Posts Tagged With: Social Security Administration

Undocumented Workers Are Keeping Social Security Afloat

Posted on March 1, 2016 by Judge London Steverson

In 2013, analysts at the Social Security Administration calculated that in 2010 undocumented immigrants had paid $13 billion into the system and were making on average $34,000 a year at the time. From 1996 to 2003, undocumented workers paid a combined $90 billion into both Social Security and Medicare.

Since 1996, immigrants who didn’t qualify to get a Social Security card numbers have been able to apply for an Individual Taxpayer Identification Number (ITIN) from the IRS. ITINs were originally granted to foreign citizens who were active investors in the American real estate market.

A substantial percentage of undocumented immigrants in the U.S. pay billions in taxes annually and own their own homes, according to a 50 state report from the Institute on Taxation and Economic Policy (The Study).

With an IRS ITIN number, undocumented residents can legally open a bank account and apply for mortgage financing and close on a real estate transaction.

“Contrary to a lot of myths out there, The Study shows that the undocumented pay a very significant share of their income to state and local taxes,” Meg Wiehe, a co-author of the report told CBS MoneyWatch. “They are also establishing roots here because they are committed to their communities.”

One in three of the nation’s undocumented families own a home, according to the ITEP report. States such as Idaho and New Mexico report undocumented ownership rates as high as 46 percent. Those statistics are based on research done by the Migration Policy Institute and data collected by the U.S. Census’s American Community Survey.

Expert opinion remains sharply divided on the impact of the undocumented on the U.S. economy.

While analysts at the conservative Heritage Foundation concede undocumented immigrant households do contribute tax revenue, they make the case that what they contribute is far outweighed by what their presence here in the U.S. costs taxpayers.

“In 2010, the average unlawful immigrant household received around $24,721 in government benefits and services while paying some $10,334 in taxes,” according to Robert Rector and Jason Richwine in their analysis for the Heritage Foundation.

“This generated an average annual fiscal deficit (benefits received minus taxes paid) of around $14,387 per household,” their analysis said. “This cost had to be borne by U.S. taxpayers. Amnesty would provide unlawful households with access to over 80 means-tested welfare programs, Obamacare, Social Security, and Medicare. The fiscal deficit for each household would soar.”

While the expert debate over this hot button issue has raged for years, Pew Research Center polling suggests American public opinion has shifted greatly since the early 1990s. In a 2015 poll, 45 percent of those surveyed expressed the opinion that immigrants were a net benefit for the U.S. versus 37 percent who felt their presence had a negative impact.

One of the ironies of the challenging financial future faced by the Social Security Administration is this seldom-discussed fact: Undocumented workers contribute about $13 billion per year to the Social Security Trust Fund, and only get back a small fraction, adding a bit of black ink to a balance sheet in sore need of a boost. These Social Security payments are a proxy of sorts for the potential power of these workers who now stand in the shadows of the economy.

The extent of their contributions hints at the vast scale of the underground economy.

The chief actuary of the Social Security Administration estimates that, out of the approximately 7 million unauthorized workers currently in the US labor force, about 3 million use either false or expired Social Security numbers.

The payroll taxes paid by these unauthorized workers go into the Social Security’s “Earnings Suspense File” — in effect, money without a lawful home.

“You could say legitimately that had we not received the contributions that we have had in the past from undocumented immigrants . . . that would of course diminish our ability to be paying benefits for as long as we now can,”. Undocumented immigrants have contributed $100 billion into Social Security over the last decade.

Major immigration reform legislation would provide work authorization and Social Security numbers for an estimated 11 million immigrants working here illegally. But without changes to protect Social Security, illegal workers whose status later changes could become entitled to benefits based on jobs worked under fake and invalid Social Security numbers. Social Security could be on the hook for hundreds of billions in new liabilities according to a new research report based on data from the Social Security Administration.

Unauthorized immigrants getting jobs show employers false or invalid Social Security numbers. When the Social Security Administration receives copies of W2s in which the name and Social Security number do not match those on Social Security’s records, they go into the Earnings Suspense File (ESF). The W2s remain on file until the earnings can be reconciled with the real worker, even if that occurs years later. Since 2000, the Social Security Administration has received about 9.3 million such W2s per year on average, representing more than $69.4 billion per year in earnings.

The earnings reported to the ESF over the past 11 years now total more than $763.5 billion, unadjusted for inflation. “Those earnings are important, because that’s what the Social Security Administration uses to determine entitlement and initial benefit amounts — not the amount of taxes paid in,” .

Although Social Security is aware of the problem, no government estimates of the potential future cost of benefits based on work under fake Social Security numbers exist.

Immigration advocates say that the taxes on earnings worked under invalid Social Security numbers help boost Social Security’s financing and that workers would have little chance of collecting benefits. “But that would change under immigration reform that provides work authorization”. “Work authorization and a valid Social Security number are the two requirements that would allow former unauthorized workers to file a claim for benefits.”

That could have significant implications for future Social Security costs because, under current law, the fraudulent use of Social Security numbers to gain employment is not penalized. “One would think that the earnings under fake Social Security numbers would not be used to calculate Social Security benefits. But to the contrary, under current policies, those earnings can be reinstated — no questions asked”.

Social Security uses all earnings to determine entitlement even for jobs worked under fake Social Security numbers. If workers have kept evidence of earnings, like copies of their W2s, tax return earnings under invalid Social Security numbers would be reinstated to the new valid number.

“Congress is considering Social Security changes that would cut the benefits of U.S. citizens and authorized workers who paid into the system under valid Social Security numbers”. “Yet our current polices reward people for the use of fraudulent Social Security numbers, undermining the financial solvency of the program”.

(In part based on an article by Robert Hennelly in MoneyWatch February 29, 2016)

Categories: Social Security Benefits | Tags: Earnings Suspense File, Social Security, Social Security Administration, undocumented workers | 1 Comment

Honorably Discharged Navy Veteran Defrauded VA and SSA of $1.5 Million

Posted on January 28, 2016 by Judge London Steverson

‘Wheelchair-Bound’ Man Caught in Disability Fraud After Seen Jet Skiing, Riding Motorcycle. He conned the VA and the SSA out of millions of dollars.

