Minnesota Couple Pleads Guilty to Providing False Information to Receive Social Security Benefits, Mail Fraud, and Passport Fraud

MINNEAPOLIS—Today in federal court, a North Oaks couple pleaded guilty to mail fraud, health care fraud, and theft of public money. James N. Hood, age 69, and Cynthia Marsalis Hood, age 55, of North Oaks, both pleaded guilty to one count of mail fraud. James Hood also pleaded guilty to one count of health care fraud and one count of theft of public money. Cynthia Hood also pleaded guilty to one count of false statement for use in determining rights to Social Security Benefit. The couple was charged on October 1, 2012. They entered their pleas before United States District Judge Joan N. Ericksen.

In their plea agreements, the couple admitted that they provided false information to the government regarding their income when applying for benefits on behalf of their disabled children. Following Hurricane Katrina in 2005, the Hood family visited several states and eventually decided that Minnesota provided a high quality of life and the best health care and educational resources for their children. Soon after their arrival, they applied for benefits on behalf of their children, including Medical Assistance (“MA”), Minnesota’s Medicaid program.

Eligibility for certain benefits is based on the applicant’s disability and, for children, based on the child’s and parents’ income and resources. For such Medicaid benefits, a parental contribution is determined by the parents’ income. James Hood prepared incomplete and false

tax forms that Cynthia Hood signed without challenging the truthfulness of the Form 1040s prepared by her husband. The couple continued to submit false information in their written applications and during in-person interviews for benefits. James Hood purposefully provided false information to defraud the government to receive benefits for his children without paying the correct parental contribution. At no time was he truthful in reporting his income for any benefits received. He never accurately reported his interest income.

For example, he had at least 33 bank accounts in 2007. The interest income was at least $117,000. However, Hood only disclosed $84,922.32 in 2007 interest income to the Minnesota Department of Human Services. He didn’t disclose any interest income to Ramsey County Community Human Services (“CHS”). At no time between January 2006 and April 2011 did he disclose stock holdings, including dividend income. In 2007, his dividend income from stock holdings totaled at least $156,000. James Hood also had farm subsidies, farm income, and significant gifts from family trusts that he did not disclose.

From January 2006 to April 2011, James Hood stole approximately $369,061.91 in state and federal Medicaid money, namely MA benefits to his children, which he knew he was not entitled to have.

On November 16, 2010, Cynthia Hood made false statements to the Social Security Administration (“SSA”) in St. Paul. When providing information to support her children’s continued eligibility for Supplemental Security Income (“SSI”), Cynthia Hood stated that her household consisted of her children and that her husband lived in Iowa. In truth, Cynthia Hood knew that her husband was living with her and financially supporting the household.

On February 27, 2006, Cynthia Hood stated that her husband lived in Louisiana. She untruthfully reported that she did not own any homes, vehicles, stocks, bonds, or property. She also reported that she only had one bank account with a balance of $1,400. In fact, Cynthia Hood held at least 16 bank accounts jointly with James Hood, which she did not disclose to SSA. In total, Cynthia and James Hood defrauded the SSA out of $80,044.

For his offenses, James Hood faces a potential maximum penalty of ten years in prison for theft of public money and ten years for health care fraud. Cynthia Hood faces a potential maximum penalty of five years in prison for false statement for use in determining rights to Social Security Benefit. They both face a potential maximum penalty of 20 years in prison for mail fraud, as well as possible fines and forfeitures. Judge Ericksen will determine their sentences at future hearings, not yet scheduled.

This case is the result of an investigation by the SSA’s Office of Inspector General, the U.S. Department of Health and Human Services’ Office of Inspector General, the Minnesota Department of Human Services’ Office of Inspector General, and the Office of the Ramsey County Attorney. It is being prosecuted by Assistant U.S. Attorney Laura M. Provinzino.MINNEAPOLIS—Today in federal court, a North Oaks couple pleaded guilty to mail fraud, health care fraud, and theft of public money. James N. Hood, age 69, and Cynthia Marsalis Hood, age 55, of North Oaks, both pleaded guilty to one count of mail fraud. James Hood also pleaded guilty to one count of health care fraud and one count of theft of public money. Cynthia Hood also pleaded guilty to one count of false statement for use in determining rights to Social Security Benefit. The couple was charged on October 1, 2012. They entered their pleas before United States District Judge Joan N. Ericksen.

In their plea agreements, the couple admitted that they provided false information to the government regarding their income when applying for benefits on behalf of their disabled children. Following Hurricane Katrina in 2005, the Hood family visited several states and eventually decided that Minnesota provided a high quality of life and the best health care and educational resources for their children. Soon after their arrival, they applied for benefits on behalf of their children, including Medical Assistance (“MA”), Minnesota’s Medicaid program.

Eligibility for certain benefits is based on the applicant’s disability and, for children, based on the child’s and parents’ income and resources. For such Medicaid benefits, a parental contribution is determined by the parents’ income. James Hood prepared incomplete and false

tax forms that Cynthia Hood signed without challenging the truthfulness of the Form 1040s prepared by her husband. The couple continued to submit false information in their written applications and during in-person interviews for benefits. James Hood purposefully provided false information to defraud the government to receive benefits for his children without paying the correct parental contribution. At no time was he truthful in reporting his income for any benefits received. He never accurately reported his interest income.

For example, he had at least 33 bank accounts in 2007. The interest income was at least $117,000. However, Hood only disclosed $84,922.32 in 2007 interest income to the Minnesota Department of Human Services. He didn’t disclose any interest income to Ramsey County Community Human Services (“CHS”). At no time between January 2006 and April 2011 did he disclose stock holdings, including dividend income. In 2007, his dividend income from stock holdings totaled at least $156,000. James Hood also had farm subsidies, farm income, and significant gifts from family trusts that he did not disclose.

From January 2006 to April 2011, James Hood stole approximately $369,061.91 in state and federal Medicaid money, namely MA benefits to his children, which he knew he was not entitled to have.

On November 16, 2010, Cynthia Hood made false statements to the Social Security Administration (“SSA”) in St. Paul. When providing information to support her children’s continued eligibility for Supplemental Security Income (“SSI”), Cynthia Hood stated that her household consisted of her children and that her husband lived in Iowa. In truth, Cynthia Hood knew that her husband was living with her and financially supporting the household.

On February 27, 2006, Cynthia Hood stated that her husband lived in Louisiana. She untruthfully reported that she did not own any homes, vehicles, stocks, bonds, or property. She also reported that she only had one bank account with a balance of $1,400. In fact, Cynthia Hood held at least 16 bank accounts jointly with James Hood, which she did not disclose to SSA. In total, Cynthia and James Hood defrauded the SSA out of $80,044.

For his offenses, James Hood faces a potential maximum penalty of ten years in prison for theft of public money and ten years for health care fraud. Cynthia Hood faces a potential maximum penalty of five years in prison for false statement for use in determining rights to Social Security Benefit. They both face a potential maximum penalty of 20 years in prison for mail fraud, as well as possible fines and forfeitures. Judge Ericksen will determine their sentences at future hearings, not yet scheduled.

This case is the result of an investigation by the SSA’s Office of Inspector General, the U.S. Department of Health and Human Services’ Office of Inspector General, the Minnesota Department of Human Services’ Office of Inspector General, and the Office of the Ramsey County Attorney. It is being prosecuted by Assistant U.S. Attorney Laura M. Provinzino.