Ethical question about hiding money

To make a long story short, I know a woman whose minimum wage job is in danger. She has a CD worth about $30,000 which is all she has in the world besides an old car. She plans on taking out $9,000 at a time and putting it in a safe deposit box, then applying for government assistance. “Because you have to have absolutely nothing in order to get help, and the money in the safety deposit box is my emergency cushion until I get back on my feet. What could go wrong???” :smack:

I think this is fraud and if she was getting public assistance with hidden assets she would be getting free room, board, and medical in a heavily secured government facility if they caught her. She says she doesn’t care, “people do it all the time, and if anyone ever asked what happened to my money, I’d lie and say I blew it all at the casino.”

I don’t like the sound of this plan. I can understand how she feels, but this is fraud, isn’t it? Don’t they find out when people try to pull this stuff? And if you really went to apply for welfare and you said you lost all your money gambling, wouldn’t they smell a rat?


Q1: How can she do this without getting caught?
A: We really shouldn’t answer that.

Q2: Is this ethical?
A: That question has no definitive answer, at least in GQ.

Q3: Is this fraud?
A: Presumably lying on a welfare application breaks the law.

Q4: Might they find out?
A: Er, that sounds close to Q1.

Of course it’s fraud. She has 30 grand and is going to pretend that she doesn’t have a nickel to her name.

She’d be far better off learning what type of public assistance she could receive if her job goes away. First off, of course, there is unemployment insurance.

How did she get the $30K in the CD?

As for fraud, how so? In other words, what type of assistance is she looking to get? Does unemployment have a needs test? Genuine question, unemployment taxes (or fees) are paid, you become unemployed, what do assets have to do with benefits?

Unless your friend has kids and isn’t married, all she’s gonna get is food stamps. That’s $200/month and now you have to work for food stamps in most states, by doing community service, attending GED classes or other training, so that isn’t even really free. You won’t get medicaid unless you’re pemenantly disabled. You won’t get rent assistance or any other kind of aid unless you have underaged children. And again you’re gonna have to prove to the welfare worker you can’t work or you’ll be required to perform some kind of “community service.” At least in Illinois

Just because she’s withdrawing $9,000 doesn’t mean she won’t be reported. The banks are REQUIRED to report $10,000 or more, but they can report ANY suspicious amount. Repeated withdrawals of large sums over a period of time are suspicious and can be reported.

I was a bank teller at one point and I had some customers come in an deposit or withdraw maybe $4000 to $8000 per transaction over a period of time. Maybe once every week or two. I got suspicious and looked at their account profile. The transaction history matched my suspicions, so I reported it, even though they never breached the $10,000 per transaction mandatory reporting threshold. Some FBI dude either came in or called me some time later and thanked me for reporting it because they busted those people for something or other, thanks to the reporting. FWIW.

One of the penalties is you permanently lose all rights to ever receive the assistance in the future no matter what else happens. This lady had better rethink doing her fraud scam.

Presumably medical care is the government assistance she wants. Certain medical care is free as long as you have zero assets.

I’d worry about the safe deposit box; won’t authorities know she has it? Best bet if she has relatives she trusts is to use the money to “repay loans they’ve made to her.”

Twenty years ago I’d have been the first to condemn the woman for fraud and unethical behavior. But fraud is the norm, and indeed the ideal in today’s America(*). Look at the trouble Presidents have had filling cabinet posts when those guilty of tax fraud are excluded.

(* - I don’t commit fraud and applaud the many millions of Americans who likewise do not. But the fact is that we are “suckers” and enormous wealth is being skimmed with impunity by fraudsters of various sorts, all laughing at us on their way to the bank.)

Is it fraud? Is it ethical? It is if she has to sign a paper disclosing her assets and she does not include ALL significant assets on the list. If the condition is that you have nothing to get help, and you have $30K, then it’s not ethical, legal or not. The question of whether it’s ethical for example to make someone blow $30,000 on a cruise around the world before they can come home to collect welfare or get the $100,000 operation they need- different debate.

Will she get caught? Depends. She’s dumb enough to discuss it… with you, who else? People with a conscience or an axe to grind are not above making anonymous tips.

She can make the cash transactions. $10,000 is the nominal limit, but IIRC the real limit is different each day to catch people playing this game. The banks have to report suspicious transactions, in case its OMG Terrorists(!) so any odd pattern could be noticed. Simpler to take out $3,000 a month or so, take a few weekend trips to Vegas/Atlantic City, keep hotel and gas receipts, and claim to have lost it on the slots - and DON"T TELL EVEN YOUR FRIENDS. I read once where Treasury has a program to track all $100 bills by serial #, so if you say you spent the money in Vegas, they will know if most of the bills eventually turned up at a casino or bank there - or not. So you would have to find someone to change the bills outside of a bank… But then, Treasury is not into investigating welfare fraud. SOunds like a fun thriller novel in the making.

After all, the cash transaction thing interests the feds but only if the money is used for nefarious purpoes; and not likely to be available for the local government to find out about, and withdrawing your money in cash is odd but legal.

Not sure how easy it is for a welfare department to find a safe deposit box, and even if they did - keep your passport and other significant documents in there. They need a reason (like anonymous tip) to get a warrant to search it.

Will she get caught? There’s only one way to find out… All she has to do is make one mistake.

