Social Security Disability Fraud.

TRENTON - Attorney General David Samson today announced that a Jamesburg man was charged in by the Division of Criminal Justice's Office of Insurance Fraud Prosecutor and indicted by a State Grand Jury with theft and falsifying records. The charges are related to allegations that he fraudulently received more than $49,000 in Social Security disability benefits.

According to First Assistant Attorney General and Director of the Division of Criminal Justice Peter C. Harvey, Gerard M. Zaccardi, 50, of Stoneyhill Road, was charged with one count of third degree theft by deception and one count of fourth degree unsworn falsification to authorities.

According to the indictment, between September 1997 and June 2001, Zaccardi gave a false impression to the Social Security Administration that he was entitled to receive disability benefits, when in fact, he was not entitled to the benefits. The indictment also alleges that Zaccardi submitted a "Social Security Administration Report of Continuing Disability" to the Social Security Administration containing a false statement concerning his ability to return to work.

At his trial, the State intends to prove that Zaccardi misrepresented the extent of his disability to the Social Security Administration (SSA) resulting in the SSA overpaying $49,287 in disability benefits to him and his dependants. Zaccardi applied for and received disability benefits for a work place injury. He was required to notify the SSA when his physical condition improved and he was able to return to work, at which time his disability benefits would be terminated. The State intends to prove that Zaccardi did in fact return to work at an automobile repair shop but continued to submit review forms to the SSA claiming that he was unable to work.

The investigation of this matter was conducted by the Office of the Insurance Fraud Prosecutor (OIFP) and the Cooperative Disability Investigations Unit (CDIU) which is comprised of the Division of Criminal Justice, the Social Security Administration Office of the Inspector General and the New Jersey Department of Labor's Division of Disability Determination Services. Supervising State Investigator Edward Buttimore and Deputy Attorney General Peter Lee were in charge of the investigation into this case. Deputy Attorney General Lee presented the case to the State Grand Jury. All are assigned to the Division of Criminal Justice's Office of the Insurance Fraud Prosecutor.

"This office continues to see cases of theft from disability insurance programs, both private plans and government sponsored plans such as Social Security. Working and earning income while you simultaneously collect disability insurance can constitute theft,A said Insurance Fraud Prosecutor Greta Gooden Brown. AThis office will continue to investigate and prosecute these cases."

Noting that some important cases have begun with anonymous tips from the public, Prosecutor Brown emphasized that individuals can make a difference. "We need people's information, not their identities. People who are concerned about insurance cheating and have any information about a fraud can call our toll-free hotline at 1-877-55-FRAUD, or visit our Web site at www.NJInsurancefraud.org ."

The indictment was handed up to Mercer County Superior Court Judge Linda R. Feinberg, the assignment Judge in charge of the State Grand Jury. The case will be venued in Middlesex County. Zaccardi will be ordered to appear in Middlesex County to answer the charges on a date to be determined.

An indictment is merely an accusation. The defendant is presumed to be innocent of the charges unless and until the State proves him guilty beyond a reasonable doubt.

Housed in the Department of Law and Public Safety's Division of Criminal Justice and reporting to the Attorney General, the Office of Insurance Fraud Prosecutor was established by the Automobile Insurance Cost Reduction Act of 1998 (AICRA). The Office is the centralized state agency that investigates and prosecutes both civil and criminal insurance fraud, as well as Medicaid fraud. Criminal convictions for insurance fraud can result in fines and imprisonment, while civil penalties can include substantial fines and referral for revocation or suspension of professional licenses.

Resource: http://www.state.nj.us/lps/newsreleases/p20311a.htm

Social Security Scam.

Since the extinction of those Barry Goldwater types, the issue of ending social security as we know it has rarely reared its head. Most presidential elections consist of presidential candidates hurrying to convince the program's recipients that benefits will not be cut. In fact, many candidates seem willing to pluck out their own eyes rather than see any reduction in social security benefits. Social security has been an amazing program that just refuses to die or even just be criticized. Unlike social security, welfare programs strictly intended for the poor are often a subject of contention. In 1994, many Republican candidates actually won elections after promising to cut welfare benefits. In 1995, Bill Clinton, a Democrat, signed a bill refusing welfare benefits to some recipients who didn't find jobs. He got re-elected a year later. Some folks out there doesn't like welfare. There are deep economic and geographic divisions between those who support and those who oppose welfare. We know who's for it and who's against it.