/ AP

A South Carolina man was convicted of “one of the largest” disability fraud cases in Veterans Affairs history after he was caught riding a motorcycle and going jet skiing while pretending to be wheelchair-bound.

Dennis Paulsen faces up to 20 years in prison for conning the VA and Social Security Administration (SSA) out of millions of dollars, taking nearly $10,000 a month for more than a decade.

Mr. Paulsen obtained the benefits by pretending he was unable to use his feet or hands due to a multiple sclerosis diagnosis (MS). Meanwhile, he regularly hit the gym, joined a club baseball team, played golf, and drove around in his Escalade.

“In conducting one of the largest fraudulent single disability compensation claims in VA history, Paulsen substantially feigned and exaggerated the impairment resulting from his multiple sclerosis (MS) diagnosis,” the Social Security Administration’s(SSA) Inspector General(IG) said. “After being diagnosed and discharged from the Navy in the early 1990s, Paulsen began receiving a monthly VA benefit as a result of his diagnosis. Unsatisfied with the amount he was receiving, Paulsen began a pattern of malingering by claiming his MS rendered him unable to use his hands or feet in any respect.”

“Still unhappy with the money he was awarded, Paulsen ramped up his claims, lying to his doctors, presenting himself as house- and wheelchair-bound, and making false claims that he required daily professional medical care to live until his benefits were increased to the maximum disability payments available to a Veteran,” the inspector general said.

In all, Paulsen was able to steal $1.5 million from the government, collecting $9,400 each month.

The case is reminiscent of the case of a “blind” Wisconsin man whose Social Security disability fraud scheme ended when federal agents caught him driving a speedboat. Paulsen was caught driving a motorcycle.

“Despite his feigned claims of impairments and presenting himself in a wheelchair to his doctors, Paulsen lived in a non-handicap-accessible residence and was able to ride his motorcycle and jet skis plus play baseball and golf on a regular basis,” the inspector general said. “In 1999, Paulsen met his ex-wife at the gym where he exercised and worked training others.”

Paulsen was also “active in several gyms, joined a baseball league from 2006 until 2014,” and seen “playing pool, swimming in his backyard pool, playing on the beach, and driving his Escalade and manual shift Mini Cooper.” He even participated in a Marine Mud Run.

Investigators used surveillance footage and family photographs to reveal Paulsen’s very active lifestyle, contradicting his claim of suffering from a severe disability.

Paulsen continues to exaggerate his condition, appearing at his trial in federal court, which concluded last week, in a wheelchair.

“Paulsen testified, in a wheelchair, for four hours and called three doctors as expert witnesses in an attempt to support his claim that he was and had been totally disabled,” the inspector general said. “The guilty verdict reflects that the jury did not find this testimony credible.”

(BY: Elizabeth Harrington
January 27, 2016)

Categories: Social Security Benefits | Tags: Social Security Administration, SSA, United States Department of Veterans Affairs | Leave a comment

Thousands Of Americans Afraid To Appear At Social Security Hearings

Posted on January 18, 2016 by Judge London Steverson

Attorneys worry 1,000 or more Social Security beneficiaries will lose checks when re-evaluated.

Attorneys representing hundreds of people fighting to keep their Social Security federal disability benefits worry those benefits may disappear for most of them if they do not have a lawyer.

Each year, the Social Security Administration (SSA) orders thousands of people to attend Re-Evaluation hearings to determine whether they should continue receiving disability checks.

Many of those people are former clients of Attorney Eric C. Conn.

In 2011 a story appeared in the Wall Street Journal concerning the high rate in which SSA Judges approved Social Security disability cases.

Allegations of fraud came under investigation by a U.S. Senate committee. Sen. Tom Coburn, R-Okla., was the Chairman of The Senate Committee. The Committee’s Report found widespread fraud and a veritable “disability claim factory” allegedly run by Attorney Eric C. Conn out of his small office in Stanville, Kentucky, a region of the country where 10 to 15 percent of the population receives disability payments.

The report documents how Attorney Conn allegedly worked together with Social Security Administrative Law Judge David Daugherty (ALJ) and a team of favored doctors with checkered pasts, including suspended licenses in other states, who rubber stamped approval of disability claims. In most cases, the claims had been prepared in advance with nearly identical language by staffers in Conn’s law office.

The report found that over the past six years, Attorney Conn allegedly paid five doctors almost $2 million to provide favorable disability opinions for his claimants.

In 2010, the last year for which records are available, Judge Daugherty approved 1375 disability cases prepared by Attorney Conn’s office and denied only 4 of them – an approval rate that other administrative law judges have described as nearly impossible.

Judge Daugherty, 78 years old, processed more cases than all but three judges in the U.S. He had a wry view of his less-generous peers. “Some of these judges act like it’s their own damn money we’re giving away,” ALJ Daugherty told a fellow Huntington SSA ALJ, Algernon Tinsley, who worked in the same office, Mr. Tinsley recalled.

The report found, “Judge Daugherty telephoned the Conn law firm each month and identified a list of Mr. Conn’s disability claimants to whom the judge planned to award benefits. Judge Daugherty also indicated, for each listed claimant, whether he needed a “physical” or “mental” opinion from a medical professional indicating the claimant was disabled.”

The report says that when Senate staffers and the Social Security Administration’s Office of the Inspector General began an investigation based on tips from whistle blowers in the Social Security Hearing Office, Attorney Conn and Judge Daugherty began communicating with disposable, pre-paid cell phones. It also alleges they contracted with a local shredding company to destroy 13 tons of documents.

Attorney Conn also allegedly destroyed all the computer hard drives in his office, a la Hillary Clinton at the State Department.

In 2011, the SSA placed Daugherty on administrative leave. He retired shortly after that.

In October 2013 a West Virginia Police Report said Judge Daugherty was found unconscious in his car in a Barboursville, WVa. church parking lot.

