Lauro v. Commissioner of Social Security et al

Filing 55

MEMORANDUM-DECISION AND ORDER: The Court hereby ORDERS that the Commissioner's decision is AFFIRMED and this matter is DISMISSED; and the Court further ORDERS that the Clerk of the Court shall enter judgment and close this case; and the Court further ORDERS that the Clerk of the Court shall serve a copy of this Memorandum-Decision and Order on all parties in accordance with the Local Rules. Signed by U.S. District Judge Mae A. D'Agostino on 7/18/2017. (Copy served via regular and certified)(ban)

UNITED STATES DISTRICT COURT
NORTHERN DISTRICT OF NEW YORK
____________________________________________
UMBERTO LAURO,
Plaintiff,
vs.

6:12-cv-00912
(MAD)

COMMISSIONER OF SOCIAL SECURITY,
Defendant.
____________________________________________
APPEARANCES:

OF COUNSEL:

UMBERTO LAURO
P.O. Box 4514
Rome, New York 13442
Plaintiff, pro se
COMMISSIONER OF SOCIAL SECURITY
U.S. Social Security Administration
26 Federal Plaza
New York, New York 10019
Attorneys for Defendant

BENIL ABRAHAM, ESQ.

Mae A. D'Agostino, U.S. District Judge:
MEMORANDUM-DECISION AND ORDER
I. INTRODUCTION
On June 5, 2012, Plaintiff pro se Umberto Lauro commenced this action pursuant to 42
U.S.C. § 405(g) seeking review of an unfavorable decision made by the Commissioner of Social
Security ("Commissioner") that found Plaintiff at fault for causing a $690.00 overpayment in
Supplemental Security Income ("SSI"). See Dkt. No. 1. On February 5, 2013, the Court issued
an order reversing the Commissioner's decision and remanded the case for further administrative
action. See Dkt. No. 28. On November 20, 2014, Plaintiff filed a motion to reopen his case with
this Court. See Dkt. No. 29.

On February 23, 2015, this Court denied Plaintiff's motion to reopen his case because the
Commissioner had not issued a final decision. See Dkt. No. 36 at 3. On July 15, 2015,
administrative law judge ("ALJ") Robert E. Gale issued a partially favorable decision. See Dkt.
No. 51 at 154-62. On April 18, 2016, the Appeals Council denied Plaintiff's request for review.
See id. at 149-50. The Court now considers Plaintiff's brief for judicial review of the
Commissioner's decision, see Dkt. No. 46, and Defendant's brief in response. See Dkt. No. 48.
II. BACKGROUND
In September 2007, the Social Security Administration received an IRS alert of a 2006 W2G form with Plaintiff's name and New York State driver's license number. See Dkt. No. 43 at 9
and 71. The W-2G reported that Plaintiff won $1,963.22 from the Turning Stone Casino on
September 16, 2006. See id. Plaintiff's income increased as a result of the gambling winnings
and he received a notice on February 9, 2008 that stated he was overpaid $690.00 in SSI for
September 2006. See id. at 32-34. Plaintiff requested a waiver of recovery of the overpayment
and claimed that he never received $1,963.22 from Turning Stone Casino; instead, he alleged that
he was the victim of identity theft. See id. at 62-63. On September 15, 2008, Plaintiff's request
for a waiver of overpayment was denied. See id. at 38-39; Dkt. No. 53 at 6-7. On November 15,
2008, Plaintiff had a personal conference with Ms. Kraeger, a service representative for the Social
Security Administration. See id. at 40. After the conference, Plaintiff's request for a waiver of
recovery of overpayment was denied again. See id. at 41-42. Plaintiff then requested
reconsideration of the agency's determination, which was denied on January 8, 2009. See id. at
53; Dkt. No. 53 at 15. On January 21, 2009, Plaintiff requested a hearing in front of an
administrative law judge. See id. at 57.

