Claims of Welfare Worker Fraud Date Back to ’81

A former San Diego County official warned Department of Social Services authorities in a 1981 memorandum that they were leaving themselves open to charges of a cover-up by allowing internal investigations of employee fraud.

In addition, Maury R. Pion, who was head of the county’s revenue and recovery department, said in a telephone interview Wednesday that his warning was prompted by allegations from some Department of Social Services fraud investigators, who complained that they were ordered by some supervisors to “back off” some cases of fraud by employees who handled welfare benefit cases.

“There were allegations (then) by staff in the investigative part of the DSS that they were being told in some instances to back off a case, or not to perform the investigation as diligently as they should,” said Pion, who is now retired.

Pion’s comments support more recent allegations by Department of Social Services fraud investigator David Sossaman, who charged that some DSS employees who defrauded the county escaped prosecution because of incompetent or corrupt welfare fraud investigators.

When told about the memo and Pion’s comments, Sossaman said:

“I’ve known (about the alleged cover-ups) all along. I got wind of it when I first arrived that over the years people have tried to come forward and disclose past cover-ups. Unfortunately, they were retaliated against or were otherwise pressured to keep quiet.”

Sossaman is one of several DSS employees, including investigators, who have testified before a county grand jury committee that is probing allegations of widespread corruption in the county’s welfare department. The grand jury probe began in November.

The allegations under investigation by the grand jury include charges by Sossaman that district attorney investigator Jonas Pumphrey participated in “various” cover-ups of welfare fraud. The district attorney’s investigators work with DSS investigators on probes of employee and recipient fraud.

Most of the allegations of fraud and incompetence under investigation by the grand jury occurred between 1980 and 1991.

Spokesmen for the district attorney and department of social services director Richard Jacobsen have consistently denied allegations that Pumphrey and other investigators covered up or were ordered to cover up fraud cases.

However, Pion said that allegations of cover-ups were being tossed around as far back as Feb. 9, 1981, when he wrote a two-page memo to then acting DSS assistant director Jacobsen.

“That’s what generated the memo; the allegations,” Pion said.

In the memo, which was made available to The Times, Pion recommended that Department of Social Services fraud investigators be transferred to the county Department of Revenue and Recovery.

“We feel that this transfer would eliminate the potential charge of conflict of interest insofar as investigators being placed in the position of including in their investigation eligibility workers (employees who open and close welfare cases) involved in fraud cases,” Pion said in the memo. “It is our understanding that this frequently happens. In essence, currently employees in one department are responsible for investigating other employees in that department, and we feel that this could give rise to charges of cover-up.”

In addition, Pion said in the memo that transferring the DSS investigators made good sense, because then the county would only have to conduct one investigation when investigating employee fraud and attempting to recover stolen funds. The Department of Revenue and Recovery conducts separate investigations once the DSS investigators find instances of welfare fraud.

“At the time I wrote the memo, I felt it was the thing to do, and I still feel it’s the thing to do,” Pion said in Wednesday’s telephone interview. “ . . . I don’t think one department should be investigating its own staff.”

He said he was not surprised that charges of cover-up have surfaced again, 11 years later.

“No, I’m not surprised, because the potential was always there. That’s why I tried to do something about it back then.”

Pion said his recommendation was never acted upon.

On Wednesday, Jacobsen declined to comment on Pion’s memo until he had a chance to review it and look through the department’s files to see how he responded to it.

However, he repeated his department’s earlier denials about rampant fraud in the department and investigations that have been covered up.

“To charge that there is rampant fraud in the department; I have found no evidence that’s the case nor have I seen any evidence to this point,” Jacobsen said. “ . . . (But) I am very concerned about fraud of any kind in this department and will not tolerate that. . . . People are saying this department is willing to condone fraud, and I’m telling you we’re not willing to condone it.”