Who opposes social security? I once heard that there were some libertarians somewhere out west that opposed the program. Other than that, the field seems pretty empty. The brilliance of social security is that it avoids the potential social divisions which might cause some resistance to the program. One cannot point to any social class that stands in general opposition to social security. There is certainly no region that is known for its opposition to the program. Certainly social security will be more important to a candidate campaigning in a state with a lot of old people like Florida or Arizona, but you never hear about a presidential candidate emphasizing his anti-social security platform in, say, Nevada. There simply isn't a place where there aren't a lot of people who are eligible for the program at some point in the future. Everywhere you go there are plenty of people who can't wait to receive that first check.

The absence of these political divisions helps to solidify the foundation of political support for the social security program. In the past, welfare programs have faced opposition from those who foot the bills. After the Civil War, Southern workers paid for pensions for Union soldiers. The Southerners resented it. In modern times, Americans in rural areas and small towns tend to pay for the welfare programs that support many urban dwellers. They too resent paying the bills for others. The resentment often translates into political opposition. The Democratic party opposed the soldier pensions in the 19th century. The Republican party has opposed social welfare programs in the 20th century. Where's the opposition to the social security benefit?

Since those who pay for the system are diffused throughout the social classes and geographical areas, no natural anti-social security constituency has ever formed. Added to this is the fact that most people welcome the prospect of getting checks themselves someday. Many Americans still believe in the mythical "trust fund" that supposedly holds our money as we wait to retire. They think that they get back the money that they paid into the system during their working lifetimes. The reality is that people generally use up the money they paid in within five years. Every dime received in social security benefits after that point is paid for by some working stiff in a cubicle somewhere. The idea of the social security entitlement has permeated all levels of American society. Most everyone is a potential recipient and most everyone is OK with it. "Social security mom" doesn't have quite the stigma that "welfare mother" has. Social security is supposed to be something you earned. Good for you.

The other group that absolutely loves the social security program is government itself. The program guarantees that a constant stream of tax dollars flow through Washington so that all the politicos and bureaucrats can skim a little off the top. Thanks to creative government accounting, social security funds are de facto general revenues, and they have the potential to benefit every government agency. Thanks to social security taxes, campaigning politicians can make a lot of talk about cutting income taxes yet still promise greater social security benefits. They all know that anything other than a massive income tax cut would be only a drop in the bucket compared to the steady stream of payroll tax money that flows into the government coffers. As a result, the pro-social security forces are so widespread and so diffused through the population, that it seems that no opposition could ever arise.

Problems for the system will begin to come when revenues start to get tight. As the retired population begins to overwhelm the working population, payroll taxes will have to rise in order to keep the retired folks fat and happy. If one wishes to actually collect revenue though, taxes just can't keep going up every time social security needs a few extra bucks. Changes in eligibility will have to be made. As has already begun to happen, the minimum age of eligibility will creep up. In the age of water skiing and ice climbing 70-year-olds it will become more and more difficult to justify benefits for everyone who has attained retirement age. Also, it is likely that some kind of income cap will eventually be put in place. It will be hard to justify sending social security checks to Aunt Maude on her Carnival cruise liner while the agency is scratching for cash. If an income cap comes to pass, it will prove to be a crucial development in social security policy. Such a development would change the incentive structure in social security. The program would begin to take on the look of a program that was paid for by people who planned for retirement to benefit the people who did not plan for retirement. Taxpayers would begin to feel the sting of paying for benefits that they might never receive. Of course, all that such a development would do is expose the reality of social security that has always existed. It has always been a program which benefited people who worked less and saved little at the expense of those who worked often and saved a lot. The deception which the program is founded on has contributed to the public's perception of the program as just a big savings program with government oversight. As the program begins to get needy for cash, the big lie will be harder to keep alive. It will become clear where the money is coming from and where it's going. As politicians tell us that the more well-off retired people must sacrifice their benefits for the more needy retired, resentment will begin to build and the social security myth will begin to die. Those who saved will find that they are paying for those who did not. The program will look more and more like the welfare program that it has always been. Its founders were ingenious enough to include all retired instead of just the poor retired in order to give the "trust fund" nonsense some credibility. It's never been more than a welfare program though, and it should be labeled accordingly.

