The fraud problem?

Maine doesn't really have a problem with welfare fraud by recipients. It's hard to get data comparing Maine to other states because welfare programs vary so widely, but state officials openly admit they have no evidence of widespread fraud. "It seems like it could be pervasive, but we just don't know," says Herb Downs, director of audit for the state Department of Health and Human Services, and chairman of the state's Fraud and Abuse Work Team.

All of the state's evidence about welfare fraud as a systemic problem is anecdotal. As Downs puts it, state officials "hear a lot of the stories." The largest fraud story the state has is that of Kathleen Schidzig. At $18,000 over three years, Schidzig's is the most prominent, highest-dollar-amount case in recent memory, as far as fraud from welfare recipients goes. Assistant Attorney General Peter Black, using DHHS calculations of the maximum benefits that might ever be issued to an in-school mother of four, tried to revise that number to $49,000 (just over $16,000 a year) late in the court proceedings, but was rebuffed by the judge. (Superior Court Justice MaryGay Kennedy did express significant outrage at Schidzig's case, calling her actions "calculated" and "scheming," and sentenced her to a year in prison, with two more years hanging over her head if she runs afoul of strict rules during her two years of post-incarceration probation.)

The average cost of locking up a Maine inmate for a year is $45,000 — not counting money paid to prosecute and defend the accused. (In Schidzig's case, the state Commission on Indigent Legal Services spent $1918.60 on her defense — paying an attorney $50 an hour, plus mileage to drive between Portland and Auburn. Black's total compensation package cost taxpayers $63,000 in 2010.)

Despite the low dollar amount stolen and the high cost of prosecution and incarceration, DHHS is seeking to hear more stories, launching a new state website and hotline to which people can report their neighbors for alleged fraud. (It's maine.gov/fraud and 866.348.1129.)

DHHS's Martins admits those tips can be more trouble than they're worth. Of 1200 tips received last year, between 12 and 20 resulted in court proceedings, he says. Beyond tips that don't include names, towns, and other identifying details, there are plenty of things the public might think are not allowed, that actually are permitted under the rules of the various welfare programs.

For example, Martins says, when a mother and children live with the mother's boyfriend, the children's father is the one responsible for the kids — not the live-in boyfriend (unless he's also the dad). Or there's the common complaint that someone on welfare has a nicer car than the complainant approves of; Martins observes that federal law allows welfare recipients to own a car — one car — to get to and from work.

When investigators get beyond those tips — which are a large proportion of the total — fraud is still "difficult to prove," Martins says. Much more common is an erroneous overpayment — either a clerical error on the state's part, or an honest mistake on the recipient's part that is quickly owned up to. In those cases, the overpayment is deducted from the next benefit check the recipient would otherwise get, and no criminal charges result.

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