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On February 27, 2009, Plaintiff received a notice stating "even though you are eligible for
Supplemental Security Income (SSI) payments, we will not pay you for June 2009 through
November 2009." Id. at 51. The non-payment of Plaintiff's SSI was a penalty for Plaintiff's
second failure to report his gambling winnings. See id. at 51-53. On March 17, 2009, Plaintiff
requested reconsideration of the penalty, claiming again that he was the victim of identity theft.
See id. at 54-56. On March 18, 2009, Plaintiff's reconsideration request was denied. See id. at
58-60. On March 20, 2009, Plaintiff requested a hearing before an administrative law judge
because "I feel that my payments are being stopped unfairly for 6 months and I feel that there is a
personal vendetta against me by the Rome SSA office (especially by Mr. Rejman)." Id. at 61
(errors in the original).
The request for a hearing was granted and on March 25, 2010, Plaintiff appeared before
ALJ Barry Ryan. See id. at 129-144. On May 5, 2010, ALJ Ryan issued an unfavorable decision.
See id. at 15-20. ALJ Ryan found "[t]he beneficiary was overpaid benefits and was not 'without
fault' in creation of the overpayment. Therefore, adjustment or recovery cannot be waived.
Furthermore, the six month administrative sanction was properly imposed for the time period of
June 2009 through November 2009." Id. at 20.
Plaintiff appealed ALJ Ryan's decision and on December 16, 2011, Administrative
Appeals Judge David A. Tepper granted Plaintiff's request for review. See Dkt. No. 43 at 125-28.
On April 14, 2012, the Appeals Council reviewed the ALJ's decision and issued a partially
favorable decision for Plaintiff. See id. at 5-7. In the decision, the Appeals Council adopted the
findings of the ALJ with the exception that the Administration "did not have the authority to
impose administrative sanctions for the period June 2009 through November 2009 due to the
claimant's statements regarding his gambling winnings." Id. at 10. On June 5, 2012, Plaintiff
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filed a civil action in this Court for judicial review of the Appeals Council's finding. See Dkt. No.
1.
On February 5, 2013, the Court remanded the case pursuant to sentence six of section
205(g) of the Social Security Act, based on a stipulation by the parties because the agency could
not locate Plaintiff's administrative file. See Dkt. No. 51 at 233-35. The Appeals Council
thereafter remanded the case to an ALJ for a de novo hearing on July 22, 2014. See id. at 302-05.
On July 15, 2015, ALJ Gale issued a partially favorable decision adopting the earlier
Appeals Council's decision. See Dkt. No. 51 at 154-62. Plaintiff requested review of ALJ Gale's
decision on August 5, 2015. See id. at 203-04. The Appeals Council denied Plaintiff's request,
which made ALJ Gale's ruling the Commissioner's final decision. See id. at 149-50. On June 6,
2016, this Court reopened Plaintiff's case. See Dkt. No. 44. Currently before the Court are
Plaintiff's brief requesting judicial review of the Commissioner's decision, see Dkt. No. 46, and
Defendant's brief in response, see Dkt. No. 48.
III. DISCUSSION
A.

Standard of Review
Under 42 U.S.C. § 405(g), a plaintiff may request review of "any final decision of the

Commissioner of Social Security made after a hearing to which he was a party" by a district
court. See 42 U.S.C. § 405(g). When a district court remands the case back to the Social Security
Commissioner, "such additional or modified findings of fact and decision shall be reviewable
only to the extent provided for review of the original findings of fact and decision." Id. "The
findings of the Commissioner of Social Security as to any fact, if supported by substantial
evidence, shall be conclusive." Id.

