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July 7 2017

$2 Mil NJ Welfare Fraud Exposes Holes in Our Social Safety Net

by Patrice Lee Onwuka

Three dozen people have been implicated in a massive complex scheme to defraud the federal and state government of over $2 million in welfare benefits.

The first arrests occurred June 26th when authorities nabbed a prominent New Jersey rabbi, his wife, and several couples. The Rabbi used the synagogue and businesses linked to it to hide income, submit fake applications for aid, and send money overseas. The suspects claimed to be poor in government documents, which qualified them for Medicaid, housing benefits, and food stamps, while taking home undisclosed income. This week, another dozen wealthy people were arrested as part of this dragnet.

One couple alone collected $75,000 in Medicaid benefits from 2011 to 2013. Another couple earned more than $1 million in income, but still collected Medicaid benefits.

The arrests have sent panic throughout a township community with hundreds of residents contacting authorities asking how to avoid arrest, cancelling their public assistance, and updating their incomes.

A local religious leader iterated the lesson from this scheme:

"There is no such a thing as 'justified' theft," a statement continued. "Federal and State social safety-net programs are meant for those in need, even those in need have rules and criteria that must be strictly followed. To deliberately bend a safety-net eligibility rule is stealing, no different than stealing from your friend or neighbor. 

"We would all do well to redouble and triple our efforts in our communities, reminding each and every one of us that there is never any excuse for dishonesty in any form."

That’s a lesson not just for potential scofflaws, but for our lawmakers.

Medicaid, welfare, and other public assistance programs were expanded dramatically during the past eight years with little or no accountability to ensure enrollees qualified for the aid. President Obama used the recession as a rationale to stretch the safety net wider, but well after the recovery, the welfare rolls failed to shrink back to their pre-recession levels. Instead, we have wealthy families applying for and receiving benefits.

Our social safety net should be SMART – small, managed well, accountable, retractable, and targeted. The goal should not be the number of checks we give out, but rather the number of people who gain independence and no longer need public assistance.

This lesson comes at an important moment as well. The Affordable Care Act expressly expanded Medicaid coverage. As we consider how to repeal it and replace it, we must admit that there’s a better way to help Americans gain access to quality healthcare than stretching Medicaid wider.

We can all agree that public assistance is important, but should be targeted to those who need it most. This New Jersey case reminds us that in the absence of good stewardship, poor Americans suffer by others gaming the system.

Independent Women’s Forum’s mission is to improve the lives of Americans by increasing the number of women who value free markets and personal liberty. Sister organization of Independent Women’s Voice.
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