Identity theft and its impact on rates of welfare fraud

Each year, applicants end up receiving government benefits they otherwise would not qualify for as a result of engaging in welfare fraud. Whether it be a result of either inadequate or inconsistent monitoring, lawmakers argue welfare fraud has reached pandemic status across the United States.

Among one of the longest standing strategies used by welfare fraudsters in applying for benefits is using identities of deceased individuals. In Illinois alone, an audit of the state’s Medicaid beneficiaries found nearly 14,000 deceased individuals were still receiving benefits, some for as long as 663 days after their death. And, in Arkansas, of the 500 deceased still receiving benefits, 69-percent had passed away at least two years prior.

Although easily preventable, many instances of welfare fraud, like this, slip through the cracks as a result of a lack of due diligence being done to properly verify an applicant’s eligibility. Other cases, though, are less to blame on improper verification, but instead is fraud perpetuated by sophisticated identity theft criminal rings and others who have conspired to receive benefits through dishonest means.

In many states, there are waiting lists of people who are either financially insolvent or disabled who are waiting to qualify for benefits so that they can receive much-needed treatment or services. Prosecutors track down and punish those they allege to have defrauded the welfare system in hopes of discouraging criminals from taking much-needed benefits away from segments of society that are most vulnerable.

To ensure that benefits don’t fall into the wrong hands, many states have begun integrating both state and federal databases across a number of different departments. This integrated platform, in turn, searches employment and wage earnings data, reviews lottery winnings records, and death records at much more regular intervals and flags any issues of concern.

States that have enacted this type of anti-fraud detection initiative have been successful in saving the government billions as compared to those that have not. And, as far as the voters at large are concerned, a recent Foundation for Government Accountability study shows that more than 75 percent of voters support this effort to reduce government waste as well.

If you or someone you know has been accused of having engaged in welfare fraud or some other type of federal offense, an Orange County, California, white collar crime attorney can provide advice and guidance in your legal matter.


Source:, “The welfare fraud pandemic and one way to fix it,” Nicholas Horton, March 14, 2017

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