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COUNTY FRAUD EXPLODES $2 BILLION ANNUAL TAB FOR WORKER, PUBLIC ABUSE.



Byline: TROY ANDERSON Staff Writer

After downplaying the scope for years, Los Angeles Los Angeles (lôs ăn`jələs, lŏs, ăn`jəlēz'), city (1990 pop. 3,485,398), seat of Los Angeles co., S Calif.; inc. 1850.  County officials have started to quietly acknowledge that scams by county employees and recipients of county services may be costing taxpayers nearly $2 billion a year.

While there are no exact figures, the county Grand Jury last summer estimated welfare recipients are defrauding taxpayers of $500 million a year. Prosecutors have estimated fraud in the food stamp food stamp
n.
A stamp or coupon, issued by the government to persons with low incomes, that can be redeemed for food at stores.

Noun 1.
, in-home care and health care programs costs more than $200 million.

``It's as though in all the public assistance programs -- be it welfare, food stamps, child care or Section 8 housing -- someone put a pot of gold in the middle of the street and walked away from it with very little integrity controls,'' said James Cosper, head deputy in the District Attorney's Office Welfare Fraud Division.

``It's bad throughout the entire county. ... We do two or three major sweeps a year where we go out and arrest people. In case after case, they are driving Beemers, Lexus and Mercedes automobiles, or we have evidence they are taking expensive vacations, going on very nice cruises or living in expensive homes.''

And it's not just service recipients who are defrauding the county. The national Association of Certified Fraud Examiners Established in 1988 the Association of Certified Fraud Examiners is the professional organization that governs professional fraud examiners. Its activities include producing fraud information, tools and training.  estimates 5 percent of all business and government agency revenues are lost to employee fraud, waste and abuse each year.

That would mean L.A. County government -- with a $21 billion budget -- loses at least $1 billion a year.

Employee fraud up

Investigations of county employee fraud have surged from 340 in 2000 to 583 in 2005 amid increased calls to a county fraud hotline.

Calls to the hotline hit 621 in 2003-04 and are projected to reach 1,000 this fiscal year.

``(Fraud is) a tremendous problem,'' said Tony Bell, spokesman for Supervisor Michael D. Antonovich Michael Dennis Antonovich (born 1939 in Los Angeles, California) is a member of the Los Angeles County Board of Supervisors representing the Fifth District, which covers northern Los Angeles County, the Antelope, Santa Clarita, Pasadena, and parts of the San Fernando and San , who created the hotline in 1988.

``It's a problem that our office has targeted as a high priority. And we're working with the district attorney to increase the number of investigations.''

The acknowledgment acknowledgment, in law, formal declaration or admission by a person who executed an instrument (e.g., a will or a deed) that the instrument is his. The acknowledgment is made before a court, a notary public, or any other authorized person.  that county fraud is a growing problem follows a warning three years ago by the Citizen's Economy and Efficiency Commission about workers' compensation workers' compensation, payment by employers for some part of the cost of injuries, or in some cases of occupational diseases, received by employees in the course of their work.  scams.

Since then, officials have reduced county workers' compensation abuses from $324 million in 2003-04 to $263 million last fiscal year.

And some officials have begun to take more seriously the warnings of the grand jury, prosecutors and the commission about a ``culture of entitlement A culture of entitlement is a social construct where individuals are said to expect access to social security, with the connotation that these individuals do not deserve to receive such benefits or entitlements. .''

``I think at this point, very few people could deny that there is very much a culture of corruption "Culture of corruption" is a political slogan used by the United States Democratic Party to refer to a series of political scandals affecting the Republican Party during George W. Bush's second term as President of the United States.  in the county of Los Angeles, both from the public sector side, and certainly with the entitlement mentality on the recipient side,'' said Jon Coupal, president of the Howard Jarvis Taxpayers Association Howard Jarvis Taxpayers Association helped sponsor Proposition 13, the property tax-cutting initiative in California in 1978 which slashed property taxes by fifty-seven percent and initiated a national tax revolt. It was founded by California republican Howard Jarvis. .

``The citizenry cit·i·zen·ry  
n. pl. cit·i·zen·ries
Citizens considered as a group.


citizenry
Noun

citizens collectively

Noun 1.
 is very cynical about politics because they see this pervasive fraud, corruption and abuse and also see nothing being done about it.''

Size hurts county

Some county officials, however, say efforts to stem abuse and fraud are in place.

``We have systems in place that try to prevent it from happening,'' Assistant Chief Administrative Officer A chief administrative officer (CAO) is responsible for administrative management of private, public or governmental corporations. The CAO is one of the highest ranking members of an organization, managing daily operations and usually reporting directly to the chief executive  Sharon Harper said.

And some experts say that simply because of its size, Los Angeles County is a prime candidate for vast fraud.

``The very largest organizations and the very smallest organizations are the ones that get hit the most,'' said Sarah Carson, president of the Los Angeles chapter of the fraud examiners' association.

``The bigger organizations, where so much money is involved, are the prime candidates for those who want to milk the system.''

Although reluctant to make estimates now, County Auditor-Controller Tyler McCauley has previously indicated employee fraud, waste and abuse costs the county about $250 million annually.

And McCauley -- who said he's seen a dramatic increase in the number of people willing to participate in illegal activities -- concedes the county doesn't require enough income and asset proof from welfare recipients.

