Federal pension payments follow some retirees into the grave

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Bill Zielinski, associate director for retirement services at OPM, said even if prosecutors turn down a case, officials can still pursue administrative action to recoup debts owed to the government, including having Treasury withhold future tax returns.

Mr. Zielinski said OPM conducts weekly and annual “death match” reports, comparing its files with those at the Social Security Administration to learn about any unreported deaths. He said reports from April 1, 2010 to March 31, 2011 resulted in more than $37 million in savings to the federal retirement fund.

“Anyone that learns of the death of an individual that receives an annuity or other payment from OPM should report the death as soon as possible,” he said. “In our experience, the more timely that OPM receives the report of death, the less likely that fraud will be committed,” he said.

Persistent problem

Taxpayer watchdogs say the post-death payouts highlight a broader problem of improper payments by the federal government that involve Social Security, Medicare and Medicaid, retirement and other programs costing taxpayers billions of dollars. A 2009 report by the Government Accountability Office (GAO), noted that federal agencies reported about $72 billion in improper payments during fiscal 2008, with Medicaid accounting for nearly $19 billion alone.

“We know improper payments are rampant,” said Leslie Paige, spokeswoman for the D.C.-based Citizens Against Government Waste. “Now that we’ve got this gigantic debt and unprecedented deficits, you would hope that this would be a big issue for people. We’re bleeding money.”

Dave Williams, president of the Taxpayers Protection Alliance, said even in seemingly small dollar cases, it sends a bad message to taxpayers when a criminal case is dropped because the statute of limitations runs out.

“Whether a person is alive or dead is pretty clear cut,” he said. “It shouldn’t take five years.

Slim Chance

From January 2009 through March 2011, the inspector general for OPM uncovered fraud in more than 160 cases involving retirement payments for federal workers or their spouses who were dead. More than one-fourth of those cases were declined for prosecution, according to records reviewed by The Times. In a few cases, the statute of limitations ran out, while in others a suspect died before the investigation ended.

But most of the suspects end up in court, where prison sentences are common. One of the bigger cases in recent years involved the son of two deceased federal employees who continued receiving federal retirements checks he was not supposed to get for eight years. By the time the government took notice and halted the payments, $427,754 had been paid out.

The name of the man who collected all that cash is redacted in the inspector general’s case documents provided to The Times, but his identity can be confirmed through federal court records, which are public.

Russell B. Miller, Jr. received one year and one day in prison when he appeared in Alexandria federal court after pleading guilty to theft. His defense lawyer noted that Miller had moved in with his ailing father to care for him and that he had told the Social Security Administration about his father’s death in 1998. But he didn’t say anything to OPM, and the money didn’t stop coming.

While Miller didn’t forge any paperwork to get the money, he didn’t take any action to stop the payments, either. His attorney said in court papers that Miller, “a smart, college-educated, hardworking man,” was “very remorseful” and intended to return the money.

Though ordered to pay restitution, prosecutors acknowledged in a sentencing memo the chances of the government getting its money back were slim.

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