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Ex-Sebastian County officials get half-year in prison for Social Security fraud

by Thomas Saccente | June 28, 2022 at 6:52 a.m.
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FORT SMITH -- Two former members of the Sebastian County Quorum Court were sentenced Monday to six months in prison each for Social Security fraud.

Judge P.K. Holmes sentenced Rebekah Schwartz, 44, and Stephen Schwartz, 55, during the married couple's hearing in the U.S. District Court in Fort Smith. This will be followed by three years of supervised release with special conditions, which includes six months to be served under home detention.

Holmes also ordered the pair to pay $167,756 in restitution to the Social Security Administration. They cannot incur any new debt or establish any bank or credit accounts without the approval of the U.S. Probation Office until their financial penalties are paid in full, according to the special conditions of their supervised release. They have to make any information about their financial status available to their probation officer if requested.

Rebekah and Stephen Schwartz pleaded guilty in U.S. District Court to felony theft of government money and aiding and abetting the theft of government money, according to a news release from Arkansas Attorney General Leslie Rutledge's office March 7.

The maximum sentence was 10 years in prison.

The Schwartzes admitted to defrauding the Social Security Administration of $167,756 from June 2016 through July 2021 after investigators confronted them last year, according to court documents filed in U.S. District Court on March 2.

U.S. Attorney David Clay Fowlkes said in a news release Monday the Social Security Administration makes money available to people "truly in need" because of a disability.

"Our office will continue to pursue fraud cases such as this one and will continue to seek to protect programs like this, which are designed to help some of the most vulnerable members of our society."

Gail Ennis, inspector general for the Social Security Administration, said in the release the Schwartz's sentence shows his office will continue to hold people accountable for defrauding the administration's programs for personal gain.

Stephen Schwartz admitted he claimed to have a disabling condition that prevented him from working, although he had steady work. The scheme caused the Social Security Administration to pay Schwartz more than $167,000 he wasn't entitled to receive.

The Little Rock Cooperative Disability Investigations Unit of the Social Security Administration received a tip Schwartz was working and receiving disability benefits at the same time in November 2020, according to Rutledge's office.

Schwartz was employed with Liberty Roofing of Fort Smith from June to September in 2016 but had his paychecks issued under his wife's name to conceal he was working despite claiming a disability, the release states. The investigation also revealed he worked at a countertop business in Fort Smith from December 2016 to July 2017 until he and Rebekah Schwartz started their own business, Schwartz Quartz and Stone.

Rebekah Schwartz, a Republican, was elected to a two-year term on the Quorum Court as justice of the peace for District 12 in the general election Nov. 3, 2020, according to results from that election. She emailed her resignation from the Quorum Court effective immediately to County Judge David Hudson on March 9, with her fellow justices of the peace voting to officially declare her seat vacant March 15.

Michael Miller will serve out the remainder of Rebekah Schwartz's term.

Stephen Schwartz was sworn in for the same position following an appointment by Gov. Asa Hutchinson on Aug. 19, 2019, where he remained until his term expired in December 2020.

The Schwartzes were released from jail after their arrests on $5,000 bail each. They will be allowed to self-report to the Federal Bureau of Prisons on Aug. 24, according to court documents filed Monday.

Arkansas Justices of the Peace

Candidates for justice of the peace “must never have been convicted of embezzlement of public money, bribery, forgery, or other infamous crime” under Article 5, §9 of the Arkansas Constitution.

Source: The State Board for Elections Commissioners’ 2020 Handbook for Candidates


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