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The Court must examine the administrative transcript as a whole to determine whether the
decision is supported by substantial evidence and whether the correct legal standards were
applied. See Brault v. Soc. Sec. Admin., Com'r, 683 F.3d 443, 447 (2d Cir. 2012); Lamay v.
Comm'r of Soc. Sec., 562 F.3d 503, 507 (2d Cir. 2009); Schaal v. Apfel, 134 F.3d 496, 500-01 (2d
Cir. 1998). "A court may not affirm an ALJ's decision if it reasonably doubts whether the proper
legal standards were applied, even if it appears to be supported by substantial evidence."
Barringer v. Comm'r of Soc. Sec., 358 F. Supp. 2d 67, 72 (N.D.N.Y. 2005) (citing Johnson v.
Bowen, 817 F.2d 983, 986 (2d Cir. 1987)). The Second Circuit has explained that upholding a
determination based on the substantial evidence standard where the legal principals may have
been misapplied "creates an unacceptable risk that a claimant will be deprived of the right to have
her disability determination made according to the correct legal principles." Johnson, 817 F.2d at
986. However, if the record is such that the application of the correct legal principles "could lead
to only one conclusion, there is no need to require agency reconsideration." Id.
"'[S]ubstantial evidence' is 'more than a mere scintilla. It means such relevant evidence as
a reasonable mind might accept as adequate to support a conclusion.'" Selian v. Astrue, 708 F.3d
409, 417 (2d Cir. 2013) (quoting Richardson v. Perales, 402 U.S. 389, 401 (1971)). If supported
by substantial evidence, the Commissioner's factual determinations are conclusive, and the Court
is not permitted to substitute its analysis of the evidence. See Rutherford v. Schweiker, 685 F.2d
60, 62 (2d Cir. 1982) ("[The court] would be derelict in [its] duties if we simply paid lip service to
this rule, while shaping [the court's] holding to conform to our own interpretation of the
evidence"). In other words, this Court must afford the Commissioner's determination
considerable deference, and "'[t]he court may not substitute its own judgment for that of the
[Commissioner], even if it might justifiably have reached a different result upon a de novo
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review.'" Jones v. Sullivan, 949 F.2d 57, 59 (2d Cir. 1991) (quoting Valente v. Sec'y of Health &
Human Servs., 733 F.2d 1037, 1041 (2d Cir. 1984)). This very deferential standard of review
means that "once an ALJ finds facts, [the Court] can reject those facts 'only if a reasonable
factfinder would have to conclude otherwise.'" Brault, 683 F.3d at 448 (quoting Warren v.
Shalala, 29 F.3d 1287, 1290 (8th Cir. 1994)) (emphasis in original).
B.

Analysis
1. Overpayment
"In order to be eligible for SSI an individual must be aged, blind or disabled and have

income and 'countable resources' below specified statutory amounts.'" Singer v. Sec. of Health &
Human Servs., 566 F. Supp. 204, 206 (S.D.N.Y. 1983) (citing 42 U.S.C. § 1382(a)). In order to
be eligible to receive SSI benefits, an individual who lives with his or her spouse may possess no
more than $3,000 in resources (including the resources of the spouse), and an individual who does
not live with his or her spouse may possess no more than $2,000 in resources. See Rasheed v.
Astrue, No. 07–CV–2726 (NGG), 2010 WL 3036795, *3 (E.D.N.Y. July 30, 2010); 42 U.S.C. §
1382(a)(3); 20 C.F.R. § 416.1205(c). Resources are defined as "cash or other liquid assets or any
... personal property that an individual (or spouse ... ) owns and could convert to cash to be used
for his ... support and maintenance." 20 C.F.R. § 416.1201(a). In determining the resources a
claimant owns, there are exclusions for certain items, including a single vehicle and personal
residence. See 42 U.S.C. § 1382b.
"An overpayment is a payment of an amount more than the amount due for a given
period... If an individual receiving SSI benefits is incorrectly paid more than the amount he is
entitled to, the Commissioner is authorized to seek a repayment of the excess amount of benefits."
Mesias v. Doe, No. 11–CV–2373, 2012 WL 3704824, *3 (E.D.N.Y. Aug. 24, 2012) (citing 20
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C.F.R. §§ 416.537 & 416.550; 42 U.S.C. § 1383(b)(1)(A)); see also 42 U.S .C. § 404 (providing
in relevant part that "[w]henever the Commissioner ... finds that more or less than the correct
amount of payment has been made ... proper adjustment or recovery shall be made ...."). Federal
regulations "allow[ ] for waiver of recovery of an overpayment ... where (1) an overpayment has
been made to an individual who is without fault, and (2) when adjustment or recovery would
either defeat the purpose of the Act, or be against equity and good conscience." Hannon v.
Barnhart, 134 Fed. Appx. 485, 486 (2d Cir. 2005) (internal quotation marks omitted) (quoting 20
C.F.R. § 404.506). If the individual cannot satisfy the first prong of the analysis, namely that he
or she was without fault, then the second prong need not be considered. See Chlieb v. Heckler,
777 F.2d 842, 846 (2d Cir. 1985) (citations omitted).
Fault will be found when an incorrect payment "resulted from" one of the following: "(a)
Failure to furnish information which the individual knew or should have known was material; (b)
An incorrect statement made by the individual which he knew or should have known was
incorrect (this includes the individual's furnishing his opinion or conclusion when he was asked
for facts), or (c) The individual did not return a payment which he knew or could have been
expected to know was incorrect." Howard v. Secretary of Health & Human Servs., 741 F.2d 4, 78 (2d Cir. 1984) (citing 20 C.F.R. § 416.552). "No showing of bad faith is required; rather, an
honest mistake may be sufficient to constitute fault . . . The fact that the SSA may have been at
fault in making the overpayment does not relieve the recipient from liability if the recipient was
also at fault." Center v. Schweiker, 704 F.2d 678, 680 (2d Cir. 1983) (internal citation omitted).
The burden of proof to show that waiver of overpayment should be applied falls on the plaintiff.
See Hannon, 134 Fed. Appx. at 487 (citing 42 U.S.C. § 404(b); 20 C.F.R. §§ 404.506, 404.507).

