Office of the Attorney General
Attorney General Stumbo Announces Release of Special Grand Jury Investigative Report on Welfare Fraud

Press Release Date:  Friday, September 29, 2006  
Contact Information:  Vicki Glass, 502-696-5643 Office  


Attorney General Greg Stumbo today announced that the Franklin County Special Grand Jury has released its final report on welfare fraud within Kentucky’s Cabinet for Health and Family Services.

The report finds widespread failure to guard against rampant fraud in the welfare system, particularly theft by government employees.  The Grand Jury report states, “We have outlined in this Report systemic deficiencies we believe contribute to ongoing welfare worker and recipient fraud, and deserve to be addressed in order to make the system less susceptible to such fraud and the resultant loss of millions of dollars in desperately needed funds for the Commonwealth.”

“The Grand Jury has made one thing perfectly plain – the state’s welfare system is riddled with fraud,” said Attorney General Stumbo.  “This is a perfect example of the fox guarding the henhouse. When hard-earned tax dollars are stolen, an independent investigator is a must.  We will be watching closely to see that the Cabinet takes this opportunity to immediately implement the recommendations of the Grand Jury.”

The Special Grand Jury was empanelled by former Franklin Circuit Court Judge William Graham at the request of Attorney General Stumbo in June, 2005, after the Attorney General’s Special Prosecutions Division and Kentucky Bureau of Investigation (KBI) found evidence of widespread mismanagement by the Cabinet. The State Auditor, Crit Luallen, assisted in the investigation, identifying tens of thousands of suspicious transactions.

Between March 21, 2006 and August 14, 2006, the Special Grand Jury heard testimony from 40 witnesses and returned indictments charging 10 individuals with a total of 136 felony counts of Assistance Program Fraud, Forgery and Perjury in connection with Welfare Assistance Programs administered by the Cabinet for Health and Family Services. Eight of the individuals indicted by the Special Grand Jury were employees or former employees of the Cabinet or one of its contractors.

2006 Franklin County Special Grand Jury Investigative Report on Welfare Fraud (502KB PDF)