Who's really ripping ME off?

AUGUSTA — Early last year, the national media turned its gaze to Maine and the tawdry story of a Zumba-instructor-turned-prostitute in the affluent seacoast village of Kennebunkport.

Associated Press file photo

Alexis Wright

submitted photo

Maine Attorney General Janet Mills.

Sun Journal file photo

Maine Gov. Paul LePage

Sun Journal file photo

State Rep. Peggy Rotundo, D-Lewiston.

Maine.gov photo

State Sen. Roger Katz, R-Augusta.

Individual Maine welfare fraud cases closed in 2013

1. Lori Boutot (Kennebec County) stole $80,752 in TANF and food stamp benefits by lying about where she was working, where she was volunteering, where she was going to school, where she was living and who was baby-sitting her children. She was sentenced to five years, with all but 20 months suspended, three years of probation and $80,752 in restitution.

2. Alexis Wright (York County) stole $40,848 in TANF and food stamp benefits by under-reporting her income and assets. She was charged with one count of theft by deception and four counts of unsworn falsification for welfare fraud, as well as a myriad of other tax and prostitution charges. Pursuant to a plea agreement, the felony theft was reduced to a misdemeanor and the unsworn falsification charges were dismissed. Wright was sentenced to 10 months in jail, with a consecutive sentence of 364 days, all suspended, one year administrative release, $57,280 in restitution ($40,848 payable to DHHS and $16,432 payable to Maine Revenue Services) and a $1,000 fine.

3. Trudy Caouette (Oxford County) stole $1,428 in food stamp benefits while employed at DHHS by issuing money to fictitious accounts. She pleaded guilty to theft by deception, misuse of identification and tampering with public records or information. She was sentenced to 364 days, with all but 30 days suspended, one year of probation and up to $1,428 in restitution, with credit to be given for payments already made to DHHS.

4. Jeremy Gagnon (Kennebec County) stole $19,171 in food stamp, TANF and MaineCare benefits by falsely claiming that his two minor children were living with him. He pleaded guilty in October 2012. He was later sentenced to two years, with all but six months suspended, two years of probation and $19,171 in restitution.

5. Lisa Hinkley (Androscoggin County) attempted to obtain benefits by falsely claiming that her boyfriend was not in the household and by reporting less income. She pleaded guilty to two counts of aggravated forgery and one count of attempted theft by deception on Jan. 11, 2013. She entered into a one-year deferred disposition (which is still active), with requirements that she complete 200 hours of community service work, complete any counseling recommended by her provider and continue her education. If successful, the state will reduce the felonies to misdemeanors and will agree to a capped sentence of 30 days in jail. If not successful, the felony pleas will stand and she will serve 45 days in jail and pay a $500 fine.

6. Tiki Thomas (Androscoggin County) stole $24,788 in TANF and ASPIRE benefits by failing to disclose that she was receiving direct-paid child support from the father of her child. She was sentenced to three years, with all but five months suspended, two years of probation and $24,788 in restitution, pursuant to a plea agreement.

7. Eric Riddle (York County) obtained $9,933 in food stamp benefits and $22,242 in Supplement Security Income benefits by falsely claiming he was not married to Elinor Riddle. He pleaded guilty to two counts of theft by deception and one count of unsworn falsification on Feb. 11, 2013. He entered into a two-year deferred disposition (which is still active), with the sole condition that he pay restitution at the rate of $25 a month to DHHS. If the DHHS restitution is paid in full prior to the end of the deferred sentence, he is to begin paying the same amount at the same rate to the Social Security Administration. If successful, the state will reduce the felonies to misdemeanors. The defendant will receive an unconditional discharge and a stand-alone restitution order will be put in place joint and several with Elinor Riddle for the balance of any restitution owed to DHHS and Social Security. If not successful, the felony pleas will stand and it is an open plea. 

8. Elinor Riddle (York County) obtained $9,933 in food stamp benefits and $22,242 in Supplement Security Income benefits by falsely claiming that she was not married to Eric Riddle. She pleaded guilty to two counts of theft by deception and five counts of unsworn falsification on Feb. 11, 2013. She entered into a two-year deferred disposition (which is still active) with the same terms as Eric Riddle’s deferred disposition. 