The report said the police found a garden hose running from the car’s exhaust into the passenger side of the vehicle.

Judge Daugherty was taken to a hospital and later released.

Conn has not been charged with a crime. He is suspected by congressional investigators of using fraudulent information to win the benefits. Attorney Conn’s legal fate remains in the hands of the Obama Justice Department.

A prevailing concern is that disability recipients who do not hire an attorney to represent them at their re-determination hearings will lose their benefits.

Unrepresented Claimants should not go through one of these complicated re-determination hearings without a lawyer. People appearing before SSA Administrative Law Judges (ALJ) can get a free lawyer on a contingent fee basis. The attorney does not get paid unless the client wins the case. That amounts to a free lawyer.

Many disability recipients do not hire legal representation for their hearings. They stand a good chance of losing their benefits.

Even some who were represented at Re-Determination Hearings are still anxious to hear results.

“Not knowing … that’s been the worst thing is not knowing and trying to prepare in case you do lose your benefits,” one beneficiary said.

One attorney who specializes in representing Social Security Claimants has said in recent weeks several people have told him they’ve thought about killing themselves if they lose their benefits.

“The suicide chatter is way up,” the Attorney said. “It was especially bad around Christmas. Unfortunately people have got this unfortunate response that suicide is somehow a rational response to losing their benefits”, the attorney said.

These are desperate times for many people in America who were once considered among the Middle Class. They have seen their living standards decline and are struggling to make ends meet. Many were laid off in the last eight years and have not been able to find new jobs. They are not counted in the Unemployment Statistics because they have dropped out of the labor pool. Many are between the ages of 50 and 65 and do not yet qualify for Social Security Retirement Benefits. They have not even reached the age when they would be eligible to apply for early retirement. For many Baby Boomers that is around age 62.

Categories: socialNsecurity | Tags: ALJ David Daugherty, attorney Eric Conn, Social Security Administration, Social Security Benefits, social security disability | Leave a comment

If The Social Security Administration Says That You Are Dead, You May Wish That You Were

Posted on January 1, 2016 by Judge London Steverson

(Sarah Nader – snader@shawmedia.com

By EMILY K. COLEMAN – ecoleman@shawmedia.com

Linda Grether read the letter four times.

The letter from their Medicare Part D insurance provider was addressed to the estate of her husband, John Grether, and it expressed condolences for her loss.

The thing was, John Grether wasn’t dead.

The Holiday Hills man wasn’t dead six months later, either, when a second letter arrived, or this December when a third letter arrived, but for some reason, John Grether kept getting reported as deceased to the Social Security Death Master File, resulting in a chain reaction that affected their health benefits, their Social Security income and his pension from his job as a construction company shop foreman.

Social Security receives death information from a variety of sources, primarily from family members, funeral homes, financial institutions and state governments, regional spokesman Doug Nguyen said in an email. Of the 2.8 million death reports Social Security posts each year, about 9,000 are found to be false.

That number is down from the average of more than 12,000 a year found to have been erroneously added to the Master Death File from May 2007 through April 2010 by the Social Security Administration’s Office of the Inspector General, according to a 2011 report.

Nguyen credits the increased use of electronic death registration, which automates Social Security’s receipt of death information. Illinois is among the 42 states using the system.

“Universal implementation of [the system] has the potential to virtually eliminate death reporting errors and would ensure that our death records – whether pertaining to current beneficiaries or other persons – include the most accurate and most current information,” Nguyen said in an email.

The Grethers have their suspicions for why the death reports keep happening, but they don’t understand why Social Security hasn’t been able to flag the account or otherwise prevent it from happening again.

“I just keep dying,” John Grether said. “Isn’t that something?”

Despite the wry humor, the experience has been anything but funny.

“We find out by accident [that he’s been reported deceased],” Linda Grether said. “Like all of a sudden, we’ll go fill a prescription and it’s not covered. Or the bank will call and [we] saw our accounts are over-drafted because they’ll just take the money away.”

The Grethers have had to go into the Woodstock office to prove John’s alive. They’ve spent two-plus hours on the phone each day for a week trying to get their benefits restored and to figure out how to prevent it from happening again.

When John Grether’s breathing got worse, a result of his chronic obstructive pulmonary disease, he couldn’t go to an immediate care center. They had to use his nebulizer at home.

“Until you even get a little bit, you don’t understand just how devastating the whole thing is,” Linda Grether said. “I mean, we just sat here nights and just cried because we have no way to do anything. We’re at their mercy.”

Social Security reached out to Grether after the Northwest Herald contacted them about the Grethers’ situation and is looking into what can be done.

http://oig.ssa.gov/sites/default/files/audit/full/pdf/A-06-10-20173_7.pdf

(NOTE: Summary Report from the Social Security Administration’s Office Of The Inspector General)

Follow-up: Personally Identifiable Information Made Available to the Public Via the Death Master File (Limited Distribution)

Our objective was to determine the status of corrective actions taken by the Social Security Administration (SSA) to address recommendations in our June 2008 report, Personally Identifiable Information Made Available to the General Public Via the Death Master File SSA implemented procedures to report erroneous death entry-related personally identifiable information (PII) breaches to the United States Computer Emergency Readiness Team each week. SSA also hired a contractor to provide ongoing reviews of Death Master File (DMF) exposure related to 26,930 individuals whose Personally Identifiable Information, SSA inadvertently exposed from July 2006 through January 2009. The contractor evaluated available data for anomalous patterns that could identify organized misuse. SSA stated that, to date, the contractor has identified no organized misuse. However, SSA did not implement a risk- based approach for distributing DMF information, attempt to limit the amount of information included on the DMF version sold to the public, or explore alternatives to inclusion of individuals’ full Social Security number (SSN). SSA continued to publish the DMF with the knowledge its contents included the Personally Identifiable Information of living number holders.

From May 2007 through April 2010, SSA’s publication of the “Death Master File” resulted in the breach of Personally Identifiable Information for as many as 36,657 additional living individuals erroneously listed as deceased on the DMF. SSA made these individuals’ SSNs; first, middle, and last names; date of birth; and State and ZIP codes of last known residences available to users of the DMF before learning they were not actually deceased. As such, we believe SSA should take additional precautions to limit the number of reporting errors and the amount of personal information published in the DMF —

particularly the version sold to the public. We made two recommendations for corrective action.

