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Tax Evasion / Food Stamp Fraud

Brothers accused of tax evasion; wives also face federal fraud charges
BY BRIAN BRUEGGEMANN
Belleville News-Democrat

Two Maryville brothers and their wives are facing federal charges of tax evasion.

The defendants are Robert Todd McKinney and his wife, Belinda McKinney, and John Quinn McKinney and his wife, Chamethele McKinney.

According to the indictment, the brothers tried to avoid paying taxes on income from their business, McKinney Hauling of East St. Louis.

Steve Wigginton, U.S. attorney for the Southern District of Illinois, announced the charges Monday.

The Internal Revenue Service filed tax liens against the brothers in 2003. The defendants subsequently engaged in fraud to avoid paying taxes, according to the indictment.

The indictment alleges:

* That Robert and John McKinney lied about their ability to pay taxes and concealed assets.

* That Chamethele and Belinda McKinney set up nominee bank accounts that received income from the business, and provided false information on mortgage documents. The mortgages were for a home at 4941 Autumn Oaks Drive in Maryville for Robert and Belinda McKinney, and a home at 22 Seasons Ridge in Maryville for John and Chamethele McKinney.

* That Robert and John McKinney lied to federal agents by saying they resided in East St. Louis.

* That Robert and John McKinney claimed the company had no work or income when they were interviewed by federal agents. But on the same day, they made a deposit of $7,500, and around the same time, they made another deposit of $240,377.

* That the defendants have evaded paying taxes since 1999, and now owe at least $952,000 in income taxes.

* That Chamethele McKinney lied on government applications in 2006 in order to get food stamps.

Each defendant is charged with conspiracy, and related charges. The charge of conspiracy carries a maximum sentence of five years in prison and a $250,000 fine.

© 2007 Belleville News-Democrat and wire service sources. All Rights Reserved. http://www.belleville.com

Collecting Debts Through Federal Payments

The Treasury Offset Program Newsletter

If you’ve never heard it spoken, you probably have thought about it: “What’s the point of trying to collect fraud and program violation overpayments from people on public assistance?”  Simply answered, the point is what alternative exists; allow fraudsters and violators free reign to steal tax dollars?

We all should know that overpayments in public assistance can be collected through reduction in ongoing assistance grants.  But you’ve probably wondered about people who have left the program but have no discernible source of income or those who are disqualified and have no other eligible household members from which grant reduction can be imposed.  How can these debts be collected?

The Treasury Offset Program (TOP) was implemented to redirect all or a portion of any federal payments to individuals who owe states a debt arising from overpayments from a federally-funded program.  TOP focused on SNAP (Supplemental Nutrition Assistance Program or Food Stamp) debts owed by individuals resulting from program violations or fraud.  It makes sense.  An individual who violated program rules in order to receive assistance to which he or she was otherwise ineligible to receive should not benefit further from unaltered federal payments until that debt is paid.

Through the efforts of UCOWF members, a pilot project is currently underway to expand beyond SNAP debts and include collection of other debts owed to the states arising from fraud or program violations in other public assistance programs that have a federal funding component.  Expanding the TOP is a huge step forward in helping states deal with mounting uncollected debt.

To learn read more about TOP and how it helps collect unpaid debts, click this link: Treasury Offset Program Newsletter and download the May 2012 newsletter.  It is only a two-page newsletter but it is filled with information that all program integrity professionals should know.

UCOWF Members Make a Difference

Update on UCOWF Proposal– Expanding Collections of State Debt through the Treasury Offset Program (TOP)

As part of President Obama’s commitment to crack down on improper payments and enhance program integrity, a Partnership Fund for Program Integrity Innovation was created to help States and localities find ways to save taxpayer dollars and deliver benefits more efficiently and effectively.  A “Collaborative Forum,” a group of 200+ stakeholders from Federal, state, local and the private sector representatives, was formed by the Partnership. The Forum has been working to generate and review ideas for innovate pilot projects.  To date, four proposals from the Forum have been approved for funding by OMB.

UCOWF submitted a proposal for State Debt Recovery via the Treasury Offset Program (TOP) in programs that have a federal financial component.  In January 2011, a notice was posted on the UCOWF website that our proposal was selected for funding consideration by the Forum Steering Committee.  In late May 2011, the Partnership Fund announced the pilot had been approved for funding.  The following is a summary of the Pilot:

This pilot will address debt owed in Federal funded programs in which States disburse payments – such as Temporary Assistance to Needy Families (TANF), Medicaid, and Child Care – by matching  State-submitted debt with Federal payment information to simulate the potential to increase recoveries by authorizing TOP to offset Federal income tax refunds in more cases. The simulation will look at which state-managed programs should be referred, which payments should be offset, the potential amount of recovered funds, and the costs/benefits of this method of debt recovery. As a simulation, no actual offsets will be processed.  The evaluation will be constructed to validate matches to assess the potential for “false positives” in each of the programs.  In addition, the evaluation will explore the need for and potential efficiencies to be gained by consolidating state debt prior to submission to Treasury.  Each participating State will determine participating programs in consultation with Treasury.