9. Michael Knowlton (Androscoggin County) was charged with one count of misuse of a public benefits instrument for possessing his father’s girlfriend’s electronic benefits transfer card without DHHS’s authorization. He pleaded no contest in Lewiston District Court on Feb. 12, 2013 and was fined $100.

10. Susan Jamison (Oxford County) was convicted in 2011 of one count of theft by deception and one count of aggravated forgery for receiving $8,800 in benefits. In 2012, her probation officer filed a motion to revoke her probation after she failed to make regular restitution payments. She was sentenced to seven days in jail and granted a stay of execution. When Jamison did not report to the jail, she was indicted on one count of failure to report. On May 8, 2013, she pleaded guilty and was sentenced to five days with credit for time served, pursuant to a plea agreement. While she was on bail, Jamison had consistently reported to Maine pretrial, had undergone substance abuse counseling and had started school to become a CNA.

11. Callie Ollis (Androscoggin County) was charged with one count of misuse of a public benefits instrument for possessing another individual’s EBT card without DHHS’s authorization. She pleaded guilty in Lewiston District Court and was fined $100.

12. Lisa Brochu (York County) entered into a deferred disposition in 2012 for allowing her roommate to use $497 of her food stamp benefits while she was incarcerated. Brochu successfully completed the deferred disposition by paying full restitution and received an unconditional discharge on a theft by deception charge on June 18, 2013.

13. Sonja Engstrom (Aroostook County) stole $363 in TANF benefits by falsely claiming that her minor daughter was living with her. She pleaded guilty to one count of aggravated forgery and one count of theft by deception on May 28, 2013, and was sentenced to one year, with all but 60 days suspended, one year of probation and $363 in restitution.

14. Johanna Cooley (Kennebec County) stole $9,789 in food stamp and TANF benefits by falsely claiming that her children were living with her. She was sentenced to one year, with all but four months suspended, one year of probation and $9,800 in restitution, pursuant to a plea agreement.

— Source: Office of the Maine Attorney General

The exploits of Alexis Wright, including the fact that she managed a client list of more than 100 people and often secretly videotaped her encounters with her customers, were making national news. So, too, was the news that Wright — who earned more than $100,000 a year in her illegal trade — was receiving welfare benefits from the state of Maine. 

Wright, a single mother at the time, was later found guilty of defrauding the state to the tune of more than $40,000 in welfare benefits, a part of the case that went largely overlooked.

Wright's crimes fetched the high-profile treatment of an international celebrity, but the amount she bilked from Maine's welfare coffers wasn't even close to what the state would recover from another fraud case involving Medicaid funds, which was announced 10 months later.

This time the crook wasn't a small-town prostitute, but a multinational medical device and pharmaceutical manufacturer.

In November 2013, Johnson & Johnson agreed to pay the federal government $2.2 billion to resolve criminal and civil allegations involving the marketing of off-label, unapproved uses of three prescription drugs.

Maine, according to a report in the Washington Post, would recover $2.8 million from the case, which involved alleged kickbacks to doctors and pharmacies for promoting a trio of drugs — two anti-psychotics and one heart medication.

The settlement funds, according to the Office of the Maine Attorney General, would serve as restitution for state Medicaid funds used to pay for the unapproved medications.

And while you could hardly avoid the news about Wright, the settlement with Johnson & Johnson blipped under the radar screen of most of Maine's media.

Comparing the two cases, and the attention — or lack of — they received helps emphasize and lend context to a letter sent last month to state legislative leaders by Maine Attorney General Janet Mills.

In her letter, Mills urged lawmakers to be fair.

"There is a great deal of talk this election year about welfare fraud," Mills wrote. "I hope we put this issue in perspective, that we make sure we apply the rule of law fairly and uniformly, that we go after big fish as well as small, and that we not elevate one over the other."

Over the past three years, Maine judges have ordered individuals who have defrauded benefit programs to repay $488,303. That's an annual average of $162,767.

