Recently in Social Security Fraud Category

Sevier County Police Officer Sentenced to 18 Months for Social Security Fraud

February 25, 2014, by The McKellar Law Firm, PLLC

Sevier County's first ever K-9 officer has been sentenced to 18 months in prison for defrauding the Social Security Administration ("SSA") by committing social security fraud.

Joseph Laney, Jr., age 57, left the Sevier County Sheriff's Office in 1989 after becoming its first K-9 officer. Two years after leaving, Laney filed for disability benefits citing "affective mood disorder" and epilepsy. He was approved and received benefits for the next twenty years to the tune of $319,000.


As a general rule when on disability benefits through SSA, one cannot do "substantial gainful activity" (SGA) and continue to receive these benefits. "SGA is defined as working and making more than $1,070 per month ($1800 per month if you are blind)." ( Laney was clearly in violation of this activity as he ran a martial arts school, was a dog trainer, taught carry permit classes, was a bounty hunter, authored a book, and was a private investigator. Laney received money for all of these ventures, but failed to report this income to SSA and/or failed to inform them of his ability to work.

Prior to handing down Laney's sentence, Judge Varlan of the United States District Court in Knoxville, Tennessee stated, "[i]n reflecting the seriousness of the offense, the court takes into consideration not only the loss amount, which the court finds significant, but the time frame (of) approximately 20 years."

East Tennessee Residents Charged with Copyright Infringement and Social Security Fraud

Last week, a federal grand jury in Greeneville, Tennessee, returned a five-count indictment against Tennessee residents Richard and Melissa Arnold of Hampton, Tennessee, Kristen Bailey of Erwin, Tennessee, and Reginald Garner of Johnson City, Tennessee, for conspiracy to infringe copyrights and conspiracy to traffic in counterfeit labels. Richard Arnold was also indicted for defrauding the Social Security Administration.


Criminal copyright infringement is primarily governed by 17 U.S.C. § 506, and counterfeit labels are addressed at 18 U.S.C. § 2318. Social Security Fraud is generally governed by 42 U.S.C. § 1383a and false statements related thereto are covered at 18 U.S.C. §1001(a).

The Indictment against these 4 defendants alleges that from in or about late 2004 or early 2005 to on or about May 24, 2010, two of the defendants made copies of copyrighted motion pictures and of the labels for said copyrighted motion pictures. These same two defendants would sell copies of copyrighted motion pictures and labels to various purchasers. Additionally, these two defendants would "front" copies of copyrighted motion pictures to the other two defendants,who would further distribute the movies to purchasers in exchange for money. The Indictment alleges that the copyrighted movies were obtained from a variety of sources, including rentals and internet downloads. Once obtained, the movies were burned on to DVD's and distributed to willing purchasers.

To make matters worse, one of the defendants, Richard Arnold, was charged with Social Security Fraud for allegedly defrauding the government out of nearly $60,000 in Social Security Disability Insurance ("SSDI") benefits, and making false statements related to same. Specifically, Mr. Arnold is accused of willfully making a false statement and
representation of material fact for use by the Social Security Administration in determining rights to SSDI payments. The Indictment alleges that via a letter in response to a request from SSA for completion of a Work Activity Report (SSA Form 820-F4), received by SSA on April 21, 2010, Mr. Arnold falsely stated "Have not worked since 2000," when in truth and in fact, the prosecution now claims that he had worked since at least late 2004 or early 2005 in the reproduction and distribution of copies of copyrighted material.