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Crime & Courts

When PFDs grow, the number of Alaskans reporting PFD fraud grows too

  • Author: Jerzy Shedlock
  • Updated: September 30, 2016
  • Published January 31, 2016

When two of the stars of the Discovery Channel's "Alaskan Bush People" were sentenced to jail time in January for lying on Permanent Fund dividend applications, they were just one example of the hundreds or even thousands of cases of suspected PFD fraud reported every year to the Department of Revenue's Criminal Division.

In the past 10 years, investigators have received in excess of 1,500 tips a year reporting cases of possible PFD fraud. The number of tips received, people fined and amount of money recovered has fluctuated year to year, but the peaks and valleys aren't random, said investigator Shawn Stendevad.

"Various numbers change based on dividend amount, amount of press in a given year, investigator turnover, policy changes, etc." said Stendevad, PFD investigations supervisor.

The patriarch of the Brown family and one of his sons, who star in the reality TV series, were each sentenced in January to 30 days in jail for lying on their PFD applications. Billy Brown, the 63-year-old father, was ordered to return $7,956 in improperly obtained dividends and pay a $10,000 fine. Joshua Brown must pay back $1,174 in dividends and pay a $2,000 fine.

Another high-profile, still-active case accuses former Alaska Board of Fisheries appointee Roland Maw of illegally collecting $7,422 in dividends between 2009 and 2014. Charging documents say he didn't disclose leaving Alaska for more than three months during each of those years.

All told, 20 PFD fraud cases were forwarded for prosecution in 2015. Eleven of those cases resulted in convictions, which garnered $108,705 in recovered funds. That's the third-largest criminal recovery over a 10-year period. The largest came in 2013, when 16 convictions netted $188,233.

The large sums of recovered money are a function of the higher value of PFDs in the previous three years, Stendevad said. The amount of the recovered funds is something investigators don't have a lot of control over. All cases are looked into regardless of dollar amount, she said.

The majority of substantiated PFD fraud tips result in administrative resolutions, which typically involves PFD investigators contacting individuals and collecting fines "internally" without going to court, Stendevad said.

The penalties include repayment of any improperly received dividends, a $3,000 fine and ineligibility to apply for a dividend for five years.

Since 2011, $1.6 million has been recovered through administrative resolutions. More than half of that amount was collected in 2014 and 2015, according to the data. The PFD payout jumped to $1,884 in 2014, then $2,072 in 2015, after two straight years of sub-$1,000 dividends.

In 2008 and 2009, $1.7 million and $1.6 million were recovered in administrative resolutions, respectively. Stendevad attributes the increase in recovered funds, as well as in the number of tips received, to a large payout in 2008, when the dividend totaled $2,069 and then-Gov. Sarah Palin's $1,200 resource rebate fattened Alaskans' pockets more than any payout before or since.

Stendevad said her investigators determine the facts and never make deals for repayment in lieu of prosecution.

"When we contact people, it is for the purpose of hearing what they have to say and getting their side of the story so that can be considered as a factor in the decision whether to resolve a matter administratively or file charges," she said. "If someone wants to repay the money, they are welcome to arrange that with the PFD Division, and it may be considered in the outcome of the case, but it does not change the fact that a crime was committed and won't necessarily stop prosecution."

The data shows a total of 11,232 fraud tips were received since 2004, but many are determined to be unfounded each year. More cases are then cleared after investigation.

Still, hundreds of the tips turn up criminal fraud. Every tip is treated from the outset as a potential criminal case, Stendevad said.

So how do some cases end up in a courtroom? Many factors go into the decision -- the type of behavior, or how the fraud was carried out; the length of time the fraud was going on; and other factors that might exacerbate or lessen the severity of the offenses. Ultimately, it is up to a state prosecutor whether the case is charged.

Stendevad said her office strives to maintain consistency, so two people who have engaged in similar behavior receive the same treatment.

The majority of prosecuted cases are settled through plea agreements. Out of 43 cases prosecuted in the past three years, just two have gone to trial, Assistant Attorney General Lisa Kelley said. Court records show both defendants were found guilty of multiple charges. In the case of the Browns, their sentences came as the result of plea agreements.

Generally, the perpetrators are people who have never lived in Alaska and former residents trying to get checks. Instances of people illegally claiming U.S. citizenship are rare, but they do occur.

In early January, the state charged Manuel Soto-Naranjo with 27 criminal counts, including fraud, theft, and unsworn falsification. He is accused of receiving dividends totaling $33,577 from 1989 through 2014 despite never having a legal resident status in the U.S., prosecutors say.

Whether the state will recover the cash in that case remains unclear.

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