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Senate Committee Holds Hearings on Third-Party Theft, Misuse of Social Security Funds

Aired May 2, 2000 - 2:07 p.m. ET

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.

NATALIE ALLEN, CNN ANCHOR: Social Security fraud is on the Congressional calendar today. Specifically, a Senate committee is holding hearings on theft and misuse of Social Security funds by third parties entrusted to handle the money for recipients.

CNN's Kate Snow is covering the story for us. She joins us from Capitol Hill -- Kate.

KATE SNOW, CNN CORRESPONDENT: Hi, Natalie.

The Senate special committee on aging held hearings this morning about that particular kind of Social Security fraud and abuse where a third party is stealing from the Social Security recipients. And they heard from a couple of Americans who had been experienced -- who had experienced that kind of fraud directly themselves.

First they heard from Betty Byrd, who is 70 years old. She's from West Virginia. She came here to Capitol Hill to tell her story. She says that the man who was supposed to be caring for her money and was supposed to pay her utilities and her bills was actually stealing her life savings.

(BEGIN VIDEO CLIP)

BETTY BYRD, SOCIAL SECURITY RECIPIENT: I was left almost homeless without medical care and in serious financial trouble. If it wasn't for the generous people of our community, I wouldn't be alive today.

(END VIDEO CLIP)

SNOW: Now, the payee involved there did plead guilty to those charges of embezzlement. He's going to be sentenced next month. Meantime, the Senate committee also hearing from another payee person who does that sort of work who, herself, was convicted of embezzlement, and she's serving a jail term now. She explained how her former boss would steal thousands of dollars from Social Security recipients.

(BEGIN VIDEO CLIP)

THERESA KING, CONVICTED OF SOCIAL SECURITY FRAUD: I saw checks, 7,000, 9,000, 18,000. These people didn't know this money came in. If they didn't know it was coming, he wouldn't tell them. If they asked about a back payment or an award, he would simply tell them that money was spent to pay back welfare or he would lie about the amount. If they received a $10,000 check, he would tell them their check was $1,700. He just bald-faced lied.

(END VIDEO CLIP)

SNOW: Now, the Social Security administration says that they've looked into this, that they have filed more than 1,300 cases, investigating cases of potential fraud. They have convicted some 300 people since 1998 and found $7.5 million in lost money since 1998 -- the fiscal year '98. They agree that more needs to be done on this front and they have suggested legislative initiatives. And, indeed, Senator John Breaux and Senator Chuck Grassley now, today, proposing legislation that would try to get rid of this kind of Social Security fraud -- Natalie.

ALLEN: Kate Snow on Capitol Hill.

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