The (SSA) Agency disagreed with both recommendations.

Categories: socialNsecurity | Tags: Social Security Administration, SSA | Leave a comment

How To Win Your Social Security Disability Claim? Simple, Find The Right Judge.

Posted on March 9, 2015 by Judge London Steverson

Disability Claim Denied? Find the Right Judge

Nine percent of the judges who hear appeals grant benefits 90% of the time, costing taxpayers tens of billions.

To all parties involved in a trial, the slam of a gavel should indicate that justice has been served. Unfortunately, this is often not the case with Social Security Disability (SSDI and SSI) appeals. A system designed to serve society’s vulnerable has morphed into a benefit bonanza that costs taxpayers billions of dollars more than it should. The disability trust fund will become insolvent in 2016, and Congress would be wise to begin much needed reform.

A disability applicant whose claim is rejected during the Social Security Administration’s (SSA) first two stages ( before State Disability Determination Services) can appeal the decision to administrative-law judges (ALJ). These judges must impartially balance the claims of the applicant against the interests of taxpayers.

Over the past decade judicial impartiality has declined significantly, as many administrative-law judges uncritically approve most claims. In 2008 judges on average approved about 70% of claims before them, according to the Social Security Administration. Nine percent of judges approved more than 90% of benefit requests that landed on their desks.

Do nine out of every 10 applicants appealing denied claims need societal support? There are reasons for skepticism. The data show that judges who are generous in granting benefits are consistently generous over time—which is suspicious, since each year they should hear a random set of new cases. The more discerning judges—those who award benefits less than 90% of the time—are more unpredictable from year to year.

(Photo: Getty Images/Illustration Works)

If the judges with award rates topping 90% are removed from the data, the rate of denial increases by 2%-3% annually. That amounts to 98,000 claims from 2005-11. Assuming an average lifetime award of $250,000, taxpayers would have saved $23 billion over those six years had the worst judges left the bench. If we lower the threshold to exclude judges with award rates north of 85%, these savings increase to $41 billion.

Former Social Security Commissioner Michael Astrue, who took office in 2007, made much-needed changes. Incompetent incumbents saw their influence diluted by new judges drawn from fresh candidate lists. Judicial decisions are now randomly reviewed to ensure that the court remains impartial and fair to taxpayers. Judges were limited to hearing 1,000 cases a year (the figure has since been lowered to 700), and individuals are allowed only one disability application at a time.

Mr. Astrue’s reforms have produced good results. In 2011 judges with award rates exceeding 90% heard a mere 4% of all cases, a 63.6% decline from 2008. But Mr. Astrue’s term expired in 2013, and these changes can easily be undone, either intentionally by future administrators, or unintentionally as bad habits slip back into the system.

His program to increase accountability and judicial turnover should be made permanent. Congress should also institute 15-year term limits for judges, who currently enjoy lifetime tenure, to ensure that fresh legal minds are joining the stale judicial aristocracy. A term of a decade and a half is long enough to insulate judges and prevent undue political influence.

The system faces a huge backlog, made worse by claimants who play adjudication roulette, filing and then withdrawing appeals in hopes of drawing a generous judge. Congress can limit this gamesmanship by allowing only one application per claimant in a three-year period. Because judges must marshal more documentation for a denial than an approval, they have an incentive to grant benefits to keep the system chugging along. The agency can fix this by further limiting the number of cases each judge must decide to 500 from 700.

The system is further complicated because even if a claimant has legal counsel, the judge must advocate on the claimant’s behalf. This dual role should be ended. Most claimants—85%—now have third-party representation. These professionals should be held responsible for getting supporting materials into court expeditiously and completely so the record can be closed in a timely manner.

Even under better legal rules, judges will still face rigid and outdated guidelines for granting benefits. The framework they must follow—known as the Medical Vocational Grid (known as The Listings)—is formulaic to the point of senselessness. For instance, the bar to benefits approval is lower for someone who doesn’t speak English, on the theory that it is difficult to find a job without the language. But that English rule is also applied to claimants from Puerto Rico, where the language of business is Spanish.

These guidelines (in The Listings) also do not give due consideration to actual labor market experience, dictating a looser approval standard for someone with only a high-school degree, even if the person has succeeded in the labor force for decades.

The framework (of The Listings) was developed in the late 1950s, for the previous generation’s workforce, and hasn’t been updated since 1978. Decades ago workers ages 50 or 55 might have been considered retiring, but this is no longer generally the case. Novel job-training programs also make it easier than ever for workers to move into new fields and make up for low levels of education, and new disability criteria would account for these changes.

These solutions would begin to deliver meaningful reform to Social Security disability awards. They can restore dignity and efficacy to a troubled system.

(BY Mark J. Warshawsky And Ross A. Marchand, March 8, 2015)

(Mr. Warshawsky is a visiting scholar at the Mercatus Center of George Mason University and a former member of the Social Security Advisory Board from 2006 to 2012. Mr. Marchand is a first-year economics graduate student at George Mason University.)

Categories: socialNsecurity | Tags: Commissioner Michael Astrue, Commissioner Mike Astrue, congress, Social Security, Social Security Administration, social security disability, socialNecurity, State Disability Determination Services | Leave a comment

Social Security Disability Firm Binder & Binder Files for Bankruptcy

Posted on December 21, 2014 by Judge London Steverson

Social Security Disability Firm Binder & Binder Files for Chapter 11 Bankruptcy

The Law Firm, Binder & Binder, a Long Island-based national Social Security Disability law firm had to reduce institutional debt after payments from the federal government slowed. The firm is dependent upon government-paid fees earned from shepherding Social Security Disability claimants through the system.

The firm is now facing a shrinking number of people seeking benefits and tougher scrutiny from the Social Security Administration (SSA) Administrative Law Judges (ALJ) who decide cases.

