Shocking Video Reveals Vulnerability to Fraud within Maine's Welfare System

By • Aug 14th, 2011 • Category: Me. Heritage Policy Center News

DHHS Worker: “If you don’t have proof of income, then you have no income”

AUGUSTA – An outside investigation into Maine’s Medicaid system reveals a shocking potential for fraud within Maine’s vast welfare bureaucracy, and it’s all on video. Yet policy reforms to increase accountability and safeguard measures will help protect Maine’s welfare system from fraud, if officials act soon.

The Maine Heritage Policy Center (MHPC) and Americans for Prosperity-Maine (AFP) held a joint press conference in Augusta today, where the groups showed footage from a video-recorded interaction earlier this year between a Department of Health and Human Services employee at the Biddeford office, and an individual posing as a “pharmaceutical” importer seeking free, taxpayer-funded Medicaid health coverage.

The individual, who posed as a Mr. Ted Ceanneidigh, revealed the following to the DHHS worker:

He has access to enough money to buy private health insurance
He drives a Corvette
His parent are unaware he has turned their failing fishing business into a “pharmaceutical imports” business that does its dealings in international waters
His business card prominently features a marijuana leaf
His income is strictly in cash and precious metals, because metals are “less traceable.”
He has no pay stubs and none of his income is declared

After learning this information, the DHHS employee advised the individual to keep his income hidden.

“You don’t have a paycheck, you don’t file taxes, you have no income,” the employee said.

Applicants for Medicaid must earn below a certain level of income to qualify for the free taxpayer-funded health coverage.

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“How many Ted Ceanneidighs out there were advised by DHHS workers to hide their income? How many were never reported for suspected drug dealing? How many Ted Ceanneidighs are receiving taxpayer-funded health care today because of unethical practices within Maine’s welfare bureaucracy?” AFP-Maine State Director Carol Weston asked at the press conference.

The explosive details in the video demonstrate the vulnerability of the welfare system to fraud and abuse, which may contribute to the growth in enrollment and cost for Maine’s welfare programs. Today, almost one in three Mainers is on some form of welfare, and the state spent more than $2.5 billion on its welfare system in 2008 alone.

“Maine spends billions on its welfare system. Is this potentially illegal behavior what those billions are funding?” Weston asked.

Prior to the press conference, Weston and MHPC chief executive officer Lance Dutson met with the Commissioner of Health and Human Services and staff from the Governor’s office to show them the video, and to discuss potential reforms to safeguard Maine’s welfare system from fraud and abuse.

MHPC has specifically suggested the creation of a divergence program that helps potential applicants find work or job training while making welfare benefits a last resort, establishing a Secret Shopper-type program to monitor the performance and practices of DHHS employees, and lifetime bans from receiving benefits and working in state government for applicants and employees, respectively, who are found to have knowingly engaged in fraudulent or illegal behavior.

“I hope that what we have revealed today motivates action from officials in all branches of our government. Our system is clearly vulnerable to fraud and abuse, and we can no longer pretend these things only happen in other states,” Dutson said.

“I have shared our reform ideas with the Commissioner of Health and Human Services and members of the Governor’s staff at our meeting this morning,” Dutson continued. “I have also pledged the full support of The Maine Heritage Policy Center to develop and promote welfare system reforms that root out fraud, waste and abuse, while preserving our safety net for those in need. Action must be taken.”

CLICK HERE to watch the footage shown at today’s press conference at

CLICK HERE to watch the complete, 48 minute video.

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