Social Security fraud
US federal offences under 42 U.S.C. § 408 targeting the Social Security system
Social Security fraud is, in US federal law, an umbrella term for criminal acts directed against the American social security system, primarily criminalised under 42 U.S.C. § 408. The term does not describe one single, delimited offence provision, but a range of related offences all concerning misuse of Social Security benefits or Social Security information.
The central provision, 42 U.S.C. § 408, criminalises the making of knowing and intentional false statements of material significance in connection with an application for benefits — the legal requirement being that the act was committed 'knowingly and willfully'. The provision also covers concealment of circumstances affecting a person's entitlement to benefits, diversion or misuse of another person's benefits, and the use of false Social Security numbers or identity information in order to obtain payments to which one is not entitled.
The penalty under 42 U.S.C. § 408 is typically a fine and/or imprisonment for up to five years per violation. In cases involving health professionals or medical statements made in a professional capacity, the penalty may be increased to up to ten years. Cases of the latter type are particularly relevant in connection with disability fraud, where doctors or lawyers systematically produce false medical documentation.
In the context of cases such as the Eric Conn case — the largest documented Social Security fraud scheme in American history — the term refers specifically to organised fraud against the Social Security Disability Insurance (SSDI) programme. The pattern there was that a lawyer, working with a hired medical consultant and a corrupt administrative law judge, systematically produced false medical documentation in order to have thousands of applicants approved for disability benefits they were not entitled to. The fraud amounted to more than 500 million dollars in unwarranted payments over a number of years.
Social Security fraud is typically investigated by the SSA's Office of Inspector General (OIG) and federal prosecutors, and charges are often brought in combination with related federal offences such as wire fraud and money laundering under 18 U.S.C., depending on the specific circumstances of the case.