Binder& Binder has about 58,000 active cases or its 966 employees, many of whom aren’t lawyers. (In 2004, Congress made it easier for non-lawyers para-legals to represent applicants for Social Security disability benefits.)

In projections filed in court papers, Binder estimates its employee head count will drop to less than 400 over the next two years.

Charles Binder began representing applicants for Social Security Disability Benefits with his brother, Larry, in the 1970s. In 2010, Binder & Binder scooped up $88 million in fees representing applicants for Social Security Disability Benefits (SSI/SSDI). It was the largest firm of its kind, thriving amid an aging workforce, high unemployment and less oversight than in the current environment.

On Thursday night, the firm filed for bankruptcy protection.

The Wall Street Journal reports:

The firm listed assets and liabilities each between $10 million and $50 million in a bankruptcy petition filed in U.S. Bankruptcy Court in White Plains, N.Y.

Those debts include $23 million in secured debt to lenders U.S. Bank and Capital One Bank and $16.7 million in unsecured debt to Stellus Capital Management, a spinoff of investment firm D.E. Shaw & Co., court filings show.

U.S. Bank and Capital One Bank are prepared to lend up to $26 million in bankruptcy financing, filings show, subject to court approval.

The firm is dependent upon government-paid fees earned from shepherding Social Security disability claimants through the system.

The firm is now facing a shrinking number of people seeking benefits and tougher scrutiny from the Social Security Administration (SSA) Administrative Law Judges (ALJ) who decide cases.

In projections filed in court papers, Binder estimates its employee head count will drop to less than 400 over the next two years.

U.S. Bank National Association and Capital One have agreed to provide debtor-in-possession financing of up to $26 million, the filings showed.

The case is in the U.S. Bankruptcy Court Southern District of New York, Case No: 14-23728.

The move will allow the firm to reduce institutional debt after payments from the federal government slowed, hurting cash flow, said Kenneth Rosen, an attorney with Lowenstein Sandler representing Binder & Binder. The company listed both assets and liabilities of between $10 million and $50 million, according to court papers filed in U.S. Bankruptcy Court in the Southern District of New York.

“We have filed papers to pay our employees in the ordinary course. We don’t want the employees to feel anything; they will not. We don’t want the clients to feel anything; they will not,” Mr. Rosen said. “The last thing we would want is there to be any interruption. It’s business as usual.”

U.S. Bank and Capital One made a $23 million secured loan to the company. The financing will allow for operations to continue without interruption, Mr. Rosen said.

The law firm, with about 57,000 clients, has approximately 900 employees in 13 states, including New York, where it has offices in Manhattan, the Bronx, Long Island City and Hauppauge, L.I.

The company’s largest unsecured creditor was Houston-based Stellus Capital Management, which had loaned the company $16.7 million. Google and Manhattan-based Integrated Media Solutions were also among the firm’s largest creditors, with $800,000 and $2.7 million owed for services, respectively.

Manhattan management consultant Development Specialists will provide a chief restructuring officer to manage the bankruptcy and improve operating performance, according to the filing.

Binder & Binder was founded in 1975 by brothers Harry and Charles Binder. Charles would appear in TV commercials, saying in the ads “You have enough to worry about.”

(By Jonathan LaMantia ,December 19, 2014)

When reached for comment, while vacationing in Hungary Judge London Steverson, USALJ (Retired)

formerly of the Downey, California, Social Security Office Of Hearing And Appeals had this to say: “Wow! What a surprise.

I really like Manny Serpa, Esq. He usually represented Binder&Binder in cases that came before me. His cases were usually well prepared and he did a good job of presenting the merits of the claimant’s case. And he won most of his cases. In 1990 the attorney would get an average fee of about $750 for winning a case, but they had to chase the client to get paid, because SSA did not withhold money and pay the attorney directly. Well, in 2009 when I retired the minimum fee was $2 thousand to $3 thousand per case, and the Government would hold back the money and pay the attorneys. Of course, some law firms would collect up to $28 thousand dollars in attorneys fees for a case with large amounts of past due benefits. It was a high volume business with rapid turnover. Even a para-legal could make $1 million dollars a year if he got enough referrals. I never did agree with the idea that para-legals should get paid at the same rate as lawyers, since para-legals do not have a law school education and are not members of the Bar. But, no one listened to me.

http://www.amazon.com/socialNsecurity-Confessions-Social-Security-Judge/dp/1449569757

I just can’t believe that a law firm specializing in Social Security benefits would ever go bankrupt. It’s the easiest legal job in the world. The cases are all tried before a judge sitting alone without a jury and the other side is not represented. The lawyers are nothing more than baby-sitters for the claimants, and the judges ask all the questions at the Hearing. It is like losing an uncontested divorce; it never happens. That is why it is so astounding to hear that Binder&Binder is going bankrupt. There must be some other reason; possibly some kind of gross mismanagement, or some one might have been siphoning funds under the table. I’m not saying that that is a possibility, but this whole thing does not sound quite right to me. As we used to say in the Coast Guard “it will all come out in the wash”. I wish old Manny Serpa well.”

What Binder & Binder’s Bankruptcy Means for Your Disability Law Practice

(Nathan Chapman, President of The Marketing Center, sees opportunity for your practice in 2015 from Binder & Binder’s bankruptcy)

If you’re a Social Security Disability attorney, you don’t need anyone to tell you 2014 has been challenging.

On the other hand, if you think you had a bad year, at least you don’t owe $40 million.

According to news reports at the end of last week, national disability advocacy firm Binder and Binder “is preparing for a possible Chapter 11 bankruptcy filing… as it faces roughly $40 million of debt and shrinking demand for its services amid tightening government scrutiny of claims.”

Gee, it wasn’t so long ago The Wall Street Journal reported, “The $88 million the Binder firm collected in 2010 was more than triple the $26 million it got in 2006, according to data obtained under a Freedom of Information Act request.”

We can trust that H.I.G. Private Equity, which bought a stake in Binder & Binder in 2010, knows some good lawyers and accountants. So, I don’t want to write today about the Goliaths. What’s it all mean for the Davids of the Social Security Disability profession?

