The United States Attorney's Office announced that during a federal court session in Great Falls, on September 19, 2011, before U.S. District Judge Sam E. Haddon, SHANNON LEE PITZER, a 50-year-old resident of Great Falls, pled guilty to theft of federal property by fraud and federal welfare assistance fraud. Sentencing has been set for December 29, 2011. He is currently detained.

In an Offer of Proof filed by Assistant U.S. Attorney Carl E. Rostad, the government stated it would have proved at trial the following:

In January 2008, PITZER applied for Supplemental Security Income (SSI) benefits in Great Falls. In her application, she indicated that her husband did not reside with her. Her eligibility was based on her disabilities (chronic pain, back problems, anxiety, OCD, and other limitations), household composition (herself and a dependant), and income consisting only of other public assistance.

An investigation determined her husband, a violent offender required to register with law enforcement as to his current residence, had lived with PITZER more or less continuously since June of 2006, and had contributed income to the household which would have disqualified PITZER from the receipt of SSI, SNAP (formerly the Food Stamp Program) benefits, and Section 8 housing assistance. PITZER's husband was employed by a local construction contractor and had significant income from that employment and, when not working, from unemployment compensation benefits during the time he lived with PITZER.

PITZER's husband was interviewed and stated that except for a three month period from May 1, 2010, until July 2, 2010, when he got an apartment in Great Falls, he had lived with PITZER in their residence. He also admitted that even when he lived at the apartment, he spent many nights at their house.

When PITZER was interviewed, she first claimed that her husband did not live with her but, after being confronted with the evidence to the contrary, admitted that he did live at with her "70% of the time." Both her husband and PITZER indicated that he has always contributed a portion of his income to the maintenance of their household.

As a result of her false statements regarding household composition and income, PITZER received $22,183 in SSI benefits to which she was not otherwise entitled, and, for the period of August 2006 until May 2011, $24,997 in housing assistance from HUD. Between January 2006 and January 2011, PITZER received approximately $12,500 in USDA food stamps, later SNAP benefits, to which she was not entitled. Because she was on SSI, PITZER also qualified for a one-time payment of $250 from American Recovery and Reinvestment Act of 2009 (ARRA), funds distributed through Social Security. That amount is already included in the SSA overpayment figure. PITZER also received $33,650 in Medicaid benefits which she would not have been given if she had reported truthfully.

The total overpayment from all four (SSA, HUD, AG, HHS) welfare sources was $93,330.

In November of 2008, HUD had determined that PITZER should be terminated from Section 8 Housing because of her husband's income and because he lived in the household. In an effort to retain those benefits, PITZER wrote a letter to HUD stating that "her husband is living with his sister" and that "he has not lived with me since my grandaughter (sic) was born ...." To substantiate that claim PITZER supplied several letters from family and neighbors. One of those letters was from her husband's sister who stated "My brother resides with me at 1323 6th Ave N." The sister was interviewed with regard to allegations of witness tampering and admitted writing the letter at PITZER's insistence and that it was false. She reiterated her statement that her brother never lived with her.

After PITZER was indicted she apparently changed her mind about the statements of culpability that she had given to the agents, and took the position that her husband had not lived with her or contributed to the family fisc and, therefore, her claims for benefits were not fraudulent. She approached both her husband and his sister and told them what to say to substantiate her defense.

PITZER faces possible penalties of 10 years in prison, a $250,000 fine and 3 years supervised release.

The investigation was a cooperative effort between the Social Security Administration - Office of Inspector General, the U.S. Department of Housing and Urban Development - Office of Inspector General, and the U.S. Department of Agriculture - Office of Inspector General.

A copy of the Offer of Proof can be obtained by contacting Sally Frank at (406) 247-4638.

 

 

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