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June 5, 1996

Department demands return of $696,000 in fraud cases

TUMWATER - Six cases in which individuals were collecting benefits in the name of dead people have resulted in the Department of Labor & Industries assessing $696,000 in fraud assessments and penalties.

The department uncovered the fraudulent payments during the last several months by cross-matching Social Security information about dead individuals with records about claimants receiving workers' compensation pensions. Department investigations revealed six cases in which persons falsified documents to collect benefit payments in the name of claimants who had died.

The amount requested in each case includes a 50-percent penalty as allowed by law. The cases include:

  • A $207,000 order against Peggy Maxwell of Everett. An investigation showed she concealed her mother's death and fraudulently collected workers' compensation benefits for 14 years.
  • A $174,000 order against Glenn Eugene Grunden of Ellensburg. An investigation showed he fraudulently collected benefits in his mother's name after she died in 1988.
  • A $140,000 order against Jacqueline Aust of Centralia. An investigation showed she fraudulently collected benefits on her aunt's pension from June 1987 to October 1995 after the aunt died in 1987.
  • A $90,000 order against Charles A. Wilson Jr. of Seattle. An investigation showed he fraudulently collected benefits from October 1991 until August 1995 on his father's pension.
  • A $55,000 order against Isaac Smith of Lacey. An investigation showed he fraudulently collected benefits for two years beginning in February 1993 after a man he had befriended and who was a legitimate claimant died.
  • A $30,000 order against Cheryl Matheny of Sequim. An investigation showed she fraudulently collected benefits from January 1994 until July 1995 on her father in-law's pension.

These latest cases are the result of a department initiative and a recommendation by the state auditor. The department expects additional cases in the future.

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