These 10 worst cases of welfare fraud tell stories of scammers who gave false information to get welfare money they weren’t eligible. Millions of poor individuals and families rely on welfare to afford their basic living expenses and meet their basic needs.
Welfare is any government assistance program that uses taxpayers’ funds to give money to citizens suffering from financial stress. In 2012, 3.3 million households in the United States and Puerto Rico received welfare in the last year.
Unfortunately, people in dire straits aren’t the only ones benefiting from public aid. Scammers commit welfare fraud by giving false information and obtaining money illegally. The U.S. Department of Labor reports that 1.9 percent of welfare payments can be attributed to fraud. Abuses are typically discovered early, but the following are the 10 Worst Cases of Welfare Fraud where criminals reaped big bucks.
1. Linda Taylor
Nicknamed the “Welfare Queen” by the Chicago Tribune, Linda Taylor swindled over $150,000 each year in tax-free income from the government during the 1970s. The Illinois native used 80 different names and 30 fake home addresses to collect food stamps. She also claimed the Social Security and veterans’ benefits for four deceased husbands who never existed. Linda Taylor became a notorious villain in Ronald Reagan’s presidency. Especially given she drove a shining Cadillac, owned four South Side homes, and frequently vacationed in Hawaii. In 1977, the 47-year-old thief stood trial and was sentenced to two to six years.
2. Wael Ghosheh
Wael Ghosheh, a 46-year-old eatery owner from Burbank, Illinois, stole nearly $1 million in government welfare funds. The scammer fraudulently used 3,000 Illinois LINK cards to buy immense amounts of energy drinks and candy. He then resold the merchandise to reap big profits. Ghosheh’s large-volume purchasing activity dated back over two years.
One of his family members had a valid LINK card that was never used. Karma caught up to Wael Ghosheh in 2015 when he was charged with five felonies, including identity theft. Yet, he was released from Cook County Jail on just $50,000 bail.
3. Dorothy Woods
One of the longest criminal records for welfare fraud is held by Dorothy Mae Woods. In 1983, the enterprising California crook was convicted for bilking $377,000 in public aid. For a decade, Woods posed as 12 poverty-stricken women and claimed 38 nonexistent children. Phony birth certificates helped her collect payments while living in a Pasadena mansion and driving a Rolls-Royce.
Not learning her lesson, Dorothy Mae Woods committed fraud again in 1987. This time she collected aid for a 14-year-old son who didn’t live with her. In 1997, Woods was arrested a third time for filing 135 bogus tax returns for $305,000.
4. Barbara Williams
Barbara Williams, a 33-year-old woman from Los Angeles County, showed another horrific example of welfare fraud. From 1971 to 1978, Williams collected approximately $250,000 in illegal government assistance payments. She used 10 different aliases to open 10 separate welfare cases under the TANF program.
Barbara Williams printed fake birth certificates to claim over 70 children total. She also collected around $50,000 in unwarranted food stamps. Her fraudulent funding helped her afford a luxury Ladera Heights home and four-unit apartment building. Williams even arrived at the courthouse driving a sporty silver Cadillac. In 1978, her four-day trial resulted in an eight-year prison sentence.
5. Donte and Lakisha Muhammad
The largest welfare fraud case for the Oregon Department of Human Services was perpetrated by the husband-and-wife team, Donte and Lakisha Muhammad. Starting in 2001, Lakisha received benefits for disabilities that left her wheelchair-bound. The video was later discovered of her walking into Costco and lifting a five-gallon oil can unassisted.
Donte was paid by Oregon to serve as his wife’s full-time caregiver. However, he also worked as an event planner and earned $70,000 a year. The Muhammads were caught using unjustified state payments to buy a gated Las Vegas home worth $330,000. In 2013, Lakisha and Donte earned five-year and three-year sentences respectively.
6. Andrea and Colin Chisholm III
Colin Chisholm III, a self-proclaimed “Scottish heir,” and his wife Andrea schemed to collect more than $167,000 in welfare payments from 2005 to 2012. The Chisholms lived near Lake Minnetonka when they began falsifying documents for public aid. Investigators eventually found the wealthy couple hid over $3 million in bank accounts.
On taxpayers’ dime, Andrea and Colin moved to Florida and bought a $1.2-million yacht. While collecting welfare from both states, the scheming duo set sail from Fort Lauderdale. The Chisholms were eventually discovered and deported from the Bahamas. In 2015, Andrea was sentenced to 12 months and Colin was slapped for 21 months.
7. Deborah Chisom
Few Pennsylvania welfare fraud causes can hold a candle to Deborah Chisom’s decade-long scam. From 1989 to 1999, Chisom illegally earned over $140,000 in welfare and food stamps. She claimed to be caring for her six children, who were actually living in Cleveland with her sister.
Living alone, Deborah Chisom used the stolen taxpayer’s support to afford her drug addiction. The 41-year-old mother’s swindle was uncovered by the state inspector after finding the children’s aunt also collected welfare in Ohio. By 2000, Chisom pleads guilty to welfare fraud and theft by deception. She faced a maximum 14-year prison sentence and $500,000 fine.
8. Fatima and Wasfi Shalhout
Fatima and Wasfi Shalhout, a married couple from Dearborn, Michigan, committed egregious welfare fraud using their shop Ann’s Market. From 2005 to 2008, the conniving pair defrauded the Food Stamp Benefits Program for nearly $1.2 million. The Shalhouts gave customers 50 percent of their benefits in cash and pocketed the rest.
For example, when beneficiaries wanted $30 in cash, they’d charge the food stamp cards $60 for phony food. Investigators found the Shalhouts used stolen funds to buy a vacation home in Israel and lease three luxury vehicles. In 2009, Wasafi was sentenced to three years and his wife served 30 months.
9. James William Smith
Beginning in 2005, James William Smith became renowned in Minnesota as a leading voice for raising Alzheimer’s awareness. In his mid-40s, Smith had been diagnosed with early-onset dementia and was struggling to care for two twin daughters. A local TV show declared him a “Health Care Hero,” but this hero had a secret.
James William Smith faked the medical condition by altering his speech and purposely failing memory tests. He quit his job and schemed over $6,700 each month in Social Security disability and welfare. Smith’s deceit helped him afford an 80-acre hobby farm. In 2013, he plead guilty to stealing over $144,000 in government benefits.
10. Arlene Otis
Arlene Otis, a 30-year-old graduate student studying criminal justice at the University of Illinois, shockingly committed another welfare fraud scheme. From 1972 to 1979, Otis cheated the system by using at least six aliases to earn public assistance.
One name, Marselle Barnes, was used for over $32,000. Investigators concluded that she illegally received $150,839 in welfare checks. In 1979, Arlene Otis was sentenced to four years in prison on six counts of theft and two counts of perjury. Liens were placed on her several properties, and the Chicago woman’s four children became wards of the state.
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