Undercover Investigation into Disability Fraud

Investigators says people filing false disability claims are costing taxpayers billions.
7:30 | 05/12/14

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Transcript for Undercover Investigation into Disability Fraud
You're watching undercover video testing by federal agent Fred -- -- radar. It recouped more money and yeah. From a couple -- and facilities evil they couldn't work. Or in many cases even stand -- very long. -- As if daring someone to come and get them the targets owners -- Mona Haynes and -- eagle last. Virtually put a sign on themselves opening a coffee shop called. Criminal coffee complete with the slogan. -- -- come when you were on the run. The location one of the most out of the way quarters of the United States the gorgeous San Juan islands along the Indian border. Deep in the Pacific northwest. Are these two black. He was prisoners -- -- background. Neither one of the case treats it like it -- another now. The property manager had his own suspicions. But even he didn't know that the feds were investigating that to for a disability scam and that new customer Joseph Rogers. -- was actually part of an undercover team of agents. It. Camera -- -- where it right and you -- -- like money if you. I don't that's nonsense and it's our job. Investigators say -- -- laboratory or a perfect example of what he face every day. People trying to build Social Security out of tens of thousands of dollars. Claiming to be disabled and eligible for benefits set aside for those truly in need. People are brazen -- there's an element that's going to be looking for any way to defraud the government. In the -- they'll do it. Just look at some of the claims they've checked up on this man driving off on his motorcycle. Investigators -- he claimed he couldn't drive for re even -- alone. And the guy tossing the football he said he had shoulder problems and needed an electric car to run errands. This woman lifting the motorized wheelchair claimed she had difficulty with -- squatting and depending. All three had their claims deny. Every year's Social Security pays out more than 175. Billion dollars to people on disability. But in the last year alone nearly 72000. Allegations of fraud were reported to Social Security's office of the inspector general. When people that don't neither are abusing I think everybody becomes outraged a big bus stop some police and firefighters accused of massive fraud. The most egregious case in the last year allegedly happened in New York when more than a 130 people. Many of them police officers and -- and it worked on 9/11. Were indicted for allegedly conspiring to defraud the government out of 29 point nine million dollars. And these numbers don't even include other types of disability fraud like workman's comp. This woman Cathy cash -- was raking in three grand a month claiming a shoulder injury left her unable to stand run. Reach or -- But that didn't lower down on the price is right of all places -- spin that wheel. Last -- she pleaded guilty to fraud. But agency most cases are like criminal coffee which is why we joined Joseph Rogers. I'm -- float -- up to this and Juan islands. Believe -- cooperative disability investigations unit in Washington State sort of -- CSI unit for sniffing out disability. Broad -- the table your favorite spot -- over there Rogers and his fellow investigators posed as cellular phone company workers area. Water -- stopping -- during the course of their work days. Bail money over here there was there was -- -- yes right right there so we just recently -- out. It's pretty -- credible reporter yes it's normal behavior very friendly personable guy right tell his life story in Edinburgh. Hands he did several times. Yeah. Both were incredibly chatty and seemingly perfectly able but a far cry from their applications were disability payments whom she's written here cannot -- -- anxiety severe depression because these very days and I cannot leave my home -- will buy. -- -- on record in her obligation to support her claim but I doubt that today she could work in a retail store on and part time basis are actually broadcast car. And that's pretty extreme resentments and -- him but guess and it earned best brings -- -- She received just over 42000. Social security and in another 151000 -- in Washington -- bid to about 50000 dollars portal. -- Horry wasn't receiving disability. Yet. -- application is what helped set off the red flag that brought agents to their door these difficulties that. Sitting kneeling stair climbing seeing memory completing tasks concentration understanding using hands getting along with others. It's pretty inclusive. More than moving around the tapes reveal a pair who couldn't stop talking about themselves. I'd rather eroded that you Rebecca left the aircraft -- got hit you know those people who. You don't. Do not walk. Remember Ramona supposedly can't even put gas in a car let alone drive. As if the coffee shop wasn't enough investigators say Corey -- a full mile to this little building at the end of the pier -- -- -- second job at the aquarium. They found records that he volunteered at a local senior center and played basketball with the local rec league -- -- He played basketball. Four days the same month -- pipe disability did you ever notice that either one of them had you know pains are -- hard time getting around now ago there are prepared risk. They gave me your payment and -- and I would tell -- where the. When -- the customer finally showed his -- in the charges were filed. Ramona pleaded guilty to mail -- She's serving twelve months in federal prison about everything will be okay. -- -- very poor he went to trial where the jury quickly found him guilty of conspiracy to defraud the United States and mail fraud. We tried to talk to him all he's awaiting sentencing and finally for an appeal. But he was nowhere to be found and his lawyer along with -- -- declined to be interviewed. When help finally came out -- America through her her. As about the -- hurt her or her Iraq. Small pieces that out. 340. Million dollars and -- just last year. As for the con artists who might think no one is watching communities. -- on people right now should be the should be. -- Neal Karlinsky for Nightline in Friday harbor Washington. And.

This transcript has been automatically generated and may not be 100% accurate.

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