The prospects for anything of the sort happening in the near future are pretty scarce. Having made a big issue of it in the presidential campaign, George W. Bush might feel the need to pay it a little lip service before his term ends. It would be political suicide to take any meaningful action, though. There's a lot of talk in the media about how the system is supposed to run out of money in thirty years. They don't mention the fact that most everyone in government will be dead or in diapers thirty years from now. Unless something cataclysmic happens in the very, very near future, Congressional action is unlikely. For those with libertarian sensibilities though, the sooner the social security system has money problems the better. Only when average working American wake up to the fact that social security takes from those who work and gives to those who don't (or never have) the better off we'll be. Until then, those folks in Washington will continue to take our money, give us a tiny bit of it back, and a we'll all think we're getting a great deal.

Resource: http://www.lewrockwell.com/mcmaken/mcmaken11.html

Social Security Number Fraud.

When Social Security numbers were first issued in 1936, the federal government assured the public that use of the numbers would be limited to Social Security programs. Today, however, the Social Security number (SSN) is the most frequently used recordkeeping number in the United States. SSNs are used for employee files, medical records, health insurance accounts, credit and banking accounts, university ID cards, and many other purposes. In fact, the Social Security number is now required for dependents over one year of age if the parents claim the child for tax purposes.

Why is my Social Security number used so often as an identification number?

Computer records have replaced paper filing systems in most organizations. Since more than one person may share the same name, accurate retrieval of information works best if each file is assigned a unique number. Many businesses and government agencies believe the Social Security number is tailor-made for this purpose. However, with the rise in the crime of identity theft and other illegitimate uses of the SSN, this assumption is not valid.

Beginning on July 1, 2003, California laws (CA Civil Code section 1798.29 and sections 1798.82 - 1798.84, http://www.privacy.ca.gov/code/cc1798.291798.82.htm) came into effect that require any company that maintains personal information in electronic data files such as Social Security numbers to notify any California residents whose information may have been accessed by unauthorized persons. For more information about this California law, see the resource provided by the California Office of Privacy Protection at www.privacy.ca.gov/recommendations/secbreach.pdf.

Why is it important to keep the Social Security number private?

The crime of identity theft is increasing at epidemic proportions. With the Social Security number accessible to so many people, it is relatively easy for someone to fraudulently use your SSN to assume your identity and gain access to your bank account, credit accounts, utilities records, and other sources of personal information. Identity thieves can also establish new credit and bank accounts in your name. (See PRC Fact Sheets 17 and 17a on identity theft, www.privacyrights.org/identity.htm.)

Your Social Security number is also frequently used as your identification number in many computer files, giving access to information you may want kept private and allowing an easy way of linking data bases. Therefore, it is wise to limit access to your Social Security number whenever possible.

Am I required to give my Social Security number to government agencies?

It depends upon the agency. Some government agencies, including tax authorities, welfare offices and state Departments of Motor Vehicles, can require your Social Security number as mandated by federal law (42 USC 405 (c)(2)(C)(v) and (i)). Others may request the SSN in such a manner that you are led to believe you must provide it.

The Privacy Act of 1974 requires all government agencies -- federal, state and local -- that request SSNs to provide a "disclosure" statement on the form. The statement explains if you are required to provide your Social Security number or if it is optional, how the SSN will be used, and under what statutory or other authority the number is requested (5 USC 552a, note). The U.S. Office of Management and Budget, Office of Information and Regulatory Affairs (OIRA) provides guidance and oversight regarding the Privacy Act of 1974. The text of the Privacy Act can be found at the website www.usdoj.gov/foia/privstat.htm.