UCOWF members, Denny Erickson, Sandy Smith and Laura Adkins, have been extensively involved in the Forum and other UCOWF members have provided input on several other potential proposals.   Denny Erickson has been taking the lead as UCOWF’s representative for the TOP pilot on the Forum.  He has been collecting and compiling information for Treasury and has been assisted by other UCOWF members Sandy Smith and Laura Adkins.  Seven States – Arkansas, Illinois, Kansas, North Carolina, Texas, Washington, and Wisconsin – have volunteered to participate in the pilot.  If you would like more information on the pilot project contact Denny.   His contact information is available in the UCOWF member listings.

You may also check out other pilots that have been approved at the Collaborative Forum website: http://collaborativeforumonline.com.

Please keep checking back to this website for additional information.

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The Public Role of UCOWF

UCOWF MembersThe United Council on Welfare Fraud is an organization whose primary goal is to strengthen the integrity of our public assistance programs.  We do that by providing our members with a variety of training and collaboration tools to improve their ability to identify, investigate, prosecute, and recoup fraud committed against the public assistance programs in North America.

We also have a public role.  Part of UCOWF’s goal in strengthening the integrity of these social programs is by providing a site where the public can learn about our members’ efforts to reduce fraud and about current affairs affecting assistance programs so the public can weigh in with their elected officials on a topic they feel strongly about.

What We Don’t Do

UCOWF is a non-profit organization, not an extension of any government entity; we are not empowered by any authority to investigate fraud.  Our members are empowered to take action against suspected fraud by authorities within the boundaries of their own jurisdiction and purview but UCOWF is not an investigative agency nor does membership in UCOWF authorize anyone to conduct investigations into public assistance fraud.

UCOWF does not obtain or develop statistics concerning welfare fraud.  Welfare fraud is defined differently by states and provinces and is defined differently between the various programs.  Some counties, states and provinces may have specific statutes defining and addressing welfare or public assistance fraud.  Others may use more general criminal statutes under which the various forms of welfare fraud are lumped.  Given this disparity of definitions, getting a true measure of fraud nationwide is nearly impossible.

UCOWF does not lobby lawmakers; our By-Laws expressly prohibit lobbying activities.  We do provide our position and views to the administrators of our nation’s social programs as they refine the way the program functions.  We may also reach out to members of Congress to offer our perspective or creative solutions identified by our members that strengthen program integrity measures within certain programs.

Our Public Role

We provide an avenue for the public to report fraud that they suspect is occurring.  A report to UCOWF is forwarded to the proper authorities within the state, county or province in which the suspected fraud is occurring.

We will also publicize pending legislation that we believe would weaken the safeguards in place to detect or prevent fraud from occurring.  Through commentary, we attempt to provide a ‘single voice’ to concerns that we believe exist in these taxpayer-funded programs in hopes that the public will carry that message to lawmakers.

Public assistance programs reflect the generous nature of our citizens and the noble idea that helping those less fortunate is characteristic of a civilized society.  There are those who will purposefully take advantage of that generosity by committing fraudulent acts, however, and it is that small group that warrants our attention and efforts.

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Professional Development

UCOWF prides itself on the advancement of its members and provides the following resources to assist them:

 

Annual Training Conferences

Each year UCOWF sponsors an annual training conference for its members. These four day conferences are held throughout the United States in August, September or early October.

Workshop

The conferences provide training for investigators, prosecutors, collections and claims staff, and administrators on the latest techniques in the prevention, detection, and prosecution of welfare fraud and in the administration of welfare fraud programs.  Information on upcoming conferences will be updated on the public home page as plans are finalized.

 

UCOWF Member Forum

Among the 600+ members of UCOWF is a wealth of knowledge, skills, abilities and experience in the realm of welfare fraud.  Collaborating with fellow UCOWF members for ideas, strategies and solutions improves each member’s skill set.  UCOWF facilitates collaboration through its Member Forum.

The forum provides a platform for any welfare fraud-related issue that can arise for which a solution or strategy is sought.  Through a simple question and answer format, discussions pertaining to solutions, emerging trends, innovative techniques, and new technology can be shared with any member who seeks solutions to problems encountered in their job.

Certification Program

UCOWF administers the Certified Welfare Fraud Investigator (CWFI) program.  Prerequisites exist for a member to sit for the CWFI exam and the exam covers a variety of topics that range from investigative techniques and standards to specific public assistance policy.  The exam is administered to those who apply and are approved by the CWFI Board.  Once passed, the member is awarded the CWFI title and must maintain that certification through annual continuing education requirements.  The CWFI title distinguishes a member as apart from his or her peers: a knowledgeable, fundamentally-sound, and reliable investigator.

Additional certification programs are being considered for development so that members who are not investigators can achieve a UCOWF certification in their areas of expertise.

News

Whether news pertaining specifically to UCOWF or news from external sources, staying abreast of current events shaping the public assistance program integrity landscape is important for continuing professional development.  Be it articles about latest trends in program integrity, large-scale investigations somewhere, or articles and reports about pending changes to public assistance programs; if the article or report is widely published on the internet, UCOWF will employ open-source newsfeed services to bring that information to its members.

Staying abreast of current trends and issues, targeted training materials and facilitating collaborating with peers across the continent are the ways UCOWF is achieving its goal of providing professional development opportunities for its members.