AUSTIN, Texas — At least 240 Texas convicts had federal economic stimulus checks delivered to them at state prisons in a bureaucratic mix-up that federal and state authorities are investigating.
While prison officials intercepted most of the checks, nine convicts were allowed to cash the $250 checks and keep the money because they were eligible for the one-time payments to Americans receiving federal benefits such as Social Security, officials confirmed.
"We caught this because of the procedures we have in place," said John Moriarty, inspector general of the Texas Department of Criminal Justice, which runs the 154,000-convict, 112-prison system.
"We think we caught everything that shouldn't have gone through."
Approved by Congress in February, the American Recovery and Reinvestment Act allocated $13 billion so that anyone who received Social Security, Veterans Affairs or Railroad Retirement Board benefits between November 2008 and January 2009 got a one-time, $250 stimulus check.
Incarcerated convicts generally are ineligible to receive federal benefits checks, officials said.
But those who were eligible for the stimulus checks - those who were not in prison between November 2008 and January 2009 - could legally accept them, Social Security Administration officials said.
In Texas, 240 stimulus checks arrived at state prisons in May and June and were held until officials verified the prisoners were eligible to receive the money.
Of 214 Veterans Affairs checks received, all were sent back. Of 24 Social Security checks, seven were cashed, and the rest were returned. Of two Railroad Retirement checks that arrived, both were cashed, prison system spokesman Jason Clark said.
Wes Davis, a regional spokesman for the Social Security Administration in Dallas, said officials have determined that 3,900 stimulus checks went to people who were in prisons or jails across the nation, 2,200 of whom were eligible for the money and 1,700 of whom were not.
Checks issued to the ineligible inmates totaled $425,000.
"Our records were inaccurate. ... We didn't know they were incarcerated," Davis said, noting that federal officials rely on lists of inmates from correctional agencies. "Ideally, we want to be 100 percent accurate, but the information [names] did not get reported in time to make it into our system" before the payments went out.
George Penn, a spokesman for the Social Security Administration's inspector general in Washington, confirmed that an audit is under way to make sure no one pocketed money who should not have.
Front Section, Pages 3 on 08/27/2009