The husband and wife postal workers at a North Carolina mail-sorting plant were out of work and collecting disability benefits when they first came under surveillance.
Acting on an anonymous tip, agents with the U.S. Postal Service's Office of Inspector General went undercover for two months. They used video cameras to document the activities of the couple, who had claimed they could not work because sitting more than 15 minutes caused pain and swelling, records show.
The agents followed the husband and wife either alone or together driving, gambling and mowing the lawn, among other activities. The couple faced criminal charges and, after a three-day trial in January, convictions for crimes involving workers' compensation benefits.
The case wasn't unusual. The Postal Service inspector general is one of a handful of investigative agencies whose use of video surveillance to target disability fraud was singled out in a recent congressional report. The Government Accountability Office (GAO), the investigative arm of Congress, disclosed the surveillance practices as part of a broader review of workers' compensation fraud controls at a half-dozen agencies across government.
The Transportation Security Administration (TSA) has an internal affairs unit to review potential fraud and make referrals to investigators, who in turn conduct video surveillance, according to the GAO.
The GAO also said the Air Force plans to hire staff early in fiscal 2012 to perform background checks and conduct surveillance to make sure recipients are entitled to benefits. And a recent Navy investigation noted in the same report how one workers' compensation recipient was "an active owner of a gentleman's club" while fraudulently collecting disability benefits.
Still, the GAO also found that agencies face challenges investigating and prosecuting such cases. For one thing, so-called "targeted investigations" can be costly and resource-intensive, the GAO said. What's more, the "limited resources" of some federal prosecutors make it hard to bring fraud cases involving less than $100,000, the Postal Service inspector general's office told the GAO.
Other Defense Department investigative agencies, meanwhile, told congressional investigators that they don't normally invest resources to investigate workers' compensation fraud, citing higher priority areas such as violent crime and anti-terrorism.
Still, successful cases "can help deter future fraud and ultimately save money," the GAO found.
In another case, which the Postal Service's inspector general cited recently in a separate report to Congress, agents used video surveillance to investigate a former postal custodian in Bell, Calif., who was collecting workers' compensation while doing home improvement projects and loading plywood onto a truck.
A Michigan letter carrier collecting workers' compensation was seen regularly exercising at the local YMCA "where she was observed bending, twisting, weightlifting and performing various activities beyond her stated disabilities," according to an inspector general report.
And in Pennsylvania, a letter carrier pleaded guilty in June in yet another workers' compensation case. The employee picked up heavy boxes and sacks of asphalt, officials said. Out of work since 1994 because of a back injury, the employee had worked in the auto shop for five years, according to investigators.
Christopher Slobogin, a Vanderbilt University professor and privacy analyst, said government agents should be free to observe a suspect in public places as long as they have a good reason.
"If the government is going to try to prevent fraudulent behavior, then it has to be able to to investigate potential fraud ... so long as the government has some reason to suspect that behavior and the surveillance is a public activity," he said.
But he said government agencies shouldn't dispatch surveillance investigators to conduct random spot checks of workers' compensation recipients.
"The government should have some justification," he said.
In the North Carolina case, the investigation began after the Postal Service's inspector general received an anonymous tip through its fraud hot line, according to the U.S. Attorney's Office for the Western District of North Carolina.
The couple, identified in court documents as Charles and Robin Smith, were videotaped engaging in wide range of activities that prosecutors said exceeded the physical limitations laid out in their disability claims.
An attorney for Charles Smith, who was sentenced to three months' probation, declined to comment Wednesday. Defense attorneys had sought to have the case dismissed after the verdict, arguing that the video clips obtained by investigators did not reveal Charles Smith's level of pain.
U.S. Attorney Anne M. Tompkins said in a statement on the case following trial in January that the investigation helped save more than $1 million.
Overall, from April 1, 2010, to Sept. 30, 2011, the Postal Service inspector general told Congress in a recent report that its workers' compensation fraud investigations resulted in $65 million in savings, with 19 arrests and 60 personnel actions, including removals, suspensions and termination of benefits.
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