The friend doesn’t need all this cloak and dagger stuff. She should go down to the welfare office (or whatever agency is handling this stuff) and say “I have $30,000 in a CD. I’d like to protect my assets, but I need government assistance. What should I do?”

The answer she gets may be as simple as “Give the money to someone else, then reapply next year.” I know that’s more or less how it works for Medicaid assistance (though they’re using a 5-year rule now to make it harder to give that money to kids to artificially meet the qualifications). Civil servants are quite helpful when it comes to showing people how to qualify for benefits. Your friend doesn’t need to cheat - they just need to understand how to use the rules to their advantage.

One of the questions she needs to ask is related to retirement accounts. Frequently, government programs do not take IRA and 401k accounts into consideration when looking at assets for need-based programs. She may lose some flexibility in her access to the money, but she can keep it.

Finally… let’s not forget that cash sitting in a box loses value every day. At just 3% inflation, she’s losing $1,000 a year.

I talked to her today and told her what you all said. (I doubt she’s going to go through with her mad plan because she IS an honest person, was just entertaining the idea out of panic over a messed up situation.) That $30,000 put into a safety deposit box isn’t going to last her 2 years, and she is going to have to man up and start looking for another, better job… You know what the problem is? I’ve heard this over and over, I’ve heard it from my own mother. When someone is in need but is turned down for a handout, they always say, “well, what about so-and-so? THEY get help with their rent. THEY get food stamps. THEY take taxis everywhere at no cost and THEY get medical. What about me, why can’t I get the same things?” :mad: It’s always somebody else who wins the welfare jackpot. Well, either they do qualify, or they’re great at working the system.

Not to mention the interest (yes, I know that’s not much usually) the money could be earning if in the bank. Or she could invest some of it.

Nobody really knows another person’s situation and the reason that person qualifies for the government financial assistance. And there are also people who could qualify but refuse to apply.

That is Structuring, and it’s a pretty serious Federal crime.

And, what Aid is she thinking about getting? In CA, for example, that cash would not prevent you from getting Unemployment. ianal.

For people with no kids, there’s not much other Aid available, I mean there’s food stamps, but that’s pretty small potatoes.

I seem to recall having to supply my elderly father’s financial records for the previous 2 years to qualify him for medicaid when he was ill. It has been a while, though.

Is her plan a long term one, by any chance?

You can collect unemployment even if you have money in the bank.

Yep. I had an employee years ago who quit. She then took a job bar-tending, and was being paid “under the table”. She decided that her tax-free part-time income wasn’t enough, so she applied for unemployment compensation.

Then, she came back to my business and bragged to her ex-co-workers about what she was doing . They in turn came to me and told me. When I got the papers from UC, I filed a protest and presented the information I had.

The shit hit the fan, to put it mildly.

In my state, (IIRC) all they care about is whether you were seperated involuntarily from work, to get unemployment. I don’t have kids, was being fully supported by my boyfriend, and I’m sure they did not ask about any of that. The benefit amount depends on how much you were making.

Last time I looked at foodstamp forms, they asked if I had any other resources. Lying on the forms carries a fine of up to $2500 and permanent disqualification. There was also mention of jail time, but as that would actually cost taxpayer money, I don’t see it happening. The fine and permanent disqualification are very likely outcomes though.

Well, here’s an update: She took her CD out and paid a $30 penalty. She said it was just sitting there generating very little interest anyway. So she put the money into her bank account and plans on living on it while she is off work for the summer (she works part time for a school) and/or finds another job. (Well, I would hope she wouldn’t spend it all in three months!)

Now, she’s involved in a court case involving a $50 necklace she is accused of deliberately damaging and has been to the town hall to answer the charge. She asked for a court appointed lawyer, pleading poverty. (gonna fight this thing all the way to the supreme court!) So now she asks me, “I just put that CD money in my bank account yesterday. I asked for the the town lawyer last month because at the time I didn’t have enough to pay my own lawyer. So now, are they going to look at my bank account and see that now I DO have money and then bill me for a lawyer?” :rolleyes:

I told her I certainly didn’t know, I thought they needed a warrant to do that and would a $50 necklace be enough to look at your bank account??? I told her to pay the fine, or pay for the necklace, when she goes back next month, but she’s convinced the DA is going to get involved and there’s going to be a trial where she pleads NOT guilty. :rolleyes:

Sometimes I feel like starting a thread on this woman. She is actually a kind-hearted, decent soul, but she has SO many problems. She has come from a grossly dysfunctional family. She’s divorced, is estranged from her awful family, has little education, high anxiety, low self esteem. She’s the type who whips up drama over little things. It’s fascinating, though really sad, when she calls with yet another tale of how the world is against her. Never gets a break, there’s always something that comes up to make her life miserable. It’s like she’s been dealt bad tarot cards, cards that are upside down, The Tower, the Knight of Swords (I amateurishly dabble in tarot cards for entertainment purposes only). She’s…stuck in her life and can’t seem to make a move to get out of the dysfunction loop. My mom said long ago that she isn’t going to do anything about getting training or looking for a better job until she goes through her money - well, that time is not too far away!

There is a very real ethical problem here: If she has $30,000 in the bank, it is wholly unethical, and likely illegal, to force taxpayers to give her their hard-earned money.