Mills assures her office is prosecuting all forms of welfare fraud

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Maine’s top lawyer said in an open letter released Monday that state prosecutors would continue to clamp down on all forms of welfare fraud while suggesting that some people might be tempted to exploit the problem during an election year.

Maine Attorney General Janet Mills was responding to a letter from state legislative leaders who urged her office to investigate possible use of electronic benefits transactions (EBT) cards at commercial venues, such as smoke shops and liquor stores, where welfare funds should not be spent.

Maine Speaker of the House Mark Eves and Senate President Justin Alfond wrote to Mills last month after Gov. Paul LePage’s office issued a press release highlighting data compiled by the Department of Health and Human Services that showed roughly 3,000 EBT transactions over a three-year period were flagged because they were conducted on the property of Maine businesses that sell products that welfare money shouldn’t be used to purchase. Democrats noted those questionable transactions, while worthy of investigation, comprised a small fraction of the total number of EBT transactions.

While Mills wrote that she agreed with the governor and legislative leaders that spending of welfare dollars should be restricted, she also noted that a cash benefit on an EBT card can be spent on anything and only the welfare recipient knows exactly what was purchased.

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“Whether anybody has ever used EBT funds withdrawn from an ATM in any bank or store or other facility to purchase a pint of coffee brandy is beyond my direct knowledge, although I would not be surprised if this has occurred,” she wrote in her letter dated Feb. 14. “Such behavior, of course, is socially unacceptable and fiscally irresponsible.”

Mills drew attention to her aim in 2010 to redouble her office’s efforts to prosecute welfare fraud by hiring an additional lawyer to work directly with DHHS to “ferret out and pursue the theft of public benefits.”

Training of investigators at DHHS was beefed up to enhance the likelihood of criminal convictions, she wrote. Since then, her office has successfully prosecuted 37 cases of DHHS fraud, resulting in “significant” jail sentences and orders of restitution totaling nearly $500,000.

State laws also have changed since then, she wrote.

In 2012, the unauthorized transfer of EBT cards was criminalized, along with use of the cards at liquor stores, casinos and strip clubs. But that law doesn’t specify whether the use of ATM machines at such businesses are prohibited.

When asked by a Sun Journal reporter whether Mills interprets that state law to include a prohibition on ATMs at those facilities, Mills’ spokesman, Timothy Feeley, replied Monday by email, simply, “Yes.”

Asked whether Mills’ office is taking any additional steps aimed at prosecuting EBT fraud at prohibited places, Feeley replied, “We are taking all reasonable steps.”  

In her letter, Mills pointed out that her office has secured civil judgments and criminal penalties against dozens of individuals and business entities for tax evasion and tax fraud over the past three years, totaling nearly $1.1 million.

Financial fraud cases resulted in jail sentences as well as restitution totaling more than $730,000, Mills wrote.

Moreover, pharmaceutical companies and health providers who “inappropriately” bill DHHS have been caught and prosecuted, she wrote.

While prosecution of welfare recipients is more visible and the subject of greater public debate, provider fraud is also a “very high priority for us,” she wrote.

“These providers steal millions of dollars from the public purse and seriously undermine the public trust in our MaineCare program,” Mills wrote.

The state’s HealthCare Crime Unit has recovered more than $55 million in fraud from state and federal programs over the past three years, she wrote.

“There is a great deal of talk this election year about welfare fraud,” she concluded in her letter. “I hope that 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.”

cwilliams@sunjournal.com

Attorney General Janet Mills’ Letter to Alfond Eves 2014-02-14

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