What to Know
- New Jersey officials will offer a pilot amnesty program for people to admit improperly receiving Medicaid benefits
- The program follows the arrest of 26 people in Lakewood earlier this summer for welfare fraud
- Religious leaders are backing the program, which will let participants avoid prosecution
UPDATE: Welfare Fraud Amnesty Event Backfires
New Jersey officials have launched a piliot amnesty program for people to confess abuse of Medicaid benefits, after more than two dozen fraud arrests in the booming community of Lakewood.
The Office of the State Comptroller, Medicaid Fraud Division, said the program would start Tuesday and run for three months. Under the Ocean County Recipient Voluntary Disclosure Program, people would have to repay benefits they received while ineligible, plus a civil penalty.
They would also have to agree not to accept Medicaid for one year. But if they meet all the program requirements, the comptroller's office will not refer them for prosecution, and the Ocean County Prosecutor's Office said it will not pursue charges.
For now the program is open only to residents of Ocean County who have received Medicaid, have not settled already with the comptroller's office and are not already facing charges.
In late June and early July, state and federal authorities charged 26 people from the Ocean County town of Lakewood, including a prominent local rabbi and a special-needs school leader, with a laundry list of fraud counts.
At the heart of the charges is the allegation that they all, in one way or another, failed to report or otherwise concealed significant income that would have made them ineligible for the assistance programs in which they enrolled. In total, state and federal prosecutors have said the families collected more than $2.4 million in benefits.
The charges shook Lakewood, whose population tripled since 1980 as the Orthodox Jewish population there surged. The town is now one of New Jersey's largest as a result.
The Asbury Park Press has reported that hundreds of Lakewood residents contacted town officials after the arrests, seeking amnesty or guidance on whether they had broken the law.
The Lakewood Vaad -- a council of Orthodox religious leaders and businessmen -- supports the amnesty program, the paper said.
The Ocean County Prosecutor's Office, in a blog post Monday, pushed back against criticism of the amnesty and complaints it was not acting aggressively enough to pursue more fraud cases in the town.
"In terms of the Amnesty program that the NJ State Comptroller’s Office initiated: The amnesty program came from them. We have no authority to mandate or monitor how a state agency does business," the office said.