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Puerto Rico more than 70 people indicted for SSDI fraud

The New York Times has reported that “more than 70 people have been indicted in Puerto Rico as part of a two-year investigation into widespread fraud in Social Security disability payments.” The announcement was made Wednesday morning by federal prosecutors.



The scheme involved not only doctors but also a former Social Security Administration employee. According to the report, the employee worked in conjunction with the doctors and approved benefits for workers in Puerto Rico who did not qualify for Social Security Disability Insurance (SSDI). Up to seventy-one other people were also indicated for making medical claims which were found to be fraudulent. If the alleged criminals are convicted they could be forced to repay or forfeit an estimated $2 million in proceeds.

Puerto Rico ranks highest in number of fraudulent claims


The U.S. Attorney’s office in Puerto Rico has reviewed disability claims and has released a statement which claims “Puerto Rico is one of the top districts in the country for the commission of this type of fraud.”

This type of fraud is costly for all Americans. Social Security Disability Insurance or SSDI is supposed to only be awarded to workers, and some qualifying family members, who have worked, paid into the system, and who are no longer able to work due to a severe, long-term health condition.

The program is financed by Social Security employment taxes paid by workers and employers. Although the SSA won’t call it a “pyramid scheme,” worker’s contributions do not entirely pay for the benefits they eventually receive and disability benefits are then financed by younger workers who are continuing to work and pay employment taxes. So if there is fraud, we all pay.

How did the fraudulent SSDI scheme work in Puerto Rico?


The SSA employee who has been indicted is Samuel Torres Crespo. According to the reports, he completed fraudulent insurance applications for claimants in Puerto Rico who did not have medical disabilities that prevented them from working. After the applicants were completed he would send the claimant to one of three doctors, who would then automatically approve the claim. The doctors who have been indicated include Wildo Vargas, a psychiatrist; Rafael Miguez Balseiro, also a psychiatrist; or Erica Rivera Castro, a rehabilitation specialist.

After the claimant was approved for SSDI benefits and given a lump sum payment, Mr. Torres Crespo would collect 25 percent of that payment. The doctors would also receive $150 to $500 for each fraudulent medical report they had submitted.

Most of the claims approved were for mental disorders. The investigation was initiated following a report done by the Wall Street Journal that found claims in Puerto Rico for mental health disorders were approved at a higher rate than in other states. Officials than began an investigation and found fraudulent activities did exist. The investigation included hours of analyzing medical records and conducting extensive surveillance of potential suspects. One video showed one SSDI recipient, a gym owner, who claimed to have a severe back condition, lifting a girl over his head on his Facebook page.

Federal investigators expect to make more arrests, but this bust appears to be one of the largest disability fraud cases ever assembled by federal investigators.
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