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Fraud infects state in-home care program

April 13, 2009|Evan Halper

SACRAMENTO — Loose oversight and bureaucratic inertia have allowed fraud to fester in a rapidly expanding multibillion-dollar state program that provides personal caregivers to the impoverished elderly and disabled. Hundreds of reports of scams and swindles are going without investigation.

Prosecutors and program administrators across the state say they are alarmed by the ease with which people are taking advantage of the program, In Home Supportive Services.

The program is one of the fastest-growing in state government. This year it is budgeted at $5.42 billion to provide care for some 440,000 Californians. The aim is to allow low- income and elderly incapacitated people to remain in their homes, saving the state the expense of costly nursing homes. Experts generally consider it a success.

But government funds are flowing in so quickly, with such limited oversight, that prosecutors say it is common for the state to send paychecks to scam artists claiming to be caring for someone who is dead. Or claiming to be caring for a relative or friend faking a disability. Or claiming to be providing care during the same hours they are working elsewhere.

"This program is very easy to abuse," said Michael Ramsey, the district attorney in Butte County in Northern California, which disbanded its In Home Supportive Services fraud unit in 2007 because of budget cuts. "It invites chicanery and fraud."

Some critics of the program say politics has blocked efforts to combat fraud. The program has become a steady source of revenue for the Service Employees International Union, among the most powerful interest groups in the Capitol, as well as a second union, the United Domestic Workers of America.

Under the program, people receiving care are entitled to hire whom they wish at government expense. Most hire their relatives, because family members are often the most appropriate to provide the needed round-the-clock feeding, changing, bathing and other care. Wages range from $8 to $14.68 an hour, depending on the county. Those workers are required to pay monthly union dues that total millions of dollars. The SEIU, for example, collects nearly $5 million a month from its 223,000 In Home system members.

The unions donate heavily to the campaigns of Democrats who control the Legislature and organize get-out-the-vote efforts on their behalf.

"There is a huge amount of money flowing to unions from this vast pool of workers they have been able to organize," said Sen. Dave Cogdill (R-Modesto). "Anything they see as a threat to that income stream they are going to challenge and use the political muscle they have to do it."

Union officials deny they have been a barrier to enforcement. Scott Mann, spokesman for SEIU Local 6434 in Los Angeles, said the organization has zero tolerance for abuse of the program. The organization backs a plan to root out swindlers by launching a study on the problem that would not be completed for nearly three years.

In the meantime, the state has two full-time investigators looking into thousands of cases of suspicious behavior. County officials who manage the program are prohibited by state law from using any of their billions of dollars in state and federal program funds to hire their own investigators, so many have thrown up their hands.

With no investigators, Los Angeles County had a backlog of 800 fraud cases earlier this year.

The state put some investigators from other departments on loan for two months to work the cases, but as soon as it did, those investigators were flooded with about 200 additional fraud allegations.

Philip Browning, director of the county Department of Public Social Services, said the new cases came from social workers who had not been reporting suspicious activity because the state had shown so little interest.

In one case, a social worker, her brother and her grandson in Los Angeles County are accused of bilking the In Home system out of $77,000 over three years, billing for care that was not provided. The social worker was simultaneously collecting pay for her full-time state employment. The case is awaiting trial.

In Fresno County, officials used $650,000 in county funds to create the state's only active In Home Supportive Services fraud investigations unit. Prosecutors say they routinely find cheating on time cards, prisoners reporting they are providing care while locked up and recipients of the service concocting disabilities to get relatives on the state payroll.

John Savrnoch, an assistant district attorney there, said the small fraud unit has a backlog of 1,700 tips of suspicious activity.

One of the bigger busts in Fresno so far involved a husband and wife who got their children to bill the state $150,000 to care for them. The husband claimed he was completely disabled and could not get out of bed.

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