39 Accused in Major Welfare Fraud Ring : Crime: D.A. blasts county agency for sending relief checks issued in as many as 96 different names to a single address. A psychologist is among those charged.

Thirty-nine people, including a Long Beach psychologist, were charged Thursday with operating or participating in a major welfare ring that Dist. Atty. Ira Reiner said defrauded the county welfare system out of hundreds of thousands of dollars.

At a morning news conference, Reiner blasted the county Department of Public Social Services for sending welfare checks issued in as many as 96 different names to a single Los Angeles address, despite a policy designed to prevent such occurrences.

The home was owned by Myron G. Larkin, who authorities say worked with clinical psychologist George D. Demos in a scam to persuade government workers that an array of “clients” were entitled to benefits for the mentally disabled or indigent.

On a surveillance videotape that Reiner showed to reporters Thursday, a postal carrier is seen stuffing what investigators believe were as many as 55 government checks into the mailbox of the house, located west of Koreatown.

The tape also showed people arriving in expensive cars, then entering the house. There, Reiner said, they would sign over the checks to Larkin, who reimbursed them with cash and pocketed a percentage.

“What’s remarkable about this is just how blatant it is,” Reiner said. “In the video, people casually arrive each month, month after month, in this neighborhood. It obviously had to be apparent to anyone what was going on.”

A social services spokeswoman responded that her agency had been duped into believing that the single-family home was a rooming house. She noted, however, that her agency alerted Reiner to the case in the first place.

At the news conference, Reiner said conspiracy and fraud charges involving the welfare checks had been filed against Larkin, Demos and 37 others who were either Larkin associates or who pretended to be in need of government assistance.

Larkin was being held in lieu of $250,000 bail, Demos in lieu of $100,000 bail and Larkin associate Thomas Marshall in lieu of $50,000 bail. Twenty-two other suspects were arraigned earlier, while 14 were still being sought.

Officials said Larkin charged fees of up to $1,500 for providing false identity papers to people so they could illegally obtain county welfare checks of about $312 each month. Demos’ role, according to Reiner, was to certify that recipients were mentally disabled and therefore eligible for aid. He allegedly charged from $15 to $25 for each certification.

Larkin, said Reiner, would sit in on clients’ interviews when they applied for assistance.

“He would tell them not to shower for a couple of days, be dirty and smelly and don’t look at the DPSS worker, just rock back and forth in the chair and he would do all the talking,” Reiner said. “The intake worker would stamp the application and the cash would start rolling in.”

At his news conference, Reiner also lashed out at federal officials, who he said have failed to look into evidence of widespread Social Security fraud uncovered during the welfare fraud investigation.

Larkin, according to Reiner, used similar tactics to illegally obtain federal Supplemental Security Income (SSI) benefits for his clients. Such benefits, typically amounting to about $660 per month, are designed for the permanently disabled.

“The Social Security Administration has refused consistently to investigate or audit any of these claims for reasons of privacy, and that’s preposterous,” Reiner said. “The only question of privacy is the privacy of an administration not willing to uncover what may be pervasive fraud.”

Leslie Walker, a Social Security Administration spokeswoman in San Francisco, confirmed that officials were alerted to the possible SSI fraud in August, 1989, soon after Reiner’s investigation began.

The agency determined that Larkin was receiving checks on behalf of 40 SSI recipients, while 31 others were receiving SSI checks at property owned by Larkin, Walker said.

“We instructed all of our offices in Los Angeles if Myron Larkin . . . came to the office and requested to do any business that the information was to be turned over to the inspector general’s office” of the U.S. Department of Health and Human Services, Walker said.

She could not say whether any action had been taken, and referred further questions to Elliot Kramer, the region’s inspector general. He could not be reached for comment.