Stimulus Checks Mistakenly Sent to 1,700 Inmates, Federal Agency Says

The federal government mistakenly sent out stimulus checks to 1,700 inmates, the Social Security Administration said Tuesday -- a $425,000 error.

Social Security spokesman Dan Moraski told in a written statement that the money went out because official records "did not accurately reflect that they were in prison."

The inspector general's office for the Social Security Administration is now looking into the problem as part of its broader audit on stimulus spending. The Social Security Administration acknowledged the glitch following a report that nearly two-dozen inmates in Massachusetts had wrongly received the $250 stimulus checks.

Even before the agency disclosed that the problem was more widespread, the discovery prompted complaints from Republicans critical of the $787 billion stimulus and the way it has been managed.

"It is unacceptable for convicts to be getting stimulus funds. It speaks to the lack of oversight and accountability to have such nonsense coming out of Washington. Where is the accountability?" House Minority Whip Eric Cantor said in a written statement.

Though it might strike taxpayers as unusual, some inmates were legally eligible for the stimulus checks.

Under the law, the $250 checks were supposed to be sent to those legally receiving benefits under the Social Security Administration, the Department of Veterans Affairs or the Railroad Retirement Board between November 2008 and January 2009.

So while inmates generally aren't eligible for Social Security benefits, those who were not incarcerated between November and January got the stimulus checks fair and square.

Moraski said a total of 3,900 inmates not receiving benefits were sent a stimulus check and that of those, 2,200 were due the payment because they were out of prison late last year. The other 1,700 were mistakenly sent the checks.

But Moraski said that the number was "relatively small" given the fact that 52 million total payments were made, and that most of the mistaken payments have been returned by the correctional institutions. He did not provide specifics for how much of the $425,000 had been returned.

The Boston Herald reported the administration is asking for the Massachusetts money back. But Diane Wiffin, a spokeswoman with the Massachusetts Department of Corrections, told that her department tried to alert the Social Security staff months ago when it first discovered that the checks had been sent to 23 inmates.

"It was the DOC's opinion that the inmates were not eligible for the payments because of their incarceration, and we withheld the checks from the inmates at that time and immediately contacted the federal Social Security Administration," she said in an e-mail.

But she said that the administration "failed to provide a directive despite several requests," so the department could no longer withhold the checks from the inmates.

George Penn, a spokesman for the Social Security Administration's inspector general, said his office is examining the issue and likely will fold the inquiry into part of its audit of stimulus spending.

"(In) our initial analysis, we found that there were some (recipients) that were in prison," Penn said.

It's unclear whether beneficiaries thought to be eligible under the Department of Veterans Affairs received the stimulus money mistakenly due to incarceration.

Steven Bartholow, general counsel with the Railroad Retirement Board, said inmates receiving railroad benefits easily could have received stimulus checks -- but that it would have been totally legal, since in almost all circumstances inmates are eligible for railroad retirement benefits.

"If there are any people like that then they would have received a stimulus payment," he said.

But he added: "It's a very, very small number."