The Privacy Act states that you cannot be denied a government benefit or service if you refuse to disclose your SSN unless the disclosure is required by federal law, or the disclosure is to an agency which has been using SSNs previous to January 1975, the date when the Privacy Act went into effect. There are other exceptions as well. Read the U.S. Department of Justice's explanation at this website, www.usdoj.gov/04foia/1974ssnu.htm.

If you are asked to give your Social Security number to a government agency and no disclosure statement is included on the form, complain and cite the Privacy Act. Unfortunately, there appear to be no penalties when a government agency fails to provide a disclosure statement.

Do I have to provide my Social Security number to private businesses?

Usually you are not legally compelled to provide your Social Security number to private businesses -- including private health care providers and insurers -- unless you are involved in a transaction in which the Internal Revenue Service requires notification. (MediCal and Medicare are government health plans and can require a Social Security number.)

There is no law, however, that prevents businesses from requesting your SSN, and there are few restrictions on what businesses can do with it. But even though you are not required to disclose your SSN, the business does not have to provide you with service if you refuse to release it.

If a business insists on knowing your Social Security number when you cannot see a reason for it, speak to an administrator who may be authorized to make an exception or who may know that company policy does not require it. If the company will not allow you to use an alternate number, you may want to take your business elsewhere.

Credit card applications usually request Social Security numbers. Your number is used primarily to verify your identity in situations where you have the same or a similar name to others. Although most credit grantors will insist on having your SSN, you may be able to find a credit grantor who will provide you credit without knowing your SSN, especially if you are persistent and can provide other forms of identification. But such instances are rare.

In California, a new law restricts how certain businesses can display their customers' Social Security numbers. It does not restrict the collection of SSNs, however, and it does not affect government agencies. California Civil Code 1798.85 is being phased in from 2003 to 2005. Insurance companies will not be able to print the SSN on identification cards to be carried in the wallet. Customers of banks and investment companies cannot be required to transmit the SSN over the Internet when conducting business online, unless the number is encrypted. SSNs cannot be printed on documents sent through the mail, with some exceptions. The California Office of Privacy Protection provides a guide for businesses on "recommended practices" for using SSNs. It includes a description of the new law, www.privacy.ca.gov/recommendations/ssnrecommendations.pdf. The full text of the law is found on the state's official legislative web site, www.leginfo.ca.gov.

Should I provide my Social Security number over the Internet?

Many individuals now shop on the Internet. In some instances a commercial website might require your SSN, for example if you apply for a credit card online. We advise that you take extra precautions to determine that your personal data is transmitted securely and that it is stored safely by the online business.

Only conduct such transactions with known, reputable companies. Look for the closed padlock symbol on the bottom of the page. Read the company's privacy policy to learn how it safeguards your customer data. If necessary, call the company and talk to an individual who is knowledgeable about its security practices. Do not conduct business with the company if it does not appear to safeguard its customers' data adequately. For more online shopping tips, read the PRC's Fact Sheet number 23, www.privacyrights.org/fs/fs23-shopping.htm.

Be on the alert for unsolicited electronic mail messages in which your SSN and other personal information are requested. Many individuals report having received e-mail messages that appear to be from their Internet Service provider, for example AOL, or from a government agency like the Internal Revenue Service. The message typically states that the company or agency is updating its records and that it needs certain information from you, such as Social Security number. Do not respond to such messages. Even though they appear to be official, these messages and/or websites are a scam. No reputable company or government agency sends unsolicited e-mail messages to individuals in which sensitive personal data is sought in this manner.

Can my employer use my SSN as an employee identification number?

Yes. However, the Social Security Administration discourages employers from displaying Social Security numbers on documents that are viewed by other people such as badges, parking permits, or on lists distributed to employees. Employers do, however, need each employees' Social Security number to report earnings and payroll taxes.

