8 Arrested in Probe of Welfare Fraud

The official version paints a picture of suburban prosperity:

Over the last 10 years, Sammie Miller and Debby Dixon of Covina have owned three homes, five cars, a boat and a beauty salon.

Hakop Bebekian and Goar Chivtchyan have owned not only their home in Pasadena but also the four-plex behind it.

And bakery owners Anatoliy and Ella Rekechenetskiy have enjoyed their own hint of the good life--$135,000 in cash socked away in their Hollywood home.

Such trappings of prosperity, authorities alleged Friday, allowed these and other Los Angeles County residents to live like the privileged while collecting government assistance designed for the poor.

Eight people, accused of defrauding the county of almost $500,000, were arrested after what the district attorney’s office called an unprecedented local inquiry into major welfare fraud.

Although none of those arrested could be reached for comment, an attorney for Miller and Dixon flatly denied any wrongdoing on their part. The charges against his clients were already investigated and found to be baseless, said attorney William McKinney.

But the six-month investigation, according to its coordinator, Deputy Dist. Atty. Stephen Cooley, has not only uncovered more than $3 million in alleged losses but also confirmed a troubling suspicion:

Major welfare fraud in the county is both widespread and far costlier than officials have ever before established.

Since January, when 12 district attorney’s investigators were assigned solely to pursue large scale welfare fraud, Cooley’s office has identified at least 25 cases involving couples or individuals in which the losses have allegedly approached or exceeded $100,000 each.

As Cooley said in an April letter to state officials: “We have concluded that major welfare fraud in Los Angeles County is rampant and endemic.”

Investigators located land holdings, big bank accounts, expensive jewelry and other signs of wealth that should not belong to those on welfare, search warrants show.

Consider Miller and Dixon, authorities said.

For almost a decade, according to court documents, Miller, 36, and Dixon, 34, have been collecting regular monthly welfare checks from the county’s Department of Public Social Services. And like the other 1.9 million who receive public aid in the county, the couple had to sign statements attesting to their need for assistance and lack of other resources.

But unlike the situation with most of the other recipients, search warrants suggest that Dixon and her husband, Miller, were living large.

While still collecting food stamps and other benefits, including Section 8 housing assistance, the warrants say, Dixon and her husband owned the David Ashley Salon (named after their two children), three homes, a $6,500 Rolex watch and numerous vehicles, including a 1993 Mercedes-Benz, a 1993 Chevrolet and a 1991 Acura--all registered under Miller’s name.

Their attorney, McKinney, said that the couple’s assets have been acquired only in recent years and that he understands they have received no welfare since 1992 or 1993.

But Deputy Dist. Atty. Steve Weiss said evidence shows that the couple continued to get government aid well into last year.

And Friday, police arrested the couple along with six other people at four locations. All remain in custody.

“These cases represent the biggest of a big problem,” said Cooley, who oversees the welfare fraud division of the district attorney’s office, at a press conference to announce the arrests.

Added Lt. Thomas Filmore of the office’s Bureau of Investigation: “All [those arrested] had been receiving welfare for several years. That’s why the losses are so high.”

In addition to Miller and Dixon, who were accused of fraudulently receiving $102,345 in food stamps and Aid to Families With Dependent Children, authorities announced the following allegations:

* Anatoliy Rekechenetskiy, 42, and his wife, Ella, 35, were accused of collecting $101,256 from AFDC, food stamps and Medi-Cal over the last five years, although they purchased a bakery last year for $50,000 and have run it. In addition to locating $135,000 in cash during a search of the couple’s home several months ago, authorities said they recovered $11,000 in cash when the couple were arrested Friday.

* Chivtchyan, 37, was arrested--her husband, Bebekian, 39, remains at large--in connection with allegations that the couple fraudulently took $86,845 in AFDC, food stamps and Medi-Cal over six years. Filmore said investigators know Bebekian’s whereabouts in Arizona and expect to arrest him in the next several days.

* Ovanes Danelian, 48, and his wife, Narenze, 46, arrested at their home in Glendale, are accused of fraudulently collecting $130,945 in AFDC, food stamps and Medi-Cal over the last eight years while owning, managing, operating or working at hair salons in Glendale, including their current shop--Talin Salon.

* Christina Maria Williams, 23, of Carson allegedly cost the county $60,349 in welfare fraud by accepting AFDC, food stamps and Medi-Cal from 1993 to 1996. During at least two of those years, authorities said, she was living, working and attending school in Kansas. More recently, they added, she was working for the San Diego Shipyard.

If convicted, the defendants all face a possible five to 11 years in prison and would have to make restitution, Cooley said.

“These are people who don’t need welfare. They have businesses. They have assets to take care of themselves and their families,” he said. “But they are still cheating the system.”

Added Deputy Dist. Atty. Jim Baker: “The typical welfare [fraud] involves someone who cheats to earn a little bit extra money to make ends meet. But these [people] . . . are those who did not need the extra money,, and the extra money is often used for luxuries.”

Some of the worst cases of welfare fraud have been going on for years, Cooley said, and can remain undetected for two reasons:

First, he said, most of those brazen enough to attempt significant fraud are sophisticated enough to know that their best chance of continuing to collect hinges on dealing only in cash and hiding assets in the names of relatives and friends.

And, Cooley said, investigators with the county social services department, which oversees the welfare system have historically been caseworkers promoted to the role of sleuth, with little or none of the law enforcement training given to the district attorney’s investigators.

The combination of cunning culprits and inexperienced investigators, Cooley said, has made welfare scams often easy to accomplish.

To make fraud more difficult, he said, the district attorney’s office decided to launch its task force in January. Eventually Cooley hopes convictions will persuade state officials to fund more investigators. Recovering funds and imposing fines and prison sentences will help curb the problem, he added.

“In most welfare fraud cases . . . to put some of the mothers and others convicted of fraud in prison will do nothing but destroy what little family they have,” Cooley said. “However, with these people who have these businesses, homes, cash . . . to have them just do some restitution and probation is just not right. They deserve some punishment . . . and the goal is that if they are punished, others will be deterred.”