Lotto winners bilk the welfare system by continuing to collect after hitting huge jackpots
Updated: Friday, November 8 2013, 01:29 PM EST
Reported by: Chris Papst
HARRISBURG -- There are thousands of people in Pennsylvania who are on welfare because they truly need it, but not everyone.
We learned during this investigation that it is possible to win big in the lottery and still collect Pennsylvanians’ tax dollars in the form of welfare checks.
The Department of Public Welfare (DPW) could stop this from happening, but it's not. It was January 2012, and Lancaster County resident Jamie Frankford had just won $330,000 in the Pennsylvania Lottery. When Frankford hit big on Cash 5, it just continued her lucky streak.
Since July 2009 she has won $344,000. Prior to January 2012 Frankford was collecting welfare, including daycare and medical insurance. Afterwards, she kept collecting.
Under state law, welfare recipients must report lottery winnings to DPW. Their benefits are then adjusted.
CBS 21 News obtained confidential court documents from a custody dispute between Frankford and the father of one of her children.
On May 31, Frankford admitted under oath she didn’t tell the state she won the money. She was asked by counsel, “You didn’t pick up the phone and say, ‘Guess what, taxpayers of the Commonwealth of Pennsylvania, I have $247,000 net in my back account?” Frankford responded, “No.”
Frankford wasn’t willing to give us a comment when we went to her house, so we went to the person in charge to find out how this can happen.
CBS 21 News asked Department of Public Welfare Secretary Beverly Mackereth how the state couldn’t know someone like Frankford won the money when she won it from the Pennsylvania Lottery.
Mackereth said, “Because we don't have systems that talk to each other. Because they cost a lot of money.”
Mackereth said DPW’s budget for technology is slim, and its programs are antiquated – meaning people can win big in the lottery and the welfare department would never find out.
“When we get to the point where the budget is passed and they come back and say DPW cut $400 million, a lot of times the IT budget is cut,” said Mackereth.
Mackereth said sometimes it simply costs too much money to try to find people like Frankford. That explains how her winnings were not discovered by DPW, but it doesn’t explain how Frankford can continue to collect your tax dollars – to this day – since the state now knows.
That part is legal. Under state law, lottery winnings are not considered income, but rather a lump sum that only affects certain benefits for that month.
So even though Frankford could afford an Akron home for $143,500 and a Dodge Journey, she is still welfare-eligible.
"We can do better,” Mackereth said. “I'm not going to sit here and say we are doing a great job with this. But the message is clear and we can do better and we're going to do better.”
Mackereth admits the state has a lot of work to do, especially considering the only reason DPW knows this woman hit the lottery is because of Tillie Tegtmeier.
She is the future stepmother of Frankford’s son, and she blew the whistle.
“I just don’t understand it. You can go on TV with a great big check with a smile on your face, but you can’t tell the state, ‘On by the way, you don’t need to continue to pay for my children. I can handle that now,’” Tegtmeier said.
After seeing CBS 21 News’ promo for this story, Frankford did finally contact us.
She said she realizes what she did was wrong, and she does plan to pay back the money. She said there is an investigation into what she did and once it is finished she’ll know what she owes. But sources within the government tell us she could face felony charges of fraud for not reporting her winnings.
But even if she is found guilty, she could potentially get right back on the rolls. In Pennsylvania, you have to be convicted three times of welfare fraud before you are kicked off the system permanently.