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In the present matter, Plaintiff appeals the unfavorable aspect of the ALJ's decision finding
that Plaintiff "was overpaid benefits in the amount of $690.00 for September 2006 and was not
'without fault' in the creation of the overpayment." Dkt. No. 46 at 1-2. In his decision, the ALJ
identified that the "General issue to be resolved is whether the claimant was without fault in the
creation of an overpayment in September 2006 and, if so, whether recovery or adjustment of the
overpayment can be waived." Dkt. No. 51 at 157-58. As relevant here, in September 2007, an
IRS alert was received identifying Plaintiff as the recipient of gambling winnings in the amount
of $1,963.22 on September 16, 2006 from the Turning Stone Casino in Oneida, New York. See
id. at 159. The gambling winnings rendered Plaintiff ineligible for his SSI payment that month,
causing a $690.00 overpayment. See id. Thereafter, Plaintiff requested a waiver of recovery of
this overpayment. See id.
According to the ALJ, the SSA had previously received an IRS alert in October 2006
which identified Plaintiff as a recipient of gambling winnings of $2,000.00 in April 2005. See
id. at 160. In May of 2007, the overpayment was waived and Plaintiff was given his reporting
responsibilities regarding gambling winnings. See id.
When Plaintiff filed the request for waiver on February 27, 2008 for the September 2006
overpayment, he claimed that he never received the gambling winnings. See Dkt. No. 51 at 160.
Rather, Plaintiff alleged that he was a victim of identity theft, naming Claire Nolan as the
individual who used his personal documents to commit fraudulent activities. See id. On the
waiver request form, Plaintiff stated that Ms. Nolan was his friend and that he filed a police report
regarding this alleged identity theft. See id.; Dkt. No. 43 at 79. On June 19, 2008, the
Administration requested supporting documentation regarding this police report and the outcome

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of the investigation. See id. On October 1, 2008, Plaintiff signed a statement claiming to have no
knowledge of an individual named Claire Nolan. See id.; Dkt. No. 43 at 76-77.
ALJ Gale evaluated the evidence and determined that Plaintiff was not without fault in
causing the $690.00 overpayment in SSI. First, as discussed, ALJ Gale noted that Plaintiff had
previously won $2,000.00 from Turning Stone Casino that he failed to report. See Dkt. No. 51 at
160. The recovery of the first overpayment was waived in May 2007 and, at that time, Plaintiff
was notified regarding his reporting responsibilities for gambling winnings. See id. It was after
this warning, in September 2007, that the SSA received the W-2G which reported $1,963.22 in
gambling winnings from the Turning Stone Casino with Plaintiff's signature. See id. at 159; see
also Dkt. No. 43 at 71. The SSA determined that the gambling winnings increased Plaintiff's
income and led to a $690.00 overpayment in SSI for September 2006. See Dkt. No. 51 at 159.
Plaintiff contested this decision and alleged he was a victim of identity theft, initially naming
Claire Nolan as the woman who stole his identity. See id. at 160. Thereafter, Plaintiff changed
his story several times, first by denying knowledge of anyone by the name of Claire Nolan and
then claiming that a friend of his ex-wife stole a copy his license from his home. See Dkt. No. 43
at 63.
Based on the information in the record, the Court finds that the ALJ properly concluded
that Plaintiff was not without fault in causing the overpayment. The overwhelming evidence
demonstrates that Plaintiff knowingly made false statements to conceal his winnings.1

