Flagrant fraud in Social Security Disability

Twice a year, Social Security's inspector general reports to Congress on some of the agency's most intriguing fraud investigations. Few of the cases, however, stand out quite like U.S. v. Denise M. "Dee" Henderson.

The Minnesota mom was awarded Social Security disability benefits in February 1999 after she complained that a car wreck left her unable to walk for longer than 10 minutes and that lifting a gallon of milk gave her migraine headaches.

A month later, records show, Henderson won the Mrs. Minnesota International pageant after taking part in an evening gown competition and an aerobic wear fashion show. In 2004, a jury found Henderson guilty of nine counts of defrauding Social Security. A judge sent her to prison.

Other highlight cases:

• An Oregon woman who got regular disability benefits for a bad back turned out to be a caretaker for three horses, rode in endurance events and competed in equestrian competitions during 2001. The agency halted her benefits.

• A pair of New Jersey business partners, claiming mental and physical conditions, got disability awards in 1990, then launched a restaurant specializing in gourmet soups. They reported sales of $700,000 from 1996 to 2000. The government sent them to prison and ordered them to pay restitution of $2.7 million.

• A Florida woman awarded disability benefits because she was legally blind renewed her driver's license in 2003. In January 2006, after getting two traffic tickets, she admitted her sight had improved. Social Security cut off her benefits and ordered her to repay $106,762.