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Examiner
  • Mortgage broker convicted in Social Security fraud scheme

  • A federal court jury took only three and a half hours to convict an Independence man of a Social Security fraud conspiracy.

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  • A federal court jury took only three and a half hours to convict an Independence man of a Social Security fraud conspiracy.
    Charles David Koss, 63, who lives in Independence, was found guilty Monday of two counts of theft of government money, one count of Social Security disability fraud, one count of mail fraud and one count of transmitting a false negotiable instrument with the intent to defraud the government.
    Koss was receiving Social Security disability payments while running a mortgage brokerage firm in Blue Springs. Court documents say that Koss fraudulently received $212,768 in Social Security disability payments between September 1994 and January 2010. During that time Koss owned and operated Embassy Mortgage in Blue Springs.
    He worked as a full-time loan officer and ran the business, while his wife did paperwork, such as paying bills and processing documents, according to witnesses.
    Witnesses also testified that Koss, who began receiving disability payments in 1987 for myoneural disorder and hypertension, led an active lifestyle that included bowling, golfing, boating, activities at his lake house and frequent visits to Ameristar Casino, where he gambled approximately $260,000 during that span. Koss failed to report any change in his health condition or any income from Embassy Mortgage to the Social Security Administration.
    Koss also received a $250 economic stimulus payment to which he was not entitled. The American Recovery and Reinvestment Act of 2009 provided one-time payments of $250 to individuals who were eligible for Title II Disability Insurance Benefits.
    On April 15, 2010, he received a bill from the Social Security Administration demanding repayment of the $212,768. A month later he mailed in a document entitled “Registered Private Money Order.” The account that the fraudulent document supposedly came from did not exist.
    Koss told federal investigators that he subscribed to what is known as the redemption theory, the indictment says, which claims that a “birthright trust” is created with the U.S. Treasury when parents of a newborn child pledge the child’s birth certificate to the government. Redemption theory involves bogus claims that when the United States government abandoned the gold standard in 1933, it pledged its citizens as collateral so it could borrow money. The movement also asserts that common citizens can gain access to funds in secret accounts using obscure procedures and regulations. The federal government says these “sovereign citizen” theories have no basis in law.
    Koss faces a sentence of up to 61 years in federal prison without parole, and a fine of up to $1.1 million and an order to pay back the money. A sentencing hearing will be scheduled after an investigation by the U.S. Probation Office.
     
     
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