As ALJ Gale concluded, Plaintiff's story continually changes. See Dkt. No. 51 at 160.
The inconsistencies are even more apparent after reviewing the procedures in place at Turning
Stone Casino to collect money. For a winner to collect, he or she must produce photo
identification. See id. at 160; see also Dkt. No. 43 at 64-65. A district manager for the SSA
reported, "[w]e contacted the Casino and verified that when someone wins in the amount of
$1100.00 (minimum), it is mandated they show picture ID to claim their prize winnings[.] The
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(continued...)
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2. Plaintiff's other allegations
Plaintiff makes several other allegations in his brief including a claim that he "cannot read
or write English." Dkt. No. 46 at 1. Plaintiff did not have any language difficulties in the four
hearings that ALJ Gale presided over, and the prior ALJ who held the first hearing noted no
language problems. See Dkt. No. 51 at 161. Moreover, Plaintiff waived his right to have an
interpreter on May 1, 2015. See id. at 185-86. In doing so, Plaintiff explained that he understood
English as long as it was spoken slowly. See id. at 186. Additionally, Plaintiff did not require an
interpreter for any of the multiple telephone conversations Plaintiff had with ALJ Gale's staff and,
as ALJ Gale noted, Plaintiff "submitted multiple written statements and affidavits at the hearing
level and to the District Court setting forth his grievances and position on various issues." Id. at
161. As such, the Court finds that Plaintiff's professed inability to understand English is entirely
belied by the record. Plaintiff was repeatedly offered the services of an interpreter and refused.
As such, this argument provides no basis for relief.
Plaintiff has also claimed that ALJ Gale should be dismissed because he was "under
investigation and [ALJ Gale] should withdraw the case at this point, until the investigation is
over." Dkt. No. 51 at 169. Throughout the proceedings, both before this Court and at the
administrative level, Plaintiff has alleged that various individuals are either biased or conspiring
against him. However, the record makes clear that the ALJs assigned to Plaintiff's matter

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(...continued)

picture on the ID must match the person claiming the winnings and those winnings are then
posted to their social security number." Dkt. No. 43 at 66. Turning Stone Casino indicated that a
New York State driver's license and a social security card were used to collect the $1963.22
disputed by Plaintiff. See id. at 58. The agency contacted the New York Department of Motor
Vehicles and confirmed that Plaintiff's license was still active and never replaced. See id. The
agency also confirmed that Plaintiff's social security card had not been replaced since 1994. See
id.
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repeatedly granted Plaintiff additional opportunities to gather evidence and to find an attorney.
The ALJs applied the correct legal standards to the facts, considered all evidence presented, and
did not demonstrate any hostility or bias in rendering their decisions. See Card v. Astrue, 752 F.
Supp. 2d 190, 191-92 (D. Conn. 2010). Accordingly, the Court finds that these conclusory
allegations, which are entirely unsupported by the record before the Court, provide no basis for
relief.
Additionally, Plaintiff alleged that he received threatening phone calls from Benil
Abraham, the attorney for the Commissioner, and that Abraham "make me sign a proposal which
I did not know what I was signing." Dkt. No. 46 at 1 (errors in the original). In considering
Plaintiff's allegations, ALJ Gale concluded "there is no evidence of a vendetta on the part of
anyone against the claimant. In fact, the claimant has obtained favorable treatment from those he
accused of a personal vendetta, including previously having received a waiver for an earlier
overpayment associated with gambling winnings." Dkt. No. 51 at 161. Nothing in the record
supports Plaintiff's conclusory assertions regarding Benil Abraham.
Lastly, Plaintiff requests that Carmel Sullivan, Paul Rejman, and Cathy Kruplarcz be
"fired or suspended for a year with no pay." Dkt. No. 46 at 1. On February 5, 2013, the Court
ordered that these named Defendants be dismissed from this action. See Dkt. No. 28 at 1. As
such, Plaintiff's request is denied.
IV. CONCLUSION
After carefully reviewing the entire record in this matter, the parties' submissions and the
applicable law, and for the above-stated reasons, the Court hereby
ORDERS that the Commissioner's decision is AFFIRMED and this matter is
DISMISSED; and the Court further
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ORDERS that the Clerk of the Court shall enter judgment and close this case; and the
Court further
ORDERS that the Clerk of the Court shall serve a copy of this Memorandum-Decision
and Order on all parties in accordance with the Local Rules.
IT IS SO ORDERED.
Dated: July 18, 2017
Albany, New York

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