BOSTON — A recent Massachusetts State Auditor report identifying $10.6 million in fraudulent public-benefit payments across the state over a six-month period is prompting criticism from a national fraud expert who says the state’s current prevention strategies are lacking.
According to figures from State Auditor Diana DiZoglio’s office, fraud more than doubled compared with the previous six-month period. The bulk of the fraudulent payouts was concentrated in two primary assistance programs: MassHealth (Medicaid) accounted for $6.05 million, while the Supplemental Nutrition Assistance Program (SNAP) accounted for $3.85 million.
Equally alarming to Haywood Talcove, CEO of LexisNexis Risk Solutions’ Government Group, is how little has been recovered.
To date, Massachusetts has finalized just $285,339 in recoveries. For every $100 identified as stolen, the state has clawed back roughly $2.69—a recovery rate of less than 3%. A spokesperson for Gov. Maura Healey’s administration said the recovery figure is incomplete and that federal law prohibits states from clawing back “Medicaid benefits from individual members.”
Talcove argues that the low recovery rate is the inevitable result of a flawed strategy known in law enforcement as “pay and chase.”
“Pay and chase doesn’t work,” Talcove said in an interview with investigative reporter Ted Daniel. “The money wasn’t stolen by people, Ted. The money was stolen by criminal organizations that don’t live in Boston...They live overseas. And what’s happening is they’re taking advantage of the state of Massachusetts and outdated processes and systems.”
Talcove, whose firm works with more than 9,000 government agencies nationwide, explained that international cybercriminals buy stolen personal data—names, dates of birth, and Social Security numbers—on the dark web and use it to submit fraudulent applications at scale.
Once the state issues the funds, the money is rapidly converted to cash, funneled through intermediary accounts or wired overseas before state investigators even realize fraud has occurred.
“The cost of getting it back is extremely expensive because you get law enforcement and then you get a prosecution,” Talcove noted, adding that by the time cases reach the audit stage, investigators are left chasing pennies while systemic vulnerabilities remain open.
Talcove warned that without stronger identity verification on the front end, new technology could soon make the problem significantly worse. Autonomous AI agents can now be programmed to complete and submit thousands of complex benefit applications automatically, he said.
“I could unleash a swarm of agents on the state of Massachusetts and steal at scale,” Talcove said. “And they likely would never know until I turn myself in.”
The Massachusetts Executive Office of Health and Human Services (EOHHS) strongly defended its security protocols, pushing back against the assertion that state benefit programs lack adequate front-end safeguards.
“The Massachusetts Executive Office of Health and Human Services takes any indication of fraud in MassHealth and Department of Transitional Assistance programs seriously,” an EOHHS spokesperson said in a statement. “EOHHS agencies have robust systems in place to prevent, identify, and address fraud beginning the moment an individual applies for benefits. Our extensive anti-fraud activities include routinely verifying eligibility and requesting additional information when needed before benefits are issued.”
According to state officials:
SNAP Integrity: The Department of Transitional Assistance (DTA) maintains a dedicated Program Integrity division of more than 50 employees who use advanced data analytics, transaction monitoring and automated data matching. As required by federal law, applicants must verify their identity, Social Security numbers, Massachusetts residency and income sources before benefits are issued. State officials emphasize that SNAP fraud is rare, with more than 99% of disbursed benefits reaching intended, verified recipients.
EBT Safeguards: Massachusetts recently became just the third state in the nation to issue chip-enabled EBT cards to prevent card-cloning and skimming scams.
MassHealth Overpayments: State officials noted that the $285,339 recovery figure from the Auditor’s Special Investigations Unit is incomplete and does not capture the state’s total fraud-prevention efforts or administrative recoveries across all agencies, including cases handled by the Attorney General’s Medicaid Fraud Division. Officials also pointed out that a significant portion of flagged MassHealth overpayments stems from administrative errors for which federal law explicitly prohibits states from recouping funds directly from individual beneficiaries.
25 Investigates shared the statement and data provided by the Healey administration with Talcove. Talcove responded, in part, “Massachusetts’s own materials report a federal FY2024 SNAP Payment Error Rate of 14.1%. To be clear, a payment error is not synonymous with fraud. The federal measure includes both overpayments and underpayments resulting from agency and recipient errors. But a 14.1% payment error rate is nevertheless difficult to reconcile with an implication that the program is operating at greater than 99% accuracy.”
This is a developing story. Check back for updates as more information becomes available.
Download the FREE Boston 25 News app for breaking news alerts.
Follow Boston 25 News on Facebook and Twitter. | Watch Boston 25 News NOW