Catching Social Security Disability Fraudsters in the Act

May 9, 2014— -- UPDATE: Since this story first aired on May 9, 2014, Cory Eglash was sentenced to 15 months in prison and three years of supervised release for committing disability fraud. He was also ordered to pay a $10,000 fine to the federal government.

The Social Security disability program is meant to be a lifeline for the severely disabled, but shameless con-artists are increasingly seeing it as a way to make easy money, thinking that no one is watching.

The Office of the Inspector General for Social Security says its investigations uncovered $340 million in savings for the government during the last fiscal year. Meanwhile, new applications for disability are on the rise as the U.S. population ages.

In Washington state, Special Agent Joe Rogers leads the state's "Cooperative Disability Investigations Program," a sort of a CSI unit of the OIG for sniffing out disability fraud. He said he and his team handle a minimum of ten to 12 cases a week, and they rely on surveillance footage and complex paper trails to catch people in the act.

Rogers and his agents recently busted Ramona Hayes, 42, and Cory Eglash, 52. The two of them ran a coffee shop in Friday Harbor, a beautiful tourist town in Washington's San Juan Islands. With the eye-catching name "Criminal Coffee" the two of them boasted their cafe was "The place to come when you're on the run."

But when Eglash filed for disability in 2012, a review of his application turned up the fact that he was working the coffee shop and that Hayes – who also worked in the coffee shop -- was already receiving disability payments.

"The uniqueness of this case shows that the system works," Rogers said. "We get an allegation on him. He's trying to get on social security and when we are looking at him we discover her already on."

In her application, Hayes had written she couldn't work due to "anxiety, severe depression and PTSD." Eglash is on-record in her application to support her claim, writing that her symptoms were so severe that he doubted she could work a part time job or even put gas in her car. The government was paying her more than $1,000 a month in disability based on her application and she ultimately received over $40,000 from Social Security before she was caught.

In his application, Eglash claimed to have difficulty "lifting, squatting, bending, standing, reaching, kneeling, stair climbing, seeing, memory, completing tasks, concentration, understanding, using hands, getting along with others."

But Rogers discovered records that showed Eglash not only worked at the café but had a second job at an aquarium, volunteered at a local senior center and played basketball with the local recreational league.

"He played basketball four days the same month he applied for disability," Rogers said. "We interviewed one of the people who played on the rec league with him [who] actually had complimentary things to say about his basketball abilities."

Investigators say Hayes and Eglash are a perfect example of what they face every day -- people trying to bilk social security out of tens of thousands of dollars, claiming to be disabled and eligible for benefits set aside for those truly in need.

Social Security Inspector General Patrick O'Carroll said these liars can steal millions from the government every year.

"People are brazen," he said. "There's an element that is going to look for any way to defraud the government and they will do it."