• Press Release: Manhattan U.S. Attorney Announces Arrest of Man for Defrauding New York State Pension Fund of over $130,000

    Author : White Collar Firm May 27, 2016

    Press Release: Manhattan U.S. Attorney Announces Arrest of Man for Defrauding New York State Pension Fund of over $130,000

    https://www.justice.gov/usao-sdny/pr/manhattan-us-attorney-announces-arrest-joseph-grossmann-defrauding-new-york-state

    Who: Joseph Grossman, the defendant.

    Charged by the U.S. Attorney for the Southern District of New York.

    What: Grossman has been charged with one count of Conspiracy to Commit Wire Fraud, which carries a maximum possible prison sentence of 20 years, for fraudulently collecting a deceased former New York State Employee’s pension payments (the “Pensioner”).

    Grossman is accused of stealing over $130,000 from the New York State public retirement systems in this scheme, which is administered by the New York State Comptroller (“Pension Fund”).

    Where: New York. Grossman was arrested in South Carolina.

    When: The crimes allegedly happened between about August 2010 until August 2015. Grossman was arrested on May 12, 2016.

    Why: The U.S. Attorney charged Grossman with collecting a deceased New York State employee’s pension payments. He’s charged with posing this employee as if she were alive by deceiving state officials and creating false documents.

    Grossman became the personal representative of this Pensioner’s estate after her death by fraudulently listing himself as her brother and submitting false paperwork. Grossman sent correspondence to the Pension Fund that did not reveal that the Pensioner was deceased, and ended up collecting 61 of her pension payments totaling over $130,000.

    How:

    Upon retiring, the Pensioner submitted a Retirement Form where she elected to receive the maximum lifetime retirement allowance, with all payments stopped at her death. The form specifically mentioned that she would not have a beneficiary. The Pensioner began receiving pension payments in about April 1999.

    The Pensioner’s date of death is listed as August 5, 2010 on her death certificate.

    The Pension Fund learned through the United States Social Security Death Index that the Pensioner passed away in the fall of 2010.

    The Pension Fund sent letters to the Pensioner’s last two listed addresses to confirm she was still alive so that they could continue sending her pension payments. They did not receive a response from the first address they mailed to. However, they received a phone call soon after they sent a letter to the second address from a woman who stated she was the Pensioner, and that she would be sending them documents showing that her brother had been granted power of attorney. Grossman was linked to this address.

    The Pension Fund received a written response that included:

    • A copy of an Appointment Application naming Grossman as the “personal representative” of the Pensioner’s estate,

    • A completed direct deposit form requesting future payments be electronically deposited to a specific account (“account”), and

    • The response appeared to be signed by both Grossman and the Pensioner.


    The death certificate on file revealed that the Pensioner did in fact pass away before Grossman submitted this response. Authorities cross-referenced the Appointment Application Grossman submitted to the Application that was on file with the Probate Court Grossman originally went to, and learned that the copy Grossman had provided omitted the portions containing anything concerning the death of the Pensioner. They also learned that Grossman signed this application and listed himself as the Pensioner’s brother. Grossman was not the Pensioner’s brother. Investigation of the account Grossman provided in his response revealed that Grossman opened this account, and that Grossman added the Pensioner to this account as an authorized user approximately six weeks after her death. Numerous payments were deposited into this account, over 50. The rest were sent in the mail. All the payments Grossman received totaled to over $130,000. Employees at the particular bank branch Grossman usually went to for this account recognized Grossman and remembered that he would usually withdraw the pension payments shortly after they were deposited. According to law enforcement, surveillance photographs at this branch showed a man that looked like Grossman at the same times as the withdrawals on about four separate occasions.

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