Social Security employee sentenced for creating fake children’s profiles to steal public funds

BROWNSVILLE, Texas - A 40-year-old Harlingen resident and former claims specialist with the Social Security Administration (SSA) is headed to federal prison for theft of government property and for failure to appear for sentencing.

Fake Social Security profiles

The backstory:

According to U.S. Attorney Nicholas J. Ganjei, Lee Marvin Nichols originally admitted to creating fake Social Security profiles for two children that did not exist. He linked the profiles to a recently deceased man and disabled woman living in Mexico in an attempt to create a survivor benefits application.

Nichols had the debit cards for the children’s benefits sent to the address of an acquaintance of his. He would then use the debit cards to make regular withdrawals at ATMs. When making those withdrawals, he tried to disguise himself by using hats pulled down over his face, sunglasses, balaclavas and other clothing.

In addition, the IRS issued economic stimulus payments of $1,400 to each fictitious child pursuant to the Coronavirus Aid, Relief and Economic Security Act.

At the hearing, the court heard evidence describing how Nichols intentionally misused the identities of vulnerable individuals—including a man who originally applied for benefits after being diagnosed with a terminal illness. Nichols waited until this man died before creating the fraudulent application and then withdrew the benefits using a debit card at drive-thru ATMs where he concealed his identity using masks and other coverings. 

The court also heard how Nichols’ flight from justice wasted government and court resources and how, by taking his luxury pickup truck to Mexico, Nichols prevented the truck from being sold for restitution.