Child care probed

Department of Public Social Services social services
Noun, pl

welfare services provided by local authorities or a state agency for people with particular social needs

social services nplservicios mpl sociales 
 Director Bryce Yokomizo has disputed estimates by prosecutors and the grand jury on the extent of child care fraud, but recently he told the Board of Supervisors that fraud in the state-controlled portions of the program is a serious problem.

DPSS DPSS Diode-Pumped Solid-State (laser)
DPSS Department of Public Social Services
DPSS Distributed-Parallel Storage System
DPSS Datapath Synthesis System
DPSS Data Processing Subsystem
DPSS Digital Precision Strike Suite
 has 178 fraud investigators and supervisors who helped avert $59 million in welfare fraud last fiscal year, up from $45 million in 2000-01. More than 800 child-care fraud investigations are under way now.

Supervisor Don Knabe Donald R. Knabe (born October 15, 1943 in Illinois) is a member of the Los Angeles County Board of Supervisors, serving the Fourth District, a crescent shaped district that covers the coastline from Marina Del Rey southward to Long Beach, and southeastern Los Angeles County to  said the state estimates up to 7percent of all child-care cases include fraud, but two-thirds of the program is administered by the state, and DPSS can't investigate those cases.

``(The state has) no clear policies in place that meaningfully address program integrity or quality control, let alone a means of preventing criminal activity in child-care programs,'' Knabe said.

``The result is that a majority of child-care funding -- nearly $235 million given out locally ... last year -- is left wide open to fraud.''

Abusing time cards

Concerns about county employee fraud, waste and abuse escalated after investigators discovered employees at Martin Luther King-Drew Medical Center were engaged in widespread workers' compensation and time-card abuses.

County investigators found ``systemic deficiencies'' throughout county government, noting a growing number of employees are being fired and disciplined for time-card abuses and hundreds of investigations are under way.

The Board of Supervisors directed officials last year to revamp re·vamp  
tr.v. re·vamped, re·vamp·ing, re·vamps
1. To patch up or restore; renovate.

2. To revise or reconstruct (a manuscript, for example).

3. To vamp (a shoe) anew.

n.
 time- card protocols, but Chief Administrative Officer David Janssen said those changes cannot be made until a new human resources The fancy word for "people." The human resources department within an organization, years ago known as the "personnel department," manages the administrative aspects of the employees.  computer system is installed.

``The fiscal system has been totally redone re·done  
v.
Past participle of redo.
,'' Janssen said. ``But it will be another year or two before we have a new time-card system.''

The county's overtime costs have shot up from $296 million in 2003-04 to $423 million last fiscal year -- $113 million over budget.

``(Time-card abuse is) a more widespread problem,'' said Marion Romeis, chief of the Office of County Investigations. ``A substantial number of our referrals involve time abuses. It goes across the county.''

Time-card abuse investigations rose from 14 in 2000 to 49 last year.

Romeis attributed the increase to heightened employee awareness of possible problems and the fraud hotline, which makes it easier to anonymously report possible abuse.

But Romeis concedes she doesn't have enough investigators and only investigates the ``very egregious'' cases.

The Board of Supervisors recently funded two extra investigators for Romeis' office, bringing the total to 14. The investigators refer criminal cases to the District Attorney's Office and send other completed investigations to various departments for discipline.

Few disciplined

The District Attorney's Office has 273 Bureau of Investigation investigators, some of whom handle county cases.

Since 1999, the District Attorney's Office Public Integrity Division has filed felony felony (fĕl`ənē), any grave crime, in contrast to a misdemeanor, that is so declared in statute or was so considered in common law.  charges against 75 county employees, including 28 welfare workers.

``It's much more than has ever been done in the 156-year history of the Los Angeles County D.A.'s Office,'' District Attorney Steve Cooley Stephen Lawrence ("Steve") Cooley (born May 1, 1947 in Los Angeles, California) is a veteran prosecutor who was elected as Los Angeles County's 36th District Attorney on November 7, 2000. He was sworn in for his second term on December 6, 2004.  said.

Despite the large number of prosecutions, critics say only a small proportion of county employees ever are disciplined or charged.

While investigators substantiated 120 fraud hotline cases last year, only 38 -- or 32percent -- led to employees being fired, suspended, transferred or allowed to resign.

While some fault the county Civil Service Commission, Romeis said departments vary in their efforts at disciplining employees.

``Overall, over time, I'd say it's gotten better, but there is still a big discrepancy among departments,'' Romeis said.

Bell said Antonovich's office continues to look for ways to identify and prosecute cases and said the county set up a multidepartment Public Assistance Fraud Task Force that has cracked down on Section8 housing fraud in the Antelope Valley This article is about the Los Angeles County region. For the census-designated place in Wyoming, see Antelope Valley-Crestview, Wyoming.

The Antelope Valley
 in recent months.

``I think the level of fraud being deterred is up because of our efforts in the welfare fraud and public integrity divisions,'' Cooleysaid. ``But it doesn't mean we've won the war.''

troy.anderson(at)dailynews.com

(213) 974-8985

CAPTION(S):

2 boxes

Box:

(1) L.A. County fraud investigations

Source: Auditor Controller's Office

(2) Fraud hotline
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Publication:Daily News (Los Angeles, CA)
Date:Jan 7, 2007
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