California has a law that prohibits employers from publicly posting or displaying an employee's Social Security number (SSN). The California Office of Privacy Protection has a comprehensive guide that outlines this law in more detail at www.privacy.ca.gov/recommendations/ssnrecommendations.pdf. Another law, effective January 1, 2008, requires employers to print no more than the last four digits of an employee's SSN, or to use an employee ID number other than the SSN, on employee pay stubs or itemized statements.

Why do financial transactions require my Social Security number?

In 1961 the Internal Revenue Service began using Social Security numbers as taxpayer ID numbers (TIN). Therefore, SSNs are required on records of transactions in which the IRS is interested. That includes most banking, stock market, property or other financial transactions as well as employment records. Since your Social Security number must be included on all of these sensitive financial documents, it is important to limit other uses of the number.

How can a school use my Social Security number?

Publicly-funded schools and those that receive federal funding must comply with the Family Educational Rights and Privacy Act in order to retain their funding (FERPA, also known as the "Buckley Amendment," enacted in 1974, 20 USC 1232g). One of FERPA's provisions requires written consent for the release of educational records or personally identifiable information, with some exceptions. The courts have stated that Social Security numbers fall within this provision.

FERPA applies to state colleges, universities and technical schools that receive federal funding. An argument can be made that if such a school displays students' SSNs on identification cards or distributes class rosters or grades listings containing SSNs, it would be a release of personally identifiable information, violating FERPA. However, many schools and universities have not interpreted the law this way and continue to use SSNs as a student identifier. To succeed in obtaining an alternate number to the SSN, you will probably need to be persistent and cite the law. Social Security numbers may be obtained by colleges and universities for students who have university jobs and/or receive federal financial aid. In Krebs v. Rutgers, the court ruled that SSNs are "educational records" under FERPA (Krebs v. Rutgers, 797 F. Supp. 1246 (D.N.J. 1992)).

The FERPA text can be found at the web, www.cpsr.org/cpsr/privacy/ssn/ferpa.buckley.html. For the U.S. Department of Education's web site on FERPA, see www.ed.gov/offices/OM/fpco/ferpa/index.html.

Public schools, colleges and universities that ask for your SSN fall within the provisions of another federal law, the Privacy Act of 1974. This act requires such schools to provide a disclosure statement telling students how the Social Security number is used. If you are required to provide your SSN, be sure to look for the school's disclosure statement. If one is not offered, you may want to file a complaint with the school, citing the Privacy Act.

When the school is a private institution, your only recourse is to work with the administration to change the policy or at least to let you use an alternate identification number as your student ID.

Can a state use my SSN as my drivers' license number?

No. The Intelligence Reform and Terrorism Prevention Act of 2004 prohibits states from displaying your SSN on drivers' licenses or motor vehicle registrations. The law went into effect on December 17, 2005 and applies to all licenses, registrations, and identification cards issued after that date.

More information on the Act is available from the Social Security Administration at www.ssa.gov/legislation/legis_bulletin_010705.html and from the Congressional Research Service at www.fas.org/irp/crs/RL32722.pdf.

How can I avoid releasing my Social Security number?

Here are some strategies to protect your Social Security number:

1. Adopt an active policy of not giving out your SSN unless you are convinced it is required or is to your benefit. Make people show you why it is needed.

2. Never print your Social Security number on your checks, business cards, address labels or other identifying information. Do not carry your SSN card in your wallet, or other cards containing the SSN. Your wallet could be lost or stolen. Attempt to resist merchants' requests to write your SSN onto your checks. Explain how you could become a victim of fraud if someone were to use your SSN and account number to gain access to your bank or credit accounts, or to open new accounts in your name.

3. Pay attention to your Social Security Personal Earnings and Benefit Estimate Statement. The Social Security Administration (SSA) mails it each year about three months before your birthday. Be certain the information in the file is correct. You can also contact the SSA at (800) 772-1213 to learn how to obtain this free report. If incorrect information is recorded, contact the SSA immediately. Someone may be fraudulently using your SSN for employment purposes. The Social Security Administration's fraud department can be reached at (800) 269-0271. Its website is www.ssa.gov.

