– The Washington Times
Leticia Mariscal seemed to have hit on a nearly foolproof scam.
She worked for the Department of Social Services of Madera County, California, where she handled food stamp cases.
For more than four years, starting in late 2020, she would scour the county’s databases for elderly or deceased people, approve their benefit claims, print EBT cards in their names and use them for personal purchases. She found noncitizens to be particularly enticing targets. She called to ask pointedly about immigration records, figuring she would scare them into forgoing benefits and then grab them for herself.
In Nevada’s Clark County, an employee with the Public Guardian’s Office would peruse records looking for dead residents whose estates were being administered by the county, prosecutors charged. She accessed their financial accounts and transferred nearly $30,000 to pay down her personal credit card.
Congress and President Trump have complained about massive fraud by immigrants, street gangs, international organized crime syndicates and everyday Americans.
In many cases, though, the fraud is coming from inside the house.
Through pandemic assistance, food stamps, Social Security checks and tax refunds, government employees are bilking taxpayers and those legitimately seeking services out of their money.
That includes federal workers, such as those at the IRS or Social Security Administration, who exploit their inside access. It also includes state and local workers who end up doling out hundreds of billions of dollars that Uncle Sam sends to the states to provide housing, food, medical and cash assistance.
“With $1.4 billion of taxpayer dollars lost to fraud each day, we need accountability at all levels,” said Sen. Joni Ernst, an Iowa Republican who has made a cottage industry of embarrassing bureaucrats caught with a hand in the cookie jar. “Any bureaucrat busted for treating government benefits like a self-service buffet should be served their next taxpayer-funded meal behind bars.”
Ms. Ernst is part of a group of lawmakers pushing for legislation to make payments more deliberate, changing the pay-and-chase model in which governments shovel money out the door and only later try to figure out whether it went to the right place.
Rep. James Comer, Kentucky Republican and chair of the House Oversight and Government Reform Committee, is leading that push in the House.
“Every single member of Congress should find this rampant fraud unacceptable,” he told The Washington Times. “Any federal employee who engages in fraud should be fired and prosecuted to the fullest extent of the law.”
The National Insider Threat Special Interest Group, at the request of Ms. Ernst’s office, which commissioned it for the Department of Government Efficiency, produced a report last year examining fraud by government employees. It called the amount of losses “staggering” and concluded that it had become an “acceptable norm.”
“This mentality would not be acceptable in a profit-driven corporation,” the report said.
The group cataloged more than 320 insider threat incidents in the federal government alone from 2020 to 2024. It singled out the Defense Department, the Department of Veterans Affairs and the U.S. Postal Service as particularly troubling.
The group said agencies take care to protect their networks and data against technical threats, but the problem is not just a technology issue.
“How would you like it if your personal bank account had money taken out of your account on a regular basis, to fund the malicious objectives of bank employees? There is really no difference,” the report said.
Even small targets can add up.
Lisa Figge, a National Park Service employee, was caught on video in 2023 counting out the money she had collected from guided tours and campsites at Ozark National Scenic Riverways and pocketing $1,200 of it.
When authorities started investigating, they found she had been doing it for years. She admitted to stealing nearly $250,000.
She was placed on probation for five years and ordered to pay back the money.
A logistics worker at a Veterans Affairs medical center in Ohio used his position to order nearly $200,000 worth of iPads, iPhones and other electronics. He kept some for himself and sold others for cash.
At the State Department, Levita Almuete Ferrer, a budget analyst, used her access to a government QuickBooks account to cut checks directly to herself or to an individual with whom she had a personal relationship. She would then fabricate the records to make it appear as an official expenditure.
She wrote 63 checks in all, stealing $657,347.50.
Ferrer told the judge she stole the money to fuel a gambling addiction she developed because of stress related to the COVID-19 pandemic.
A housing authority employee in Palatka, Florida, was pulling a similar scheme. He created his own company and then directed 48 payments to it over two years. He managed to walk away with $155,706.
In New York City, Olabanji Otufale, a convicted fraudster, was nevertheless working as a fraud investigator for the city’s Department of Homeless Services. He used his access to databases to steal identities of homeless people who had applied for shelter beds or food assistance and then had a confederate, Marc Lazarre, apply for unemployment benefits in their names.
They weren’t very successful, because the homeless often beat them to the punch.
At one point, Lazarre complained that the homeless had already applied for unemployment in their own names, effectively blocking the fraudsters’ claims.
“Told you these bums b on it,” he texted Otufale.
The pair ended up netting just $182, and each was sentenced to more than two years in prison.
It is not just about having access. Government employees often bring inside knowledge that helps fuel the scams.
IRS employee Rodney Quinn Rupe attempted to steal more than $2 million in tax credits from oil giant Exxon Mobil Corp. He shifted the credits to an account he created for a company he controlled and belatedly applied them to a prior tax year, figuring the IRS would then cut him a refund check.
It did, but Rupe had trouble depositing the check and was ultimately arrested before he could.
His attorney said he blamed Exxon Mobil for the 2016 death of his daughter in a car accident, which he claimed happened on land Rupe associated with the oil firm. Trying to steal the money was his attempt to punish the company.
Still, the attorney said that since he didn’t actually get any of the money, giving him prison time would be “grossly unjust.” The judge disagreed and slapped him with a one-year prison sentence.
• Stephen Dinan can be reached at sdinan@washingtontimes.com.
