NOTHING TO CUT: Meet the Multi-Millionaire Who Collected His Dead Mom’s Social Security Checks for 23 Years

Guest post by Laura Trueman

The 2014 omnibus bill contains an increase in funding for running the Social Security Administration (SSA). Maybe now they can stop paying Social Security benefits to dead people.

According to a December Government Accountability Office (GAO) report, SSA systems do not accurately note and confirm the deaths of beneficiaries, resulting in payments being made to dead people—sometimes for decades. The flawed system doesn’t just impact Social Security payments, either. Multiple other federal agencies that pay benefits—from federal pensions to payments to farmers and the disabled—rely on SSA’s flawed death data.

Collecting Dead Mother’s Social Security for 23 Years. Raymond O’Dell made news this week when he was sentenced for collecting his dead mother’s Social Security benefits for 23 years. O’Dell collected $ 188,000 in benefits, while building a successful Taco Bell franchise. His accountant put his net worth at $ 4 million (including $ 431,000 in cash). This week, he was sentenced to pay back the benefits, along with a $ 20,000 fine, and will serve six months in prison.

O’Dell is not unique. In Washington state, U.S. Attorney Jenny Durkan convicted five people for collecting a dead parent’s Social Security benefits. One man personally disposed of his mother’s body in a rural area and never reported her death; he collected her benefits for 9 years. More examples are cited in the SSA’s “Deceased Payee Fraud; Strange But True,” released this month.

As Durkan noted, “Cheaters shred the safety net for those that really need it…and need to know prison and hefty fines wait at the end of the scheme.” The SSA has the Office of Inspector General Fraud Hotline for reporting suspected fraud. That’s good, but it isn’t enough.

Getting a Handle on the Problem. The SSA receives and processes death reports from a variety of sources, including states, family members, funeral directors, post offices, financial institutions, and other federal agencies. It’s a big job: In 2012, seven million deaths were reported to the SSA; overall, they manage the death records for some 98 million people.

The GAO reports that the agency does not verify the death reports from all of its sources. The SSA has no clue how accurate the unverified reports are because, according to the GAO, the agency has “never performed an analysis validating the accuracy of the various sources of death reports.”

The GAO checked on a random sample of the SSA’s death reports and found problems:

  • Notice of about 500 deaths came to the SSA long after the person’s death; in fact 200 were 10 or more years after the fact, meaning that all kinds of benefits could have been flowing unchecked for years.
  • Another 150 people were apparently engaged in “back to the future” time travel—their date of death was BEFORE their date of birth.
  • Almost 2000 broke or nearly broke Guinness records—living between 115 and 195 years.

The GAO made some recommendations on how to improve the SSA systems, and maybe things will improve. It should be noted that, while the GAO focused on the SSA’s struggles with the death reports it received, Raymond O’Dell and a slew of others kept their relative’s death from being reported.

In the omnibus appropriations Congress passed this week, they offered their usual solution—more money—increasing the agency’s budget by $ 651 million. Oklahoma’s Senator Tom Coburn (R) and a few others are pushing the SSA to fix this and other fraud in benefit programs. As The Wall Street Journal notes, these members “are voices crying in the wilderness” as Congress focuses on spending more money, not making existing agencies and programs work better.

Read more at The Foundry.

Doug Ross @ Journal

Preparing for a Social Collapse is Silly – People Are Too Civilized and Reasonable…

SHTFplan Editor’s Note: Not many can fathom the possibility of a societal collapse. Our thin veneer of modern civilization has led most of us to believe that widespread calamity – the kind that leaves millions dead in its wake – is simply not possible. We have democratic governments, advanced technology, and people are so well informed about past horrors that we’d never repeat the same mistakes. In the analysis below originally published at Ed That Matters, author Mic Roland explores this notion, and provides historical evidence that suggests no matter how civilized and peaceful we think we may be, all it takes is one key event to strike fear into the populace and the whole thing can come crumbling down. Mic draws a comparison between life today and how it is analogous to the state of the world in early 1914. Things were seemingly normal back in 1914 and no one could have imagined what would play out following the turning point which occurred on June 28 of that year. It happened fast… so fast that society broke down in a matter of days and weeks, and by the end of the year nearly one million people were dead.