4. Order a copy of your credit report each year. If you are a victim of identity theft, the credit report will contain evidence of credit or banking fraud committed using your name and SSN. It will also show other SSNs associated with your name. (See PRC Fact Sheet number 6 on credit reporting, www.privacyrights.org/fs/fs6-crdt.htm.)

5. If a private business requests your Social Security number:

• Leave the space for the SSN on the form blank or write "refused" or N/A in that space.
• Speak to someone in authority or write to the business and explain why you do not want your SSN used to identify you. If you do not receive satisfaction from the first person you contact, go to a person in the organization with more authority.
• Insist that the company document its policy of requiring a Social Security number. If a written policy cannot be found or too much time is taken hunting for one, the business may allow you to use an alternate number.
• Ask why your Social Security number is requested and suggest alternatives like your driver's license number (except if your driver's license number is the SSN, and you have not yet obtained a different number from your state's Department of Motor Vehicles).
• If the company insists on having your Social Security number, tell it you will take your business elsewhere. If the company persists, follow through on your promise.

6. In California, utilities cannot deny you service if you refuse to provide your Social Security number. However, a deposit may be required if you will not provide the information.

7. If your employer releases or displays your SSN, you may want to explain why you object. Most employers do not treat SSNs as confidential information. But they may be willing to change their policy when they understand the twin dangers of invasion of privacy and fraud.

8. If your bank, credit union or other financial service provider uses your Social Security number as a personal identification number (PIN) or as the identifier for banking by phone or the Internet, write a letter of complaint. Demand to have a different PIN and/or identification number assigned. Explain why the SSN is an extremely poor choice for a password or security code. If you use the last four digits of your SSN as your PIN for ATM and other banking or credit transactions, change it to something else, but not to a common number such as your birthdate.

9. If your state's Department of Motor Vehicles uses the SSN as the driver's license number, ask for an alternate number. Federal law now requires state Motor Vehicles departments to use a number other than the SSN for the driver's license number.

For more information

The Privacy Rights Clearinghouses gratefully acknowledges the assistance of Chris Hibbert of Computer Professionals for Social Responsibility in preparing this fact sheet. His SSN FAQ can be found at the CPSR website, www.cpsr.org/cpsr/privacy/ssn/ssn.faq.html.

Resource: http://www.privacyrights.org/fs/fs10-ssn.htm

Investment Scam.

7 Tips To Avoid.

Every industry has its scam artists, and real estate is no exception. While most of the professionals who work in real estate are ethical and honest, there are people in the industry who want to take your money and run. Worse, there are scam artists who use real estate as a cover. These fraudsters may know nothing about real estate but simply use properties to extract money from victims. Sadly, properties mean large amounts of cash and this can attract criminals. You don’t have to be a victim, though. Whether you are investing in real estate or buying your own home, there are a few things you can do to stay safe:

1) Get it in writing.
The simplest and most effective way to stay safe is to assume that nothing is concrete until it is in writing and signed. Any verbal promised made simply does not count unless it is in a legally binding contract, so never assume anything until you have a contract in hand. Never assume that someone will follow through on a promise of any kind unless there is a viable contract.

2) Get professional advice.
An experienced real estate attorney should be looking at any property contracts you sign. If you are interested in investing, join a real estate club so that you can get advice and help from professional investors. If you are buying a home, get the help and input of a professional assessor and inspector. Interested in learning about real estate investing? Make sure that your instructor is an experienced and qualified investor themselves. Aim to work with the best professionals you can find. Whether you need to find the value of a home or the loopholes in a contract, turn to the appropriate professionals. They will help you uncover shady deals.

3) Keep abreast of common real estate schemes.
Thank goodness real estate scam artists (like other fraudsters) are not too original. In many cases, criminals will use the same scams again and again. If you are buying a home, refinancing, selling, or investing, find out from the media and from the IRS about common scams. That way, you can watch out for red flags.