On the provider side, the state has seen restitution set at $18.7 million over the past four years, an annual average of $4.6 million.

Mills said Thursday that welfare-recipient fraud is dominating the political conversation, not only in Maine but across the country.

"But people aren't talking about the big welfare fraud, which is provider fraud," Mills said.

"We shouldn't ignore eligibility fraud," she said. "We shouldn't ignore recipient fraud; we shouldn't ignore any allegations that somebody is getting state or federal benefits who isn't really eligible for them, but the big fish are the corporations, the major pharmaceutical companies and the providers that have been ripping off the state Medicaid program for years to the tune of millions of dollars."

And, according to Mills, the restitution orders the state has so far been able to get on the provider side "is only the tip of the iceberg."

The message comes on the heels of a recently launched campaign by the administration of Republican Gov. Paul LePage to castigate individuals who have withdrawn cash benefits with state-issued electronic benefit transfer cards at questionable locations around the country.

The cards, which function as bank debit cards, are loaded with a range of financial benefits from the state, including child support payments, food stamp benefits and cash benefits under the federal Temporary Aid to Needy Families program.

The EBT campaign is part of LePage's efforts to ferret out abuse and fraud in Maine's welfare system. 

Mills said that effort could be fruitless because the things LePage has been focusing on, the EBT side, may not even be crimes under state and federal law.

"The statute made it a disqualifier, but it's not a crime," Mills said. "It may be a civil violation, but it's not a criminal offense. When you steal millions of dollars from the taxpayer through the same program, that's a crime."

Peter Steele, LePage's communications director, said the governor is equally concerned about provider fraud and the focus on EBT card abuse is simply a new initiative. 

"Nobody's looked for this fraud in the past," Steele said.

He said LePage has been equally forceful on provider fraud, yet in 2012 his Department of Health and Human Services commissioner, Mary Mayhew, rejected a legislative proposal that would have installed more oversight and better surveillance and auditing of Medicaid payments to health care providers.

State Rep. Peggy Rotundo, D-Lewiston, House chairwoman of the Legislature's budget-writing Appropriations Committee, said the proposal is again being debated and will be part of the ongoing debate over the state's supplemental budget.

Rotundo said a study by the National Conference of State Legislatures that focused on Medicaid fraud by providers found the problem was huge and that states had varying measures in place to protect against it and to recover misappropriated health care benefits.

The study also showed that nearly 75 percent of all health care fraud was committed by medical providers.

Meanwhile, a 2012 PEW Center brief on the issue, found that about 7 percent of all federal Medicaid funds — an estimated $19 billion per year — is absorbed by improper payments, including "fraud and abuse as well as unintentional mistakes such as paperwork errors." On the states' side, the figure is almost 9 percent of Medicaid funds, an estimated $11 billion based on 2010 figures, PEW found.

Rotundo said if LePage is serious about catching and prosecuting provider-side fraud, he would support installing new checks on the Medicaid system in Maine that would help root out abuse.

"We have to be able to find them and establish the controls within DHHS to do that," Rotundo said. She estimated the annual cost to the state of making the changes would be between $100,000 and $200,000.

She said the issue has been a perennial recommendation of the state's auditors. The measure suggests that the state contract with a private company to look each year for fraud within the health care benefits system. She said the state could achieve the same result by installing new software systems and by training an individual to operate them.

She said placing too much emphasis on the recipients of individual benefits without an equal focus on the provider side is not only unjust, but costly.

"If the focus is solely on those who are receiving those benefits and not on those who are providing them, then there is not a clear message that fraud is not to be tolerated amongst anyone," Rotundo said.

Other lawmakers, including several Republicans, agreed with Rotundo.

State Sen. Roger Katz, R-Augusta, assistant minority leader, is the co-author of a bill that would expand eligibility for the state's Medicaid program under the federal Patient Protection and Affordable Care Act. 

The bill adds two new investigators to the state's health care fraud unit. Katz said those investigators are meant to focus on both providers and recipients.