But today is different right? Such a thing can’t happen again…

(Pictured: Within days of Archduke Ferdinand’s assassination hundreds of thousands were mobilized across Europe)

Society Is Too Civilized to Collapse? A Lesson from WWI
By Mic Roland

Preparing for a social collapse is silly. Society won’t collapse. People are too civilized and reasonable.”

This objection, or something like it, occasionally comes from friends or family who regard prepping as a fool’s errand. Some extra food or flashlight batteries might be grudgingly accepted as prudent, but security measures? Defense? That’s just crazy talk. We’re a modern, civilized nation, not savages, they say. We value the arts and sciences. Since childhood, we’ve been taught about tolerance, kindness and respect for each others civil rights, etc. If tough times come, they say, people will help each other out and respect each others’ rights. We’ll all band together and help each other get through. We won’t be at each others’ throats…they say.

These cultural optimists might concede that during a disaster, like Katrina, some bad deeds might be done by a few bad people, but those apples were already bad. The vast majority of folks, they maintain, are civilized people, who value kindness and generosity. Civilized folks don’t suddenly become “bad” people.

Unfortunately, they can, and have. An example from history is the start of World War One. In just that one example, civilized men chose violence over civility.

In June of 1914, Europe was chock full of highly civilized people. The capitols were staffed by the upper crusts of their societies. Silk hats, gloves, suit coats with tails. Europe was the peaceful land of Bach, Beethoven, Dr. Livingston, fine wines, Louis Pasteur, Madam Curie. fairytale castles, Mozart and Strauss with his Blue Danube waltz — all very refined and civilized. The early 20th century was a time of amazing progress in science, technology and medicine. Every year seemed to bring some new marvel to benefit mankind — motor cars, aeroplanes, plastics, air conditioning and instant coffee (!). Meliorism (the notion that things just get better and better) was in vogue.

Yet, in just one month, none of that mattered. The first of 9 million began to die in Flanders’ fields. The traditional narrative (history written by victors) holds that the war was caused by bad apples. Those brutish, uncivilized Germans started the war. The truth is, it was all of them, not just the Germans. Despite the vast cultural refinements, leaders in Vienna, Moscow, Berlin, Paris and London too (all men who prided themselves as part of modernist enlightenment and progressiveness) threw all that civilization and refinement out the window in favor of what they knew would be a terrible and bloody war.

How could civilized men do such a thing? The short answer is: fear.

The spark, of course, was the assassination of the Austrian archduke Franz Ferdinand and his wife on June 28th by a ragtag band of Serbian-sponsored terrorists. But that killing did not start the war. It was merely the crisis that got played out of control.

The month-long run-up to war ran in two phases. The first phase involved each nation acting on fears of losing some “vital” national interest — prestige, influence, access to markets, etc. The second phase tapped into a deeper fear — the fear of doom. Like two gunfighters in an old western movie, the second man to draw was dead. In the summer of 1914, no one wanted to be second nation to “draw.”

The machinations of that first phase are a bit much for this blog post. Suffice it to say that all the nations played the game of brinksmanship over their various slices of pie.

The critical trigger to the more deadly second phase came on July 28th, when Russia tried to quietly mobilize their huge army against Austria. Perhaps their move was just ramped-up brinksmanship, but once the guns started coming out, no one could afford continue just talking. The stakes had changed. Progressive modernism and slices of influence pie did not matter anymore.

With Russia mobilizing, Germany was afraid of doom via attack on two fronts. (France and Russia were allies) In hopes of heading off a two-front fate, Germany demanded that France NOT mobilize as proof of their professed non-hostile intentions. The French refused to say. Germany was at a decision fork. If they mobilized immediately, they could be ready before the Russians (and French). If they waited — even a few days — they would let the Russians have the only gun out of its holster. Fear of that doom prompted Germany to opt for the violent course rather than the civilized course (keep negotiating). Once Germany began mobilizing, France was at the same sort of decision fork: keep talking or go for their guns. They opted for guns. The British, worried that Germany might defeat both the French and the Russians, thereby putting all of the channel coast under German control (which the British believed would somehow be doom for them), so the British promised to go to war with the French.

