FOR IMMEDIATE RELEASE
Thursday, May 29, 2008
PENDELTON BERNARD MERRIAM PLEADS GUILTY IN U.S. FEDERAL COURT
Bill Mercer, United States Attorney for the District of Montana, announced today that during a federal court session in Helena on May 29, 2008, before Senior U.S. District Judge Charles C. Lovell, PENDELTON BERNARD MERRIAM, a 49-year-old resident of Three Forks, pled guilty to Social Security fraud. Sentencing is set for September 16, 2008. He is currently released on special conditions.
In an Offer of Proof filed by the United States, the government stated it would have proved at trial the following:
MERRIAM'S mother initially applied for Social Security Administration disability benefits on August 15, 1985. In November of 1988, her disability benefits automatically converted to retirement benefits. MERRIAM initially served as his mother's representative payee from September 1999 to January 2001.
From December 2001 to February 2003, Mrs. Merriam's other son served as her representative payee. On February 10, 2003, Mrs. Merriam again moved in with MERRIAM. MERRIAM again applied to receive Mrs. Merriam's monthly Social Security Administration benefit payments as her representative payee.
On February 10, 2003, MERRIAM made the following statements on his application to become Mrs. Merriam's representative payee:
I/my organization will: Use the payments for the claimant's current needs and save any currently unneeded benefits for future use;"
I/my organization: May be punished under Federal law by fine, imprisonment or both if I/my organization am/is found guilty of misuse of Social Security or SSI benefits."
MERRIAM signed the form with the above representations. Payments were originally made to Mrs. Merriam via paper checks. In January 2006, the SSA began depositing the benefits directly into an account with Manhattan State Bank in Manhattan. The account with Manhattan State Bank was opened in the names Mrs. Merriam and PENN B. MERRIAM, as Rep Payee.
On March 6, 2006, Mrs. Merriam moved into the Sunset Capital Apartments, an assisted living facility in Helena. MERRIAM continued to reside in Three Forks. Mrs. Merriam was charged $260 per month for rent and $260 per month for meals. The total charge of $520 per month was to be paid by MERRIAM from Mrs. Merriam's monthly SSA deposit of $954. Mrs. Merriam's only other bills were her monthly cable bill and the small amount of groceries she needed for her breakfasts which were not provided by the assisted living facility.
In November of 2006, the manager of the assisted living facility contacted MERRIAM informing him that his mother's health was declining. The manager phoned MERRIAM on November 30, 2006, and told him his mother was unable to remember where her apartment was and had problems controlling her bladder.
On December 2, 2006, the manager sent MERRIAM a letter to document his concern for Mrs. Merriam's health. In response, MERRIAM came to visit his mother in late January or early February. While visiting, MERRIAM gave his mother a bath and cut her hair because it had become matted.
On February 15, 2007, the manager was still concerned about Mrs. Merriam's well being and contacted Adult Protective Services (APS). APS inspected Mrs. Merriam's apartment that day and removed her from the residence on February 16, 2007. She was taken to the hospital for medical attention. The apartment was described as "messy" but the biggest issue was the urine. Mrs. Merriam's bed was soaked through and the floor had urine spots in several areas. Mrs. Merriam's chair was also soaked with urine.
After her removal, Mrs. Merriam was moved to a full service nursing facility. A social worker at the nursing facility was interviewed and said she became concerned about Mrs. Merriam's well being because she did not have spending money for her personal needs and some of her bills were not current. The social worker contacted the SSA office in Helena in an attempt to have Mrs. Merriam's representative payee changed. The social worker met with MERRIAM on February 23, 2007. During the meeting MERRIAM expressed that he was upset that Mrs. Merriam's payee was changing, that he was unemployed and did not know how he would pay his bills without his mother's monthly benefit check. He also stated he did not know how he would survive without his mother's check. MERRIAM stated that he would not be able to afford to drive to Helena to visit Mrs. Merriam.
Mrs. Merriam's representative payee was subsequently changed to APS. Since the representative payee changed, Mrs. Merriam's bills are current and she has extra money in an account at the care center for her personal needs.
A review of Mrs. Merriam's bank account was conducted. A special agent with the Office of Inspector General, Social Security Administration, discovered the following:
The account (xxxxxx4618) was opened on November 18, 2005, in the names Mrs. Merriam and Penn B. Merriam, Rep Payee;
PENN MERRIAM was the only person with signatory authority on the account;
Between March 3, 2006 and March 13, 2007, 18 deposits were made into the account totaling $12,694;
Of the deposits, 14 were made by SSA for Mrs. Merriam's monthly benefits totaling $12,503;
The remaining four deposits totaled $191 and consisted of three cash deposits and one telephonic transfer;
The ending account balance on March 16, 2007, was zero;
Between March 3, 2006, and March 13, 2007, 74 checks were written from the account totaling $9,927.87. In addition to the checks, $2,773.13 was withdrawn from the account through ATM transactions and overdraft charges;
Mrs. Merriam's nursing expenses or her cable bill;
MERRIAM for other purposes, including paying his property taxes, paying for tires for his vehicle, and various trips to bars and restaurants in Bozeman, Three Forks and Helena.
MERRIAM was interviewed by law enforcement on November 7, 2007. MERRIAM recalled signing the representative payee documentation. MERRIAM acknowledged that he knew he had certain responsibilities associated with his role of representative payee.
MERRIAM acknowledged that his mother's expenses were $520 per month to the assisted living facility, $40 for cable, and $50 to $100 for groceries. MERRIAM admitted that he used his mother's benefits for his own personal use. MERRIAM also admitted he has not had a full time job since 2002, and that his monthly expenses are approximately to $270 per month.
MERRIAM faces possible penalties of 5 years in prison, a $250,000 fine and 3 years supervised release.
Assistant U.S. Attorney Jessica T. Fehr prosecuted the case for the United States.
The investigation was conducted by the Inspector General's Office for the Social Security Administration.
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A copy of the Offer of Proof can be obtained by contacting Sally Frank at (406) 247-4638.
