January 14, 1996 in Nation/World

Welfare Ripped Off Big Time Recipients Owned Three Stores, Sent Kids To Private School

By The Spokesman-Review

A Spokane family owned three stores and sent its children to a private school while collecting welfare and tricking taxpayers out of $75,000 in public assistance.

For four years, Timothy M. Ward and Paula L. Gano operated their “Positively Tooney” retail shop in the Flour Mill near Riverfront Park.

Sales of Mickey Mouse and other cartoon character memorabilia were good enough to open similar shops in the Shadle Shopping Center and Walla Walla.

The young couple also found a way to send two of their four children to the Discovery School in downtown Spokane, which was charging $3,600 per student a year.

But state records reveal that during these same years, the couple lied or withheld information from the state 42 times, repeatedly telling welfare caseworkers that they had no income and nothing in the bank.

Gano and Ward pleaded guilty to welfare fraud, and await sentencing. Gano’s attorney said the couple didn’t understand the income-reporting rules.

The details of this fraud case surface as state legislators consider welfare reforms and hear the growing clamor to hammer the con artists who bilk a system designed to help the poor survive.

The Gano-Ward case is one of the more glaring, big-dollar examples of welfare fraud in the area, said Sheila Chase, who investigated the couple for the state Department of Social and Health Services.

Chase said she increasingly sees elaborate and daring fraud schemes. “They’re getting more and more creative.”

During the past two years, more than $2 million in stolen welfare has been documented in Eastern Washington alone.

State investigators are swamped with fraud tips from caseworkers and hotline callers. Spokane’s investigators have about 175 alleged fraud cases awaiting their scrutiny.

“The backlog is a growing problem,” said Jennifer Boharski, who oversees the state’s Office of Special Investigations.

Boharski said the office is trying to focus on bigger cases. “We’re investing our limited resources in the more sophisticated types of fraud.”

She noted that while fraud appears rampant, only a small fraction of recipients engage in it. “The majority of people on welfare don’t cheat,” she said.

Gano and Ward did.

The state received a tip and started examining the family in 1994.

State records show that in 1989, they went on welfare and Gano applied for a city business license, using a Social Security number that belongs to her daughter.

A week later, the couple signed a lease for space in the Flour Mill.

Although witnesses told the investigator that Gano and Ward worked full-time from 1989 to 1994, the state didn’t know about it.

Instead, for example, the couple didn’t mention their business venture when they spoke to a caseworker on Jan. 21, 1990. They said they were unemployed and had only $3 in their bank account.

“When it started, Paula (Gano) was under the impression she could earn a certain amount a month and that it wouldn’t be counted against her,” said her attorney, Lewis Wilson of Spokane. “Her feeling was if they had a net (profit) after expenses they’d have to report it. … I don’t blame the state for blowing up when they found out about it.”

State records indicate the couple’s income from their business exceeded $3,000 a month.

Starting in 1991, their two school-age children enrolled in Discovery School, a private school in downtown Spokane. The children continued to go there into 1994.

In all, Ward and Gano received $40,277 in welfare payments, $17,235 in medical bills and $18,333 in food stamps. They were not entitled to any of the $75,845 in assistance.

They pleaded guilty to welfare fraud last year and face up to 10 years in prison, although it appears the prosecution is primarily concerned with getting the money back.

The investigation also found that Gano’s mother, Ila Anderson, collected disability compensation at the same time she worked under the name Elena Villanueva as a nurse’s assistant for Kelly Assisted Living.

Anderson and her husband, Lloyd “Lucky” Allen, were listed as part owners of Positively Tooney, and are charged as accomplices to the welfare fraud. They deny the charges.

Although Anderson was employed for years, the Social Security Administration had been giving her $453 a month, and had no record of her working when the state investigator contacted the Spokane office on June 8, 1994.

Problems policing welfare fraud trigger periodic calls to increase the investigative staff.

State Rep. Mark Boldt, R-Vancouver, advocates giving the office more money and more gumshoes.

“The people who deserve welfare are getting hurt right now,” he said, “by the people that are fraudulently getting it.”

, DataTimes

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