"Clearly, the larger dollars we need to be concerned about are from health care providers," Katz said. "But there is a principle at stake here, too, and that is that nobody should be ripping off the system."

Rotundo, Katz and other lawmakers said the issue of recipient fraud resonates politically because it's the kind of thing everyday people believe they are witnessing.

"It's much closer to home when someone believes that the person living four doors down is ripping off the system," Katz said. "It's hard to understand and see the faraway corporate behavior."

The state has limited dollars, Katz said, "and we want to make sure they are getting to the people who need them and providers are paid fairly, but only what they are entitled to and no more."

sthistle@sunjournal.com

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Comments

It's easy to understand why

It's easy to understand why there's little interest in going after provider fraud in our current administration. for one, Mary Mahew is from the provider sector, and is probably hoping that she can go back to it after her boss loses the election. Don't want to do anything that might jeopardize that. And second... well, coroporations are LePage's friends (except the ones that aren't, like StatOil), so why would he want to upset his friends?

MARK GRAVEL's picture

16.

16. SSI recipients!

FRANK EARLEY's picture

Hey Mark,

Your back, Long time no hear...........................................

CLAIRE GAMACHE's picture

The cost

One thing not mentioned in this article is how much the state of Maine has spent in the last three years to collect this money from individuals. I don't condone welfare fraud but I also don't think it is smart to spend hundreds of thousands of tax dollars to recoup a few thousand. It would be smarter to hire people to check more closely the money awarded in the first place. Prevention would be cheaper than the cure especially when the odds of recouping anything are slim and none. It is even dumber to put these folks in jail if they don't pay up. Then we are paying even more.

PAUL ST JEAN's picture

You don't condone prosecution

You don't condone prosecution and you don't want to jail them. What would Judge Gamache DO with them?

MARK GRAVEL's picture

What would Judge Comrade do?

What would Judge Comrade do? Take more of you hard earned money.

PAUL ST JEAN's picture

That seems to be a reasonable

That seems to be a reasonable assumption.

MARK GRAVEL's picture

Any update on St. Joseph's

Any update on St. Joseph's church?

PAUL ST JEAN's picture

Nothing new. It's still

Nothing new. It's still standing and no signs of heavy equipment lurking in the wings. Looks like the 'church savers' have been successful.
I saw in the Journal last week, though, that St. Patrick's Church (also shut down) had been sold to an investor "from away" at a bargain basement price of around $165K. That building is amazing from an architectural standpoint. The new owner's plans are yet to be announced.

FRANK EARLEY's picture

I think there are a couple missing..............

15. Paul LePage, used $69,120.00, of money from the Temporary Help for
Needy Families account. For personal gain.

16. Paul LePage used $124,000.00 earmarked for MaineCare, used for
personal gain.

17. Paul LePage, used an additional $731,000.00 of taxpayers money, for
personal gain.

For the life of me, I can't figure out how a sitting Governor can on one hand provoke a war on welfare fraud, then turn right around and intentionally use money, already earmarked for assisting the poor, without so much as a request. That is not how I would want my tax money used, and I really think his just spending it with no transparency is no less criminal as 1 thru 14 above.
I'm just curious, does he, or will he be responsible for replacing the TANF money at least???????????????

JERRY ARIPEZ's picture

They also need

to check his off shore accounts for those monies still accumulating interest off those monies before he used them, and his!

FRANK EARLEY's picture

I think there are a couple missing..............

15. Paul LePage, used $69,120.00, of money from the Temporary Help for
Needy Families account. For personal gain.

FRANK EARLEY's picture

I think there are a couple missing..............

15. Paul LePage, used $69,120.00, of money from the Temporary Help for
Needy Families account. For personal gain.

MARK GRAVEL's picture

How about those working the

How about those working the SSDI system?

FRANK EARLEY's picture

You trying to insinuate something??????????

You go apply for SSDI. Lets see how far you get. Or should I say, how fast your denied over and over and over again..........

JERRY ARIPEZ's picture

He's using that big brush again

that resembles his mouth, when he picks on the few to attack the many....

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