4) Deal only with professionals.
Make sure that anyone you are dealing with – from a real estate agent to a real estate attorney – has the right qualifications for their job. If you are dealing with a buyer, make sure that they are honest about their employment and credit history. Scam artists will often invent elaborate backgrounds in order to gain your trust. If you detect the lie, you can detect the fraudster, so do your research.

5) Ask lots of questions.
Be willing to trust yourself to walk away if an offer is too good to be true or if your questions are not answered to your complete satisfaction. Any real estate deal you make should have a benefit for you and a benefit for the other party. If the deal seems to favor you, find out what the other party is getting.

6) Keep an eye out on your credit scores and accounts.
In many cases, real estate fraud ends with identity theft. Fraudsters may take your property under false pretenses or use your personal information to open accounts in your name. You are entitled to one free credit report per year from credit bureaus. This shows you how much you officially owe and which accounts you have open. Keeping tabs on your finances ensures that you don’t become a victim.

7) Don’t pay more than you can afford for real estate.
If you are buying, don’t pay more than you have to. Fraudsters will often try to have you spend too much or sell for too little so that they can pocket the difference. A classic scam in real estate involves a con artist with charm or an urgency encouraging you to sell your home for nothing or encouraging buying a property for far more than it is worth. Always know the value of real estate you are dealing with and budget accordingly.

These simple tips can prove helpful when doing business in real estate. These basic tips cover most types of real estate fraud and help you avoid the real estate scams that are out there. Good business common sense can help you stay safe.

Social Security Fraud.

Treasury Secretary Paul O’Neill upset some people recently simply by telling the truth. He had the temerity to say that the Social Security Trust Fund has no tangible assets. It’s empty.

Such candor is not rewarded in Washington, D.C., the balderdash capital of the world. One of those who got upset was Rep. Charles Rangel, ranking Democrat on the House Ways and Means Committee. Of course the Trust Fund has tangible assets, Rangel said. It’s full of government bonds. What could be more tangible than that?

Rangel was either showing his penchant for demagoguery or his ignorance. Tough call.

O’Neill is right. The Trust Fund is a figment of our collective imagination. There’s no “there” there. It doesn’t exist.

Every cent that the American people pay in FICA payroll taxes is immediately spent. Anything left over after the current retirees are paid off goes into the general treasury where it is used, first, to make up any operating shortfall, and then to pay the government’s creditors. The Social Security Trust Fund is credited for that money in the form of nonnegotiable bonds that purportedly earn interest.

What if there was no trust fund at all? When FICA revenues fell short of retiree benefits, as they will in about 15 years, the government would have four options: cut benefits, cut other spending, raise taxes, or borrow.

But under the current system, when revenues fall short the government will still have to cut benefits, cut other spending, raise taxes, or borrow.

In other words, there’s no difference between having the trust fund and not having it.

It’s worse than a fiction. It’s a lie. Rangel may believe Social Security holds tangible assets, but no one else who has taken a close look could possibly think that. From the start, Social Security propagandists, led by Franklin Roosevelt, have tried to make the American people believe the system was like any private-sector pension program. They called taxes — i.e., forced exactions under threat of imprisonment — “contributions” and conjured up the phony-baloney trust fund. They wanted us to think that the money we “contribute” is put away for us individually, somehow invested so that when we retire we can draw a return on our money.

Nonsense! There can’t be a return: our money is consumed and gone forever. All the politicians really promise is that when we retire they will tax someone else and give that money to us.

I guess you could say that Social Security really does hold tangible assets: the taxpayers. But that sounds more like a hostage-taking or slavery than a pension program.

They also made Americans believe that employers contributed to the system. What a crock! It only appears that workers “contribute” about 6 percent of their wages, matched by a like amount from their employers. In reality there is no way that employers can make a contribution. Anything they pay is simply another form of compensation to their workers. If there were no Social Security, that cash would go directly to employees. The employer contribution is another illusion in a thoroughly dishonest system.

