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GAO Finds $116M in Potential Fraud In Low-Income Energy Program

Press Release

Location: Washington, DC

Three top Republican lawmakers today released a Government Accountability Office report that found nine percent of households in seven states could be improperly receiving Low Income Heating Assistance Program funds at a cost of $116 million a year.

"It looks like a ton of LIHEAP money was disbursed to con artists who applied under the names of convicts and the dead. Even some people living in million-dollar houses got their utility bills paid by the taxpayer," said U.S. Rep. Joe Barton, R-Texas, ranking member of the House Energy and Commerce Committee. "LIHEAP is supposed to be for poor people, not for cheats who pose as something or someone they're not and get their paperwork rubber-stamped by gullible government officials. It's Secretary Sebelius' responsibility to run this program right, and she needs to start doing it by stopping this fraud."

LIHEAP, which is administered through the Department of Health and Human Services, costs $5 billion a year and serves 8.3 million low-income households by providing financial assistance to low-income households for heating and cooling costs.

In its investigation, GAO found that more than 11,000 dead people and hundreds of prisoners were used as applicants or household members for LIHEAP benefits. More than 1,000 federal employees whose federal salary exceeded maximum income threshold received benefits and in several cases, people living in million-dollar houses received benefits.

The report was requested by Barton, and U.S. Reps. Michael Burgess, R-Texas, and U.S. Rep. Greg Walden, R-Ore., ranking member and former ranking member of the Oversight and Investigations Subcommittee, respectively.

"This program is intended to benefit poor Americans who need assistance paying their energy bills, but for the fact that it's abused and administered inefficiently," Burgess said. "LIHEAP seems to be another example of waste, fraud and abuse running rampant and unchecked in government programs, and must be reined in. Low-income Texans have a hard time accessing their fair share of LIHEAP funding, so to learn that nine percent of LIHEAP funds are wasted is astonishing."

"This is yet another poster child of waste, fraud, and abuse," Walden said. "Taxpayer dollars for heating assistance were shelled out to the well-off and crooks posing as the deceased. Taxpayers may have been cheated out of more than $100 million because HHS couldn't figure out that the deceased don't need energy assistance? By the way, this is the same outfit that's going to run the $1 trillion government takeover of healthcare. The American people deserve far better protection of their tax dollars."

Below are examples of fraudulent or improper activity in LIHEAP that GAO uncovered:

"Illinois provided $540 in energy assistance to an applicant who fraudulently used the identities of two deceased family members to qualify for LIHEAP.

"Illinois provided $840 in energy assistance to a U.S. Postal Service employee who fraudulently reported zero income to qualify for LIHEAP. Despite earning about $80,000 per year, the employee stated that she saw "long lines' of individuals applying for LIHEAP benefits and wanted the "free money.'

"New Jersey provided $3,200 in energy assistance to a nursing home facility whose director claimed to represent eight patients residing in the facility. These patients had their nursing home care paid by Medicaid.

"Posing as low-income residents, landlords and an energy company, GAO used bogus addresses and fabricated energy bills, pay stubs and other documents to apply for energy assistance. All fraudulent claims were processed and the energy assistance payments were issued to our bogus landlords and company."

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