What We Heard in 2014…

I like to joke that at our specialized marketing agency for disability attorneys, we talk to more disability lawyers than anyone in America other than Barbara Silverstone. So what did we hear in 2014? Well, a lot of pain and concern – starting with repercussions from the October 2013 federal government shutdown. That resulted in claimant files that didn’t get processed, hearings that didn’t get scheduled, benefits that didn’t get awarded and, yes, legal fees that didn’t get paid.

And then there were the horror stories of ALJs being coached and even punished when they awarded benefits too often. We all cried, “Where is the similar coaching for the judges who deny too many?”

I know of some Social Security attorneys who went into early retirement in 2014. Others laid off staff. The Davids were getting hit by some pretty large slingshot rocks.

Yet, not every conversation with a disability attorney in 2014 was one of pain. While some attorneys may have gotten out, others called us to get in: Yes, there are still attorneys wanting to enter the disability arena, or if already there, to ramp up their practices.

Most significantly, I remember one particular conversation with a disability attorney that was a message of hope. I repeated it often to others. While commiserating about the problems of this era, this attorney said to me: “The attorneys who are having the hardest times are the ones who have been doing the same thing the same way for so long, they are unable or unwilling to change. Those are the ones most in trouble.”

Resolve to Evolve in 2015…

“…Unable or unwilling to change.” Those words linger in the air as we cross over into a new year.

At the Las Vegas NOSSCR Conference this year, we presented a clients-only Internet-themed presentation entitled, “Evolve or Die.” (Watch for it as a webinar early next year.)

Here are some ways that your disability law firm can consider changing:

Diversification. We think you should consider diversifying your client base. In 2014, we created new television and/or Internet marketing campaigns for LTD cases, Veterans Disability, Workers’ Compensation, Bankruptcy, Special Education, Employment Law and even Personal Injury for attorneys who also represent Social Security claimants.
Improve your Website Conversion. Much is written how SEO can help a Social Security Disability lawyer rank higher in search engine results for increased traffic. We recommend equal study, testing and improvements to help your law firm’s website convert a greater percentage of the traffic into actual leads.
Paid Search. When handled by pros and reinforced with branding efforts, a Paid Search campaign be more cost efficient via better conversion than buying leads that have no branding element to them.
Better Branding. If you agree that not all attorneys are alike, shouldn’t they not look alike? In 2014, The Marketing Center handled more logo and brand refreshes than any other year in our history.
Initial Applications. It’s more important than ever that your marketing messages urge claimants to call when they need to apply, not just after being denied. Then, resolve to get efficient in handling those applications.
Believe in yourself. American history shows that in periods of economic panic and market contractions, there are always some who use the retreat by others as an opportunity to grow their brand while competition, in this case Binder & Binder, is less active. Fortunately, at The Marketing Center, we’ve had those conversations in 2014 as well.

For 2015, The Marketing Center’s clients have booked a greater amount of marketing exposure than the year we leave behind. We see that as a positive sign for all – one of hope, optimism and confidence.

Here’s hoping YOU have a prosperous new year. Of course, let us know if you’d like some help with that.

Categories: socialNsecurity | Tags: Binder & Binder, Confessions of a Social Security Judge, Judge London Steverson, Social Security Administration, social security disability, Social Security disability benefits, socialNsecurity | Leave a comment

Acting Social Security Commissioner Fails To Get Senate Confirmation Due To Possible Criminal Investigation

Posted on December 15, 2014 by Judge London Steverson

On February 14, 2013, Carolyn W. Colvin became the Acting Commissioner of the Social Security Administration (SSA). Prior to this designation, she served as a Deputy Commissioner at SSA. Several high-level members of her inner circle of advisers are at the center of an investigation concerning a dysfunctional, $300 million computer system. An Inspector General’s (IG) Report has raised the possibility of a criminal investigation.

The Senate canceled vote on President Obama’s pick for Social Security Commissioner. Obama pick to head Social Security runs into more trouble; Senate cancels confirmation vote.

(AP)(14 Dec. 2014) — President Barack Obama’s pick to head the Social Security Administration has run into more trouble after Senate Democrats canceled a procedural vote on her nomination.

All 11 Republicans on the Senate Finance Committee signed a letter to Colvin on Wednesday, December 10th, noting that new information had come to light about a dysfunctional, $300 million computer system intended to speed the processing of disability claims. An interim inspector general (IG) report has raised questions about whether agency employees misled Congress about the extent of the problem, the lawmakers said.

“We cannot in good faith allow a nomination for any position that requires the advice and consent of the Senate to proceed to a vote as long as the specter of a potential criminal investigation surrounds the nominee and/or those in their inner circle,” read the letter from Utah Sen. Orrin Hatch, the top Republican on the committee, and its other GOP members.

“Agency representatives previously briefed members of the Senate and House regarding the issues raised in the Senate Republican Finance members’ letter,” the spokeswoman, LaVenia LaVelle, said in the statement. “The acting commissioner will respond timely and fully to the members requests, and continue to cooperate with Congress and any related investigation.”

Aides have long noted that the troubled computer system, which was intended to speed the processing of disability claims, was implemented under Colvin’s predecessor, Michael J. Astrue. And they have said that Colvin began a thorough investigation of the matter when she took over the agency last year.Still, the opposition from Republicans in the waning days of the lame-duck session of Congress threw Colvin’s confirmation into question. The current Congress is set to adjourn as soon as next week — and the Senate calendar will become increasingly full between now and then.

While senators have sped through several confirmations since the midterm elections, they have dealt mainly with non-controversial appointments. Colvin’s term, if she is confirmed, would last for six years, well into the next presidential administration.

And when the new Congress gavels in next month, the Senate will be controlled by Republicans, giving concerns raised by Republicans on the Senate Finance Committee added weight.Neither of Maryland’s Democratic senators, Barbara A. Mikulski and Ben Cardin, have responded to request for comment. Cardin is a member of the Finance Committee, which oversees Social Security.