Come the first of August, the guns were loaded and troops on the move. Due to better planning, Germany was the first to get their gun out of the holster. She had only a few days head start, so opted to strike first and attempt to take out France before the Russians were fully ready (The Russians had a very slow holster). From there on out, it was war, and a war that quickly devolved into a bloody stalemate of trenches and mud.

Even after the shooting began, cooler heads might have prevailed. But the populace of the various nations also bought into the contemporary doom-anxiety thinking. They did not want THEIR nation to lose the war and be doomed, any more than their leaders did. WWI was the first major war in which propaganda was a significant tool of the various governments. The Allied nations spun the war as defending justice or stopping “evil” Germany from taking over the world (which the Germans didn’t want anyhow). The American propaganda machine one-upped the Allies to make the war the defense of “democracy” itself and ironically, “the war to end all war.” Civilized Americans joined the violence for fear that democracy and/or freedom would somehow be lost.

Millions of men became willing to kill as many total strangers as it took to stave off the specter of doom for THIER side. Even when the war stagnated, and hundreds of thousands died for no gain, no one was willing to stop fighting, lest their side lose — injustice prevail, democracy be ruined, whatever. So, the killing went on until exhaustion set in.

How do the origins of World War One fit a societal melt-down today?

Today, as back in 1914, most people find it easier to be civil when they’re comfortable. It is harder to be deferential and civil when cold, hungry or afraid. Troubles brew up occasionally, but as long as people feel there is hope of negotiating their way through it, civility often survives. It is when people feel threatened with a sudden loss of something vital (food, safety, etc.), that they are more prone to react with violence. It might be a desperation violence, rather than malice, but a bullet fired in fear hurts just as much as a bullet fired in anger.

The following scenario is a micro-analogy to the start of WWI in a more street-level setting. First there is jockeying for “interests”, which quickly escalates to fear and violence.

Imagine a group of civilized neighbors who, after a collapse scenario, were counting on the contents of a nearby food warehouse to get them through. They don’t own the food, but presume it would remain available for them since it was near them. Times would be tough, but they had a source of food. Civility prevails.

When the actual owner of the food orders it packed in trucks and shipped out to somewhere else, the neighborhood status quo is upset. As the trucks roll down the driveway, the civilized folk have to make a quick decision (rather like the statesmen of Europe did). If they believe their families will starve to death if they let the trucks depart, they might block the driveway to stop the trucks. If a truck driver makes threatening moves to get through the barricade, (he has his orders, after all) the potential threat of hunger is upgraded to an actual threat of personal harm.

Before the crisis, would these civilized neighbors, (lovers of poetry and fine cuisine) have dragged a trucker from his cab and beat him up? No. They would have been horrified at the thought. Yet, when forced into a snap decision, when the choice seems to be between violence or doom, many of them will opt for violence — just like the leaders of Europe did in July of 1914.

Back to my scenario; the angry and fearful mob drag the drivers out of the trucks and rush to open the backs to get “their” food. Who wants to show up late to a looting? No waiting in orderly lines, or asking “Have you any Grey Poupon?” The race is to the swift.

The warehouse manager might be a nice person, polite to his elders, kind to kittens, etc. He sees a mob of looters attacking his drivers. He does not have the luxury of time to wonder if they are vile criminals or just parents of hungry children. Each second of delay injures his men. The risk of inaction is too high. He shoots a warning shot over their heads.

The mob, realizing they are being fired upon from the warehouse, now have another enemy with “obvious” ill intent. The stakes have gone up. Some of the looters charge toward the office with sticks.

Should the manager let the mob into the office to discuss their grievances in a civilized manner? He has only a few seconds to decide. The apparent risk far outweighs the possible benefits. He shoots at the leaders. A few of the mob fall. The enraged looters regroup behind barricades. Some of the mob fetch guns. The manager and his armed staff are now in their office trench, afraid that the mob will kill them if they get in. The looters are in their barricade trench, afraid that their babies to starve if they don’t get in.

The warehouse becomes a model of World War One — two sides squared off, both assuming that the loser of the fight will be doomed. Fear put them there. Fear keeps them fighting. Kubayah finds no traction.  Civilization does not prevail.

Fear trumps civilization.

