State Comptroller Thomas P. DiNapoli and Preet Bharara, the United States Attorney for the Southern District of New York, announced today the arrest of JOSEPH GROSSMANN for fraudulently obtaining the pension of a deceased former New York State employee. The defendant was arrested and presented today in the District of South Carolina.
Manhattan U.S. Attorney Preet Bharara said: “As alleged, Joseph Grossmann methodically devised a scheme to steal a deceased New York State employee’s pension money. He allegedly lied, created fake documents, and deceived state officials to ensure he got his hands on money that didn’t belong to him. I want to thank New York State Comptroller Thomas DiNapoli for his work to bring Grossmann to account for this conduct.”
State Comptroller Thomas P. DiNapoli said: “Joseph Grossman allegedly tried to deceive officials that a deceased New York State employee was alive so he could pocket her retirement checks. Due to my office’s investigation and our partnership with United States Attorney Preet Bharara, Grossman’s acts were exposed and he now faces federal prosecution. My message to would-be pension scammers is this: we will find you no matter what state you are in and recoup what you steal from the retirement system. I thank U.S. Attorney Bharara for partnering with us in the fight against pension fraud.”
According to the Complaint unsealed today: *
From August 2010 until August 2015, GROSSMAN executed a fraud whereby he deceived the New York State and Local Employees’ Retirement System (“NYSLERS”) into believing that a deceased former employee of New York State (“Pensioner-1”) was alive and entitled to continued pension payments. GROSSMAN then defrauded NYSLERS into depositing the payments into a bank account under GROSSMAN’s control.
Upon her retirement from employment with New York State, Pensioner-1 began to receive pension payments from NYSLERS by electronic deposit or mailed check. Pensioner-1 received her first payment on February 1, 1999, in the amount of approximately $1,740. Starting on or about April 30, 1999, Pensioner-1 received a monthly pension payment by either mailed check or electronic deposit.
Pensioner-1 was reported deceased as of August 5, 2010. The death certificate filed with the Probate Court in Kenshaw County, South Carolina, lists her social security number, date of birth, and place of death, and GROSSMANN is listed as the “informant” of Pensioner-1’s death. On November 2, 2010, GROSSMANN filed an application for appointment with the same court, seeking to be named the personal representative of Pensioner-1’s estate. This application was approved on the same day.
Around the time of Pensioner-1’s death, NYSLERS learned of her death and attempted to verify that she was deceased and thus no longer eligible for pension payments. NYSLERS sent two letters to Pensioner-1’s last known address of record, and received a phone call in response, explaining that ‘Pensioner-1’ was going to respond to the letter and would provide paperwork showing that her ‘brother’ had been granted her power of attorney. On November 12, 2010, NYSLERS received a written response to its inquiry. Included in this response was a copy of the appointment application that GROSSMANN had filed with the probate court, which omitted the portions concerning anything related to the death of Pensioner-1. This response also included a direct deposit form, requesting that all future pension payments be remitted to an account opened by GROSSMANN on September 17, 2010 – approximately six weeks after Pensioner-1’s death. Since that time, approximately 61 pension payments totalling approximately $130,624.15 have been made by either check or wire.
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GROSSMANN, 67, of Camden, South Carolina, is charged with one count of conspiracy to commit wire fraud, which carries a maximum sentence of 20 years in prison. The maximum potential sentence in this case is prescribed by Congress and is provided here for informational purposes only, as any sentencing of the defendant will be determined by the judge.
Mr. Bharara praised the work of the New York State Comptroller’s Office. He also thanked the United States Marshal’s Service for its assistance in the arrest of the defendant.
This case is being handled by the Office’s General Crimes Unit. Assistant U.S. Attorney Jason A. Richman is in charge of the prosecution.
The allegations contained in the Complaint are merely accusations, and the defendant is presumed innocent unless and until proven guilty.
*As the introductory phrase signifies, the entirety of the text of the Complaint and the description of the Complaint set forth below constitute only allegations, and every fact described should be treated as an allegation.