When someone who receives Social Security is unable to handle their own money, the government can appoint a third party to do it for them. Typically it's a family member. If no one can be found to do it gratis, a non-profit organization can get the job in exchange for a monthly fee charged to the beneficiary.
For the second time in recent months, one of these organizations - called representative payees - has lost its contract with the Social Security Administration. Richfield-based Greenleaf Payment Services handled the benefits of 290 vulnerable recipients when it was terminated in July, and it's now the subject of an investigation by Social Security's Office of Inspector General, an agency spokeswoman said Thursday.
"It's inappropriate to discuss it further because there is an open investigation," said Carmen Moreno, a Social Security spokeswoman in Chicago.
When I interviewed her a few weeks ago, Moreno did not mention any similar investigation of the now-defunct J.T. Kitt Society, also of Minneapolis, and she said there was no question of any misuse of money.
At least two cases of Social Security benefit fraud have resulted in criminal convictions in the past year and a half.
Like J.T. Kitt, Greenleaf Payment Services is a non-profit organization permitted to charge Social Security recipients about $40 per month to collect their checks and pay their bills. I have called and emailed the head of Greenleaf Payment Services, Edward Leaf, and will update this post with any response I get. When I called Greenleaf on Thursday, I got this recorded message:
Today is Monday, September 8, 2014. As of today, Greenleaf has not received any Social Security funds for this month for any of our clients. We apologize for this and are sorry that we are unable to help you with any of your bills. If your payee has already changed, please check with your new payee. Otherwise you need to contact Social Security and ask them what they are going to do with your funds for this month and ongoing. Also, if you have any uncashed checks with Bremer Bank, the account has been closed, and Bremer has advised they are not going to honor any of the checks. They will return them marked, "Account closed." Thank you.
According to Greenleaf's most recent tax form, for 2012 (below), the company took in about $138,000 in revenue, and had about the same in expenses. But it has carried more than $200,000 in liabilities for the past three years, and attributes the current total of $232,000 to "credit cards, lines of credit, loans and payroll tax liabilities." The only paid employee, Leaf, earned a $65,000 salary.