Dead city workers collect checks from beyond the grave

City Comptroller John Liu and Dept. of Investigations Commissioner Rose Gill Hearn announce the pension fraud investigation Monday.

Even death didn't keep 14 city retirees from continuing to "collect" their pension checks through suspected fraud, City Controller John Liu reported Monday.

The cashers of the dead-retirees' checks made off with a total of $459,970, Liu said at a press conference with Department of Investigation Commissioner Rose Gill Hearn.

She'll now determine if criminal prosecution is warranted.

In the most-glaring of the 14 cases, someone cashed 38 pension check worth $139,818 after that pensioner died in 2007.

The scammer used the retirees' driver's license to cash the checks, and when the license expired this year, the undisclosed suspect merely had it renewed and continued "to cash the dead pensioner's checks," according to Liu.

Another 171 fishy cases, involving $2 million in taxpayer funds, are still undergoing scrutiny by Liu's audit staff.

Those cases involved the cashing of pension checks for shorter time periods, and could have been due to mistakes or a bureaucratic lag in death notices shutting off electronic bank transfers of pension checks.

Liu said the scams were uncovered by "applying cutting-edge use of data analysis" to match computer records of city pensioners from 2007-2009 with Social Security death records. He said the review was a "quick look," rather than a full blown audit.

The city paid out $6.6 billion in pension benefits to its retirees in the last fiscal year - and that's expected to grow to $7.8 billion in the next fiscal year that starts July 1, 2011.

The city has hundreds of thousands of retirees, and the number of cases uncovered by Liu doesn't appear to signal a large scale problem of death workers still collecting pension checks.

But Liu stressed that whether it's 14 or 14,000 cases his office and city are out to "aggressively root out waste and fraud" of city funds.

Such scams "undermine" the security of funding for retirees, "fuels cynicism and distrust about pension plans" and "unfairly stigmatizes city workers and retirees who really have put in many years of service," Liu commented.

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