Feature

The great e-fraud of America

Such electronic processing may be efficient, but it creates virtual “cash machines” for organized criminals, said Malcolm Sparrow at the Los Angeles Times.

Malcolm SparrowLos Angeles Times

Washington’s use of electronic payments to disburse government funds has created “perfect targets for fraud,” said Malcolm Sparrow. The government distributes Medicare payments, tax credits, and welfare support automatically and electronically, but it’s laughably easy for crooks to game the system and rob it blind.

We’ve all heard the “never-ending stream of Medicare and Medicaid rip-off stories,” but the larceny is hardly limited to health care. One part of the 2009 economic stimulus package designed to help first-time homebuyers awarded $9 million in sham payments to 1,300 prisoners, some of whom were serving life sentences. A $5.8 billion program to encourage energy-saving home improvements cut checks to infants, prisoners, and others who did not own homes.

This wholesale theft is possible because “fraud perpetrators have only to learn the rules” in order to bilk the system with impunity. Claims are often processed without ever being seen by an actual person. Such electronic processing may be efficient, but it creates virtual “cash machines” for organized criminals. We need a “fundamental reassessment” of these faulty payment systems.

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