WASHINGTON, DC – U.S. Senator Gary Peters (D-MI), Ranking Member of the Senate Homeland Security and Governmental Affairs Committee, applauded Senate passage of his bipartisan bill to crack down on fraud and misuse of retirement benefits for federal workers. The Representative Payee Fraud Prevention Act makes it a federal crime to misuse retirees’ funds, punishable by fines or imprisonment, to protect retirees from deceitful caretakers. The bill, which Peters introduced with U.S. Senators James Lankford (R-OK) and Kyrsten Sinema (D-AZ), would provide the same protections to retired federal employees that Social Security and Veterans beneficiaries currently receive.
“Michiganders work hard to earn a living. At the end of a long career, they deserve the opportunity to retire with dignity and financial security,” said Senator Peters. “Unfortunately, retirees in Michigan and across the country are being taken advantage of by dishonest caretakers who are supposed to act on a retiree’s behalf but instead steal those hard-earned benefits. I’m proud that the Senate has unanimously approved our bipartisan bill to protect vulnerable retirees and crack down on fraud and abuse that affect hardworking Americans.”
“I’m grateful the Senate agreed with our bill to help safeguard federal employee retirement funds from embezzlement,” said Senator Lankford. “Our bill closes a loophole in the law that allows bad actors to get off easy if they embezzle funds from federal retirees. Under the new requirements, it is a felony if a federal employee’s retirement funds issued by the Office of Personnel Management are misused by a representative payee, which is similar to the punishment for misuse if the Social Security Administration or Department of Veterans Affairs issued the payments. This is a simple, commonsense solution.”
The Office of Personnel Management (OPM) Inspector General has reported an increase in cases of fraud by people who help manage retirees’ payments – known as representative payees – such as family members or appointed representatives. Instead of properly managing benefit payments for retirees, some representative payees have been caught stealing funds for their own personal use. In many of the cases, the defrauded individuals were elderly or of diminished mental capacity.
The Representative Payee Fraud Prevention Act would protect vulnerable retirees and crack down on fraud and abuse by bad actors by giving US Attorneys the statutory authority to prosecute representatives that misuse funds on behalf of a retiree who has benefits from the Federal Employees Retirement System (FERS) or the Civil Service Retirement System (CSRS). This bill classifies the crime of misusing federal retirement funds as a felony punishable by up to five years in prison, which should help deter deceitful caretaker behavior and provide the same protections that Social Security and Veterans Affairs payees currently receive.