What is Welfare Fraud?

Welfare fraud describes the intentional misuse of various state funded welfare programs.  It may consist of withholding certain information or providing inaccurate or false information to receive benefits.  The most common types of welfare fraud include failing to report additional income, failure to disclose information regarding household family members, or supplying false information about an inability to work.  There have also been instances were people feigned illness or injury to manipulate the welfare system. 

The Cost of Welfare Fraud

In general practice, welfare fraud often consists of someone acquiring benefits that are undeserved to them.  An error may occur where a recipient collects benefits in their name in a situation where they don't qualify, or they may collect benefits on behalf of someone who will never receive the funds. 

Welfare fraud has proven to be rather expensive, costing the system millions in misused benefits every year.  In each U.S. state, the penalty for extensive fraud warrants a felony convention, one that could land a perpetrator in prison for many years.  Due to the growing rate of this crime, several states now offer large rewards for the reporting of welfare fraud that leads to a conviction. 


Welfare fraud has been widely criticized by advocates of the system because this abuse makes funds less available to those who actually need the benefits.  It has also been criticized by opponents of the system who believe the crime creates situations where hard working taxpayers are supporting the middle class and a lavish lifestyle for criminals.  These critics have coined the terms "welfare Cadillac" or "welfare Queen" to instances or individuals associated with welfare fraud. 

Examples of Welfare Fraud

1.) In 1977, the executive director of the Illinois Legislative Advisory Committee for Public Aid took action against Linda Taylor, a Chicago resident.  It was claimed that Taylor used 14 alias names to receive an estimated $150,000 in medical coverage, cash assistance and food stamps.  It was said that the woman migrated from district to district using these aliases to fraudulently obtain benefits.   

2.)  In 1981, Dorothy Woods was jailed on 12 counts of welfare fraud.  She claimed 38 non-existent children and manipulated the system for more than $300,000.  The most disturbing part about this story is that Woods was rumored to be a wealthy woman before committing the crime. 

3.)  Arlens Otis of Cook County, Illinois was indicted on 613 counts of fraudulently receiving $150,839 in welfare benefits from July of 1972 to February of 1978.

4.)  The biggest case of welfare fraud came when Barbara Williams was found guilty of manipulating Los Angeles County for $239,000 in benefits.  The crime provoked a conviction that sentenced her to eight years in prison.  

Welfare fraud is a crime that can be easily avoided.   This can be done by accurately reporting all of your information to an agency, including job status and the number of family members residing in your home.  Additionally, it is wise to refute the efforts of anyone that attempts to involve you in this type of fraud. 

You can report this crime by contacting your local welfare office. 

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Fraud causes hundreds of millions of dollars in damage each year and affects just as many people.

Credit card fraud is the most common type of fraud to occur each year and cost its victims up to $500 million dollars in damages each year. Despite the frequent occurrence of this type of fraud, millions of credit card users are still unaware of how to protect themselves against this type of thievery.

No one is completely safe from being defrauded. But, by learning how to protect against fraud, you will be better equipped to prevent yourself from falling into a scam that could cost you everything. Taking the time to protect yourself can help to keep you safe.