HEARING ADVISORY: Chairman Johnson Announces Hearing on Social Security Disability Fraud Conspiracy in Puerto Rico

B-318 Rayburn House Office Building at 2:30 PM
September 12, 2013 — Hearing Advisory   

U.S. Congressman Sam Johnson (R-TX), Chairman of the House Committee on Ways and Means Subcommittee on Social Security, today announced a hearing on the Social Security Disability Insurance fraud conspiracy in Puerto Rico.  The hearing will take place on Thursday, September 19, 2013, in B-318 Rayburn House Office Building beginning at 2:30 p.m.

In view of the limited time available to hear witnesses, oral testimony at this hearing will be from invited witnesses only.  However, any individual or organization not scheduled for an oral appearance may submit a written statement for consideration by the Subcommittee and for inclusion in the printed record of the hearing.


On August 21, 2013, the United States Attorney for the District of Puerto Rico announced that a Federal Grand Jury in the District of Puerto Rico issued over 70 indictments charging three doctors, one non-attorney representative (a former Social Security employee), and 71 Social Security claimants with fraud in the Social Security Disability Insurance (SSDI) program in Puerto Rico.

Under the alleged scheme, the non-attorney representative would help a claimant file an SSDI application and, with the assistance of a conspiring doctor, provide fraudulent medical evidence that would result in benefits for individuals who did not, in fact, meet the legal eligibility standard for disability benefits. The representative would collect a fee from the claimant of 25 percent of any past-due benefits owed (up to a limit of $6,000). The doctors involved would be paid $150 to $500 by the claimant for their submission of false reports to the SSA.

The multi-year investigation began when disability medical consultants in the Puerto Rico Disability Determination Services noticed and reported a suspicious pattern of benefit claims involving nearly identical medical evidence.  As a result, the SSA and the SSA Office of Inspector General (OIG) conducted an extensive analysis of medical source documentation in SSDI files. The SSA OIG was joined in the investigation by the Federal Bureau of Investigation San Juan Office and the Puerto Rico Police Department, and included numerous interviews and surveillances.

As a result of the federal indictments, the SSA was able to immediately suspend benefits to the indicted beneficiaries and has initiated internal reviews of over 6,000 files of beneficiaries that included evidence provided by one or more of the indicted physicians or the indicted representative.  During the internal review, should the remaining evidence not substantiate the disability finding, benefits will be suspended and the beneficiary must submit evidence to substantiate the disability.  Should a beneficiary be unable to substantiate their disability without additional evidence, his or her benefits will be terminated after proper notice and they will be required to repay the Social Security Trust Fund for the benefits they improperly received.

The responsibility for making initial disability determinations is shared by the States and the SSA.  All 50 States, plus the District of Columbia and Puerto Rico, maintain fully federally-funded agencies, known as Disability Determination Services, which decide initial and continuing eligibility for benefits under rules established by the SSA.  According to the SSA OIG, approximately 185,000 disabled workers in Puerto Rico and their eligible dependents receive about $2.4 million in SSDI benefits each year.

According to the Congressional Budget Office, 10.9 million beneficiaries received $135 billion in SSDI benefits in fiscal year 2012.  According to the 2013 Social Security Trustees report, SSDI program revenues will only be able to finance 80 percent of benefits beginning in 2016, unless Congress acts.

In announcing the hearing, Social Security Subcommittee Chairman Sam Johnson (R-TX) said, “The widespread disability fraud uncovered in Puerto Rico raises serious questions about Social Security’s management of the disability program.  At a time when the Disability Insurance program will be unable to pay full benefits beginning in 2016, it is deeply troubling that Social Security is doling out millions of dollars in fraudulent taxpayer-funded payments.  Americans deserve answers.  On behalf of the American taxpayer, I am committed to getting the answers and rooting out waste, fraud and abuse so that we can help keep the program strong for those who truly need it.”


The hearing will examine the investigation in Puerto Rico resulting in the arrest and indictment of individuals for Social Security disability fraud, Social Security’s oversight of the SSDI program in Puerto Rico, and Social Security’s overall efforts to detect, prevent and prosecute fraud. 


Please Note: Any person(s) and/or organization(s) wishing to submit for the hearing record must follow the appropriate link on the hearing page of the Committee website and complete the informational forms.  From the Committee homepage, https://waysandmeans.house.gov, select “Hearings.”  Select the hearing for which you would like to submit, and click on the link entitled, “Click here to provide a submission for the record.”  Once you have followed the online instructions, submit all requested information.  ATTACH your submission as a Word or WordPerfect document, in compliance with the formatting requirements listed below, by the close of business on Thursday, October 3, 2013.  Finally, please note that due to the change in House mail policy, the U.S. Capitol Police will refuse sealed-package deliveries to all House Office Buildings.  For questions, or if you encounter technical problems, please call (202) 225-1721 or (202) 225-3625.


The Committee relies on electronic submissions for printing the official hearing record.  As always, submissions will be included in the record according to the discretion of the Committee.  The Committee will not alter the content of your submission, but we reserve the right to format it according to our guidelines.  Any submission provided to the Committee by a witness, any supplementary materials submitted for the printed record, and any written comments in response to a request for written comments must conform to the guidelines listed below.  Any submission or supplementary item not in compliance with these guidelines will not be printed, but will be maintained in the Committee files for review and use by the Committee.

1. All submissions and supplementary materials must be provided in Word or WordPerfect format and MUST NOT exceed a total of 10 pages, including attachments.  Witnesses and submitters are advised that the Committee relies on electronic submissions for printing the official hearing record.

2. Copies of whole documents submitted as exhibit material will not be accepted for printing.  Instead, exhibit material should be referenced and quoted or paraphrased.  All exhibit material not meeting these specifications will be maintained in the Committee files for review and use by the Committee.

3. All submissions must include a list of all clients, persons and/or organizations on whose behalf the witness appears.  A supplemental sheet must accompany each submission listing the name, company, address, telephone, and fax numbers of each witness.

The Committee seeks to make its facilities accessible to persons with disabilities.  If you are in need of special accommodations, please call 202-225-1721 or 202-226-3411 TTD/TTY in advance of the event (four business days’ notice is requested).  Questions with regard to special accommodation needs in general (including availability of Committee materials in alternative formats) may be directed to the Committee as noted above.

Note: All Committee advisories and news releases are available on the World Wide Web at http://www.waysandmeans.house.gov/.

SUBCOMMITTEE: Social Security    SUBCOMMITTEE: Full Committee