The agency came under scrutiny this year amid revelations that it spent nearly $300 million and six years developing the computer system for disability claims, and it still does not work. The problems were known during Colvin’s confirmation hearing, and while Hatch mentioned them at the time he did not ask Colvin about them.

In their letter, the senators pointed to a news release from a House subcommittee last month regarding an interim IG Report that raised the possibility of a criminal investigation. The letter said the senators have sought to better understand the nature of that investigation but have been unable to do so because the probe is continuing.

“We have received information from whistleblowers that the ongoing investigation has centered around the activities of certain members of your immediate office, including several high-level agency officials,“ the senators wrote. “Therefore, it is essential to address your role with respect to this inquiry before each of us can make an informed decision on how to vote for your nomination once it reaches the full Senate for consideration.”

Obama nominated Carolyn W. Colvin to a six-year term as commissioner in June, and Colvin’s nomination cleared one procedural hurdle in the Senate Saturday, Dec. 13. However, Senate Majority Leader Harry Reid, D-Nev., canceled an upcoming vote, making it likely Colvin won’t get a vote until next year, when Republicans take control of the Senate.

Colvin’s nomination would have taken up valuable floor time as the Senate rushes to finish its year-end business. Senators could speed the process but that would require a bipartisan agreement.

Colvin’s nomination first ran into trouble when a group of Republican senators said they would try to block it while investigators look into a $300 million computer project at the agency.

The project, which doesn’t work, predates Colvin’s tenure — she has been acting commissioner since Feb. 2013. But an inspector general’s investigation is ongoing.

“I don’t know how the Senate can, with good conscience, vote to confirm anyone with this type of ongoing investigation going on around their immediate office,” Sen. Orrin Hatch, R-Utah, said in a floor speech. “It may very well turn out that Ms. Colvin did nothing wrong, but we need to know for sure.”

Colvin defended her integrity and her long career in government in a recent interview with The Associated Press.

“I’ve worked in government my entire life. There’s never been a suggestion, personal or professional, of any wrongdoing,” Colvin said in the interview, which had been scheduled before the controversy erupted.

“I’m certainly not ending my career with that,” Colvin continued. “I came out of retirement to help this organization, not hurt it.”

Six years ago, Social Security embarked on an aggressive plan to replace outdated computer systems overwhelmed by a flood of disability claims. But the project has been racked by delays and mismanagement, according to an assessment commissioned by the agency over the summer.

The new computer system is supposed to help workers process and manage disability claims. But the project is still in the testing phase and the agency can’t say if it will ever be operational or how much it will cost.

Colvin, 72, first worked as a deputy commissioner at Social Security in the 1990s. She left the agency in 2001 to become director of human services for the District of Columbia. She later had a similar job in Montgomery County, Maryland.

Colvin returned to Social Security in 2010 as deputy commissioner.

(By Stephen Ohlemacher, AP)

Throughout her career, Ms. Colvin has managed programs that help people with their healthcare and financial needs. She previously held key executive positions at Social Security Headquarters: Deputy Commissioner for Policy and External Affairs (1994–1996), Deputy Commissioner for Programs and Policy (1996–1998), and Deputy Commissioner for Operations (1998–2001).

Prior to returning to SSA, Ms. Colvin was the Director of Human Services for the District of Columbia (2001-2003); the Director of the Montgomery County Department of Health and Human Services (2003-2007); the Chief Executive Officer of AMERIGROUP Community Care of the District of Columbia (2007–2008); and, the Special Assistant to the Secretary of Maryland’s Department of Transportation (2009-2011). In addition, Ms. Colvin served as the Secretary of Maryland’s Department of Human Resources (1989-1994).

Ms. Colvin has received numerous awards and recognition for her managerial expertise and creativity, including Maryland’s Top 100 Women Award from the Daily Record (2005) and the Women of Achievement Award from Suburban Maryland Business and Professional Women (2005). She has served on a variety of boards and commissions, including the National Committee to Preserve Social Security and Medicare.

Ms. Colvin earned her graduate and undergraduate degrees in business administration from Morgan State University. Additionally, she completed the Senior Executives in State and Local Government Program at Harvard University, the Maryland Leadership Program, and the Greater Baltimore Leadership Program. Ms. Colvin is from Maryland and currently resides in Anne Arundel County. She has one son and six grandchildren.

Categories: socialNsecurity | Tags: Michael Astrue, President Obama, Social Security, Social Security Administration, socialNecurity, the Senate | Leave a comment

Security Guard Sues Social Security Judge For Sexual Assault

Posted on October 12, 2014 by Judge London Steverson

Woman claims she was assaulted by judge, sues for $3 million

The Duryea woman who said she was groped by a federal administrative law judge (ALJ) from the Social Security Administration (SSA) has sued two government agencies, SSA and (Department of Homeland Security) DHS, for $3 million, according to court papers filed Tuesday.

Alice De Quevedo has accused Judge Sridhar Boini of grabbing her breast and attempting to kiss her non-consensually in July 2012.

She was working as a security guard at the Social Security Administration’s office in downtown Scranton when the judge, who reviews Social Security cases, allegedly assaulted her.

Mrs. De Quevedo agreed to the use of her name.

Last year, the plaintiff filed the complaint directly with the Social Security Administration, which employed Judge Boini, and the federal Department of Homeland Security (DHS), which is responsible for protecting federal property. The action was required as a prerequisite to the civil suit in federal court.

Now she’s suing them for failing to protect her from abuse.

Mrs. De Quevedo immediately reported the 2012 incident to Scranton police. An investigation revealed Judge Boini was previously accused in 2011 of similar conduct with another woman.

He pleaded guilty in January 2013 to a simple assault charge involving Mrs. De Quevedo and was sentenced to three months of house arrest and two years of probation. The other charges involving the second woman were dropped in exchange for the plea.

Larry Moran, Mrs. De Quevedo’s attorney, has said that the fact federal officials knew of a previous accusation against Judge Boini makes his client’s case all the more egregious.

