DiNapoli: Georgia woman allegedly stole over $450,000 in NYS pension and Social Security payments

State Comptroller Thomas P. DiNapoli, US Attorney for the Northern District of Georgia Ryan K. Buchanan and Social Security Inspector General Gail S. Ennis announced today the arrest of Georgia resident Sandra Smith for alleged theft of over $450,000 known in New York State Pension and Social Security payments to her late mother-in-law for a period of 16 years.

“The defendant callously took advantage of her mother-in-law’s death to profit at the expense of the New York Pension System and the Social Security Administration.” DiNapoli called. “She has now been brought to justice and we will demand full redress. I thank US Attorney Buchanan and the Social Security Administration Office of the Inspector General for their partnership on this matter.”

“Smith allegedly stole money that taxpayers and government employees paid into both pension schemes.” Buchanan called. “Money she wasn’t entitled to. Through this combined effort, another individual who believed they could trick the system has been caught and faces criminal prosecution.”

“For nearly 15 years, the deaths of the beneficiaries were allegedly concealed by Ms. Smith so that she could illegally receive Social Security benefits, which is a federal crime. These allegations illustrate that my office will continue to prosecute those who defraud the Social Security Administration.” Ennis called. “Thank you to the New York Office of the State Comptroller for investigating with us. I also thank the U.S. Attorney’s Office and Assistant U.S. Special Counsel Diane Schulman for prosecuting this case.”

Sandra Smith’s mother-in-law, Minnie Smith, was a longtime Brooklyn resident who worked for the State Insurance Fund from 1985 until her retirement in 2005. She then moved to Georgia to be close to family, but died on September 14, 2006.

Her family did not notify the New York State and Local Retirement System (NYSLRS) or the SSA of her death, and the retirement system received a change of address form purportedly signed and dated by “Minnie Smith.” At the time of Minnie Smith’s death in September 2006, Sandra Smith was her caretaker and looked after her finances. As her caretaker, she had access to Minnie Smith’s bank account. After Minnie Smith died, Sandra Smith didn’t close the bank account. Instead, she left Minnie Smith’s bank account open and NYSLRS and SSA continued to deposit funds into the account through early 2021. Smith knew exactly when those benefits would be deposited each month, and each month she reportedly withdrew the money from the account almost as quickly as it was deposited.

When her death was discovered, payments were halted and the Comptroller’s Investigations Department coordinated with the SSA-OIG, which conducted its own investigation into the fraud.

From September 2006 to April 2021, Minnie Smith’s bank account received a total of $264,700 in pension system payments and $194,351 in Social Security payments.

Sandra Smith accessed the pension and social security funds through online bank transfers from Minnie Smith’s account. She transferred $245,192.72 of the ill-gotten funds to her personal account, then withdrew cash or transferred the funds to other bank accounts.

Smith admitted to investigators that she stole the money. She faces 20 counts of wire fraud and 10 counts of stealing state funds.

Smith, 49, was arraigned before US Judge Justin S. Anand.

The charges brought in this case are merely charges and the accused is presumed innocent until proven guilty in court.

Since taking office in 2007, DiNapoli has been committed to fighting public corruption and encouraging the public to help fight fraud and abuse. New Yorkers can report allegations of fraud involving taxpayers’ money by calling the toll-free Fraud Hotline at 1-888-672-4555, filing a complaint online at https://www.osc.state.ny.us/investigations, or by Mail to: Office of the State Comptroller, Division of Investigations, 8th Floor, 110 State St., Albany, NY 12236.