It is true that the system “worked” for a long time. That is, retirees for many years collected more in benefits than they ever paid in while working. That’s because the postwar baby boom supplied many more workers than there were retirees and politicians strove to buy votes from senior citizens by taxing workers ever more and raising benefits ever higher. But that party is about to end. Before long there will be about two workers for each retiree. Something will have to give. Will the working generation put up with dramatically higher payroll or income taxes to support the retired boomers? Or will they demand that other government spending be cut? As the government consumes more and more scarce resources, how will Americans respond to the resulting slower economic growth or even stagnation?

These vexing questions are what FDR and his New Deal bequeathed to us. Maybe that new monument on the Washington Mall should have been dedicated to Charles Ponzi.

Resource: http://www.fff.org/comment/ed0901j.asp

Securities Fraud.

For a discussion of the legal actions for securities fraud in the United States under the Securities Exchange Act of 1934 and SEC Rule 10b-5 promulgated thereunder, see the Wiki entry for the Private Securities Litigation Reform Act.

Civil securities fraud, also known as investment fraud, is a practice where investors are deceived and manipulated, resulting in theft.[1]

This is a form of white collar crime which has been increasing on the rise as the Internet and the World Wide Web have brought white collar criminals and their victims closer together, resulting in an upsurge in global economic crime. The trading volume in the United States securities and commodities markets has grown dramatically over the last decade. This growth has led to an increase in fraud and misconduct by investors, executives, shareholders, and other market participants. Securities regulators and other prominent groups have estimated that civil securities fraud totals approximately $40 billion per year. Fraudulent schemes perpetrated in the securities and commodities markets can ultimately have a devastating impact on the viability and operation of those these markets.

Securities fraud is becoming more complex as the industry develops more complicated investment vehicles in an effort to obtain higher rates of return. In addition, white collar criminals are expanding the scope of their fraud and are looking outside of the United States for new markets, new investors to defraud and banking secrecy havens to hide their unjust enrichment. The securities industry is one of the most critical and influential industries in the country and is regulated by the SEC.

A study conducted by the New York Stock Exchange in the mid-1990s revealed that approximately 51.4 million individuals owned some type of traded stock, and an additional 200 million individuals owned securities indirectly. These same financial markets provide the opportunity for wealth to be obtained and the opportunity for white collar criminals to take advantage of unwary investors.

Recovering assets from the proceeds of securities fraud is a resource intensive and expensive undertaking.

Potential victims of this crime are anyone who has invested money into the company; typically people aged 50 years or older are the most victimized by Securities Fraud. Potential perpetrators of Securities Fraud are any high ranking official within the company who might have access to the payroll or financial reports that can be manipulated.

Recent examples of securities fraud are the Enron and Worldcom scandals. Both companies are guilty of theft of investors and defrauding the federal government with fraudulent tax reports.

The elements of the crime are theft of capital from investors and defrauding the accounting companies about your financial reports

Investment Fraud.

Investment fraud is not limited to stock frauds and securities fraud. Instead it spans a wide spectrum of scams that include invention scams and rare item investment scams. The scope of investment scams has reached epic proportions with millions of dollars being fraudulently stolen from consumers each year.

If you want to protect yourself from investment frauds and scams that you need to learn how to identify the warning signs of a potential scam. The first warning sign is that the offer sounds too good to be true. The second warning sign is that the seller of the offer is using high pressure sales tactics such as forcing you to make a decision to invest right now. Another warning sign is that you are contacted via phone without requesting information about the investment opportunity. The scam artist may also ask for your social security number or credit card information over the phone. These are all signs that you are being targeted by a scam artist. There are several federal documents and pamphlets that you should read through that tell you what to look for and what scams are currently circulating. You can request fraud education materials from the Federal Trade Commission, the SEC, and from your state’s securities regulator.

If you find that you have been victimized by a securities fraud or some other type of investment fraud then you need to take immediate action to correct the situation. First you need to report your victimization to the authorities. Try to provide them with as much information as you can about who contacted you, how they contacted you, how you funded your investment and any other information that you have. You will also want to contact an SEC lawyer, a securities fraud attorney or an investment fraud lawyer. They will be able to help you develop a case against the company or person who victimized you, they will be able to answer your questions, and they will help you to win your lawsuit against the perpetrators of the fraud in question.