ASBURY PARK, N.J. — New Jersey officials on Tuesday announced the number of residents who took advantage of a controversial prosecution amnesty program offered in the wake of last year's welfare fraud arrests.
The controversial amnesty offer was made after 26 Lakewood, N.J., residents were arrested last summer on welfare fraud charges. Ocean County, N.J., prosecutors say those people — 13 married couples — stole benefits worth a total of more than $2 million that they did not qualify for by under-reporting their incomes.
On Tuesday, state officials said 159 people took advantage of the amnesty program.
Those individuals are expected to repay a total of about $2.2 million — an average of $13,800 each — in Medicaid benefits they wrongly received, according to the Office of the State Comptroller.
The deadline to apply for the amnesty program was Dec. 12, and Tuesday was the first time results were released publicly. The announcement revived debate over the fairness of the program.
Comptroller staffers have been working to finalize settlement agreements with the individuals, each of whom had to agree to repay within six months any inappropriately received benefits plus a fine, according to the terms of the program.
"Over the course of the next several months, as defined by the terms of the agreements, (the comptroller) will track and collect the outstanding payments. Assuming the 159 participants meet the terms memorialized in each of the agreements, (the comptroller's office) will recover approximately $2.2 million, which will be returned to the state Medicaid program," a statement in the office's biannual Medicaid fraud report reads.
The cases against most of those couples are pending indictment before an Ocean County grand jury; four cases are pending in federal court. Many of the defendants charged in Ocean County have indicated they will apply for pretrial intervention, a program available to first-time offenders that can allow defendants to avoid permanent convictions.
Controversy over a special deal
After the arrests, which rocked the community and prompted more than 1,000 residents to turn out for an informational session on welfare eligibility, Comptroller Philip James Degnan announced the amnesty program.
He cited limited staff resources to investigate and prosecute any additional cases, acknowledging the program was unique and a response to what appeared to be a "larger problem" in Ocean County than in other New Jersey counties.
Online commentators and media speculated the amnesty program was instead favorable treatment for Lakewood's large population of Orthodox Jews. "Will this happen in a predominantly black town in New Jersey as well, or nah? Asking for black people everywhere," Monique Judge wrote in the online culture magazine The Root.
Pastor Glenn Wilson, whose church in Howell, N.J., has a congregation of largely black and Latino worshipers who come from neighboring Lakewood, said he did not know anyone who applied for the amnesty program.
“I am always in favor of forgiveness, but we have to be careful that we’re extending the same favor to the other groups that may commit similar crimes,” he said Tuesday.
Lakewood was the fastest-growing town in New Jersey and surpassed 100,000 residents in 2017, according to the Census Bureau. In the town, 32% of people live in poverty, Census figures show. Lakewood's rapid population growth is fueled by a flourishing Orthodox Jewish community.
A single community group was consulted before the amnesty offer: The Lakewood Vaad, a council of businessmen and rabbis that advocate for some members of the Orthodox Jewish community.
The Vaad has previously praised the program, saying it carried harsh penalties and noting that potentially large amounts of money could be recouped by taxpayers. Rabbi Moshe Zev Weisberg, who acts as a spokesman for the Vaad (which means council in Hebrew), said informational sessions meant to help families navigate federal regulations will continue.
"We are glad that (the) program was successful and that Ocean County residents who were caught up in this unfortunate situation were given the opportunity to put this behind them," Weisberg said Tuesday. "This program, while receiving much controversial press coverage, is very much in line philosophically with ‘second-chance’ opportunities routinely available throughout in the justice system."
Social service programs provide a crucial safety net to families but bring a tangle of regulations that can be challenging to understand, he said.
"We continue to remind participants that these programs have strict eligibility criteria and that applications must be completed with great care to assure that all information provided is accurate and complete," he said.
Small number of participants
The amnesty program allowed welfare recipients to come forward, repay benefits plus a fine and avoid criminal prosecution. Participants also are prohibited from receiving Medicaid benefits for one year.
The program had a three-month window to apply and was open to all Ocean County residents, about 586,000 people, according to the latest U.S. Census population estimates. Lakewood is the largest township in the county.
It is unclear whether more residents applied for the program, and the demographics of the group of 159 that did participate was not released. Limited information was released by state officials who cited confidentiality of welfare records.
Degnan, a 2015 appointee of former governor Chris Christie, declined through comptroller spokesman Jeff Lamm to be interviewed Tuesday. His office's Medicaid fraud division, which is tasked with audits and investigations to ensure Medicaid, FamilyCare and Charity Care program funds are spent appropriately, opened 579 cases on a suspicion of inappropriate spending in the last full fiscal year.
The division received more than 2,436 fraud tips that year, according to the comptroller's annual report.
Contributing: Payton Guion, Asbury Park (N.J.) Press. Follow Stacey Barchenger on Twitter: @sbarchenger