(By PETER CAMERON)

Contact the writer: pcameron@timesshamrock.com, @pcameronTT on Twitter

Categories: Social Security Judges | Tags: Alice De Quevedo, De Quevedo, Department of Homeland Security, Social Security Administration, Sridhar Boini | Leave a comment

The Earnings Suspense Fund at Social Security

Posted on October 1, 2014 by Judge London Steverson

One of the ironies of the challenging financial future faced by the Social Security Administration is this seldom-discussed fact: Undocumented workers contribute about $13 billion per year to the Social Security Trust Fund, and only get back a small fraction, adding a bit of black ink to a balance sheet in sore need of a boost. As President Obama mulls whether and when to enact executive orders that would affect the status of up to 11 million undocumented immigrants in the country, these Social Security payments are a proxy of sorts for the potential power of these workers who now stand in the shadows of the economy.

These immigrants are often accused of creating outsize social services costs, but in this important instance the opposite is true. Undocumented workers using fake, invalid, or borrowed Social Security numbers are subject to payroll taxes but usually receive nothing back. The extent of their contributions hints at the vast scale of the underground economy — and at the economic benefits that could be harnessed by giving undocumented workers a legal way to move out of it.

The chief actuary of the Social Security Administration recently told Vice News that, out of the estimated 7 million unauthorized workers currently in the US labor force, about 3 million use either false or expired Social Security numbers. The payroll taxes paid by these unauthorized workers go into the Social Security’s “Earnings Suspense File” — in effect, money without a lawful home.

Major immigration reform legislation would provide work authorization and Social Security numbers for an estimated 11 million immigrants working here illegally. But without changes to protect Social Security, illegal workers whose status later changes could become entitled to benefits based on jobs worked under fake and invalid Social Security numbers. Social Security could be on the hook for hundreds of billions in new liabilities according to a new research report based on data from the Social Security Administration.

Unauthorized immigrants getting jobs show employers false or invalid Social Security numbers. When the Social Security Administration receives copies of W2s in which the name and Social Security do not match those on Social Security’s records, they go into the Earnings Suspense File (ESF). The W2s remain on file until the earnings can be reconciled with the real worker, even if that occurs years later. Since 2000, the Social Security Administration has received about 9.3 million such W2s per year on average, representing more than $69.4 billion per year in earnings.

Although Social Security is aware of the problem, no government estimates of the potential future cost of benefits based on work under fake Social Security numbers exist.

Immigration advocates say that the taxes on earnings worked under invalid Social Security numbers help boost Social Security’s financing and that workers would have little chance of collecting benefits. “But that would change under immigration reform that provides work authorization”. “Work authorization and a valid Social Security number are the two requirements that would allow former unauthorized workers to file a claim for benefits.”

Categories: socialNsecurity | Tags: Social Security, Social Security Administration | Leave a comment

More Bad News From Social Security

Posted on September 9, 2014 by Judge London Steverson

The Biggest Change to Social Security You’ve Never Heard About

There’s been lots of debate and discussion lately about how to shore up Social Security for future generations. But already there are dramatic changes underway that threaten to end Social Security as we know it — yet almost no one has even heard of it.

The plan is called Vision 2025, and every working American has a stake in it.

To explain the significance of what’s going on, let me paint a picture. Say you’re the CEO of a major corporation doing $850 billion in business annually out of 1,200 locations across the country. More than 43 million clients walked through your doors in the past year, seeking one-on-one appointments with your experienced customer service representatives on matters affecting their financial security.

But there’s a storm brewing. You’ve lost 12 percent of your employees in just the past three years, and another third of the workforce is projected to retire in the next decade. Customer demand is breaking records, yet failure to fill vacancies means longer waits for appointments. Customers are waiting three times longer than last year for assistance on your 1-800 phone line, while the website that was set up to take pressure off your field offices can’t meet demand either.

So what do you do? If you’re the head of the Social Security Administration, you lay out a plan to close most of your 1,200 field offices, not replace the 30,000 employees about to walk out the door, and force your customers to conduct nearly all of their business using a phone line and website that already are overwhelmed.

This is the real-life scenario playing out at SSA right now, and the ramifications of decisions made today will affect every working man and woman in this country for generations.

This fall, SSA will unveil its long-range strategic plan for the next 10 years, the so-called Vision 2025 plan. A draft of the plan, being developed for SSA by the National Academy of Public Administration, is frightening:

The bulk of SSA’s field offices would be shut down, leaving the agency with a “significantly smaller and more virtual workforce.”
Many of the employees left behind would be “generalists” who lack the technical skills and expertise to address benefits questions.
Customers could reach an actual claims representative only in “very limited circumstances,” either through in-person visits, phone calls, online chats or video conferences. In the vast majority of cases, the only way to interact with SSA would be through “online self-service delivery.”

Self-service checkout may work at grocery stores, but it’s not the right model for an agency tasked with determining complex retirement and disability benefits for tens of millions of Americans each year. Do they really expect grandpa to hop on his iPad Mini to apply for benefits and get all his questions answered?

Most of the individuals contacting SSA for help are elderly, disabled or indigent. Many others are active seniors who simply are overwhelmed by the complicated maze of laws, regulations and policies pertaining to retirement benefits. They deserve and expect face-to-face interaction with skilled employees who can ensure they receive all the benefits they are owed.

Unfortunately, SSA seems determined to cannibalize itself. In addition to leaving thousands of positions vacant, management already has shuttered 80 field offices and dramatically reduced hours at remaining offices — even before its strategic plan is finalized.

As the representative for the bulk of SSA’s workforce, our union is working hard to save Social Security for current and future generations. This week, we plan to submit testimony at a congressional hearing on SSA’s plan to dismantle the program. AFGE will not let it die without a fight.

I urge you to join the discussion about a program that all of us will ultimately depend on. Your retirement security is at stake.

( By J. David Cox Sr., National President of the American Federation of Government Employees, which represents more than 670,000 federal and D.C. government employees nationwide, including more than 28,000 SSA field office employees across the country

Categories: Social Security Benefits | Tags: Social Security, Social Security Administration, SSA | Leave a comment