and they have "established, or were establishing, approximately $3.5 million in overpayments for these inmates."

The inspector general also checked over 130,000 Social Security numbers belonging to prisoners through the SSA database, and only 69 percent of the prisoners' personal information "matched SSA records."

Thirty percent contained no match.

"We did not determine why more than 40,000 prisoners' personal information did not match corresponding SSA records," the inspector general said. "It is possible [California Department of Corrections and Rehabilitation Facilities] data contained transposition or other data-related errors. However, it is also possible prison records included the prisoners' incorrect SSN, name, and/or date of birth information."

"Because a significant percentage of inmate information did not verify, the risk exists that inmates could receive SSA payments under one identity while being incarcerated under a different identity," the inspector general said.