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Woman pleads guilty to stealing Social Security benefits

A Shady Cove woman will have to pay back more than $47,000 after admitting she lied to the Social Security Administration about where she lived in order to collect benefits for which she wasn’t eligible.

Mary Kay Babb, 56, pleaded guilty Monday in U.S. District Court in Medford to a charge of theft of government funds surrounding years of false statements about her household living arrangements and the assets she shared with her husband, leading to a benefit fraud that lasted more than seven years.

Between 2011 and 2018, Babb collected an extra $47,321.24 in benefits based on false statements to the government stating that she lived separately from her husband, Donald, when they actually still shared a home, according to the plea document.

In 2010, the year Babb applied for Supplemental Security Income benefits through the Social Security Administration, her husband earned more than $112,000, according to a document entering a guilty plea that was co-signed on her behalf by her public defender, Brian Butler, and Special Assistant U.S. Attorney Rachel Sowray, who prosecuted the case.

Her husband’s income dropped to about $24,000 in 2012 and rose to more than $54,000 in 2017, according to the plea document. The government states that her husband’s earnings each year made Babb “ineligible for benefits.”

According to the Social Security Administration website, Supplemental Security Income or SSI is a federal program “designed to help aged, blind and disabled people who have little or no income.”

Because of her husband’s income, Babb wasn’t eligible for SSI benefits. The government states that Babb knew that because she was denied “multiple times” for that very reason since 1998.

“She was denied multiple times following that, and each time defendant was told it was because her spouse’s resources were too high.”

Her application for SSI benefits Dec. 2, 2010 was more successful, according to the plea document. On that one, she falsely claimed that she was separated from her husband.

Jackson County Circuit Court records show no record of any separation or divorce paperwork in Babb’s name.

At least once in the seven years she collected benefits between 2011 and 2018 investigators determined she actually lived with her spouse, despite her statements and written claims to Social Security staff otherwise, the plea document states. Into 2019, Babb reportedly told the government that she was moving out of her husband’s home so she could “resume receiving benefits,” the plea agreement states.

Theft of government funds carries a maximum penalty of 10 years in prison and a $250,000 fine; however, under terms of the plea agreement, federal prosecutors will seek a penalty of six months in prison and a $100 fine as long as Babb accepts responsibility, obeys all laws and agrees to pay the full restitution amount.

She’ll be required to fully disclose to the U.S. Attorney’s Office and U.S. Probation Office all assets over which she has direct and indirect control, and must notify the government of any property transfers valued at more than $1,000, according to the plea agreement.

Babb’s next court appearance is a sentencing hearing scheduled for April 20.

Reach reporter Nick Morgan at 541-776-4471 or nmorgan@rosebudmedia.com. Follow him on Twitter @MTCrimeBeat.