Mic Roland is a closet prepper in a semi-rural area of the “Free State,” with a soft spot for old movies.

This article first appeared on Ed That Matters.

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SHTF Plan – When It Hits The Fan, Don’t Say We Didn’t Warn You

Dr. Doom: “A Lot Of Problems Are Coming… Revolution… Social Strife…”

Famed economist and investment guru Dr. Marc Faber of the Gloom, Boom and Doom Report weighs in on global happenings.

He predicted the collapse of global financial markets in 2008, and pegged their subsequent rise to the day back in 2009.

If there’s someone out there with his finger on the pulse of the financial crisis and where we’re headed next, it’s Doctor Doom.

If you have ten minutes today, and are looking for some realistic insights into financial markets, the monetary machinations behind the scene, and the non-traditional investments you should be focused on going forward, take the time to listen to the good Doctor.

Excerpts by Zero Hedge via The Daily Crux:

Just in case a new high would be achieved in the next two months or so, it would not be confirmed by the majority of shares. In other words, very few stocks would lead the advance. In terms of bonds, they are also incredibly oversold. Where the sentiment about equities is actually still rather positive and all of these super bulls still predicting the market to continue to rise into 2014, 2015.

In bonds and gold, sentiment is by historical standards incredibly negative. As a contrarian, I would rather buy bonds and gold than equities.

I think the market is on the high side, corporate profits are inflated and we could easily, from the recent high, May 22 at 1687 on the S&P, drop by 20% to 30%, easily.

He [Ben Bernanke] said if the economy does not meet the expectations of the fed in one years’ time, they will consider additional measures. In other words, if the economy has not fully recovered by mid-2014, more QE will be forthcoming. As I said already three years ago, we are going to go with the Fed to QE99.”

We have wage deflation in the world in real terms, for sure. In other words, real wages are going down and the cost of living everywhere are going up. That is why you have social unrest in North Africa, in the Middle East, in Turkey, in Brazil, and it will spread because the average person on the street hasn’t participated in the huge asset inflation that has been going on in high-end properties, Mayfair properties, Fifth Avenue, Madison Avenue, the Hamptons and in equities and until recently in bonds and commodities.

The only thing that I know is that I want to own some physical gold because I don’t want all of my assets in financial assets.

I don’t know, I am not a prophet, I don’t know exactly where the price will be on a month by month basis, but I want to have some wealth, some of my assets in physical gold.

I can see a lot of problems coming into the world including expropriation through taxation or through regulation or even through revolution and social strife.

Like Ron Paul, Marc Faber understands that the price of gold can potentially go to infinity. So, too, can the price of other physical assets like food, energy and industrial metals.

As Faber notes, he can’t predict prices, but he does understand that stock market valuations are disconnected from the reality of the situation.

The Dow Jones may go to 30,000 points, but what good does that do for you if prices across all goods and services inflate to unimaginable levels?

This is what mainstream analysts and traders don’t talk about. They are focused on making money in stock markets, not how those valuations will affect the average person on the ground. As Doc Faber notes, wages are going down across the board. All the while prices are rising.

Sure, millions of dollars are being made on Wall Street, as has always been the case. But for the rest of us, well, we’re struggling to survive and most of us are living paycheck-to-paycheck.

If the stock market rises to 30,000 as some have predicted, chances are you will in no way benefit from that. In fact, it’ll hurt much more than it helps, because that rise can only be made possible through price inflation.

Whatever the case with stocks – up or down – it should be clear that wealth is being destroyed across the board.

This means things can only get worse for the majority of the population.

And, as we’ve seen throughout the world over the last five years, that kind of environment tends to lead to significant upheaval.

Expect the same here in due course.

Back in August of 2010 Marc Faber suggested that things around the world would get so bad, that you’d better own some of the following collapse-proof investments:

Buy a farm you can tend to yourself way out in the boondocks. And protect it with high voltage fences, barbed wire, booby traps, military weapons and Dobermans.

Invest in assets that will have real value - Assets you can use and trade, such as precious metals, food, supplies, barterable labor skills, and of course, high voltage fences to protect you from the hordes when they come looking for what they failed to prepare.


SHTF Plan – When It Hits The Fan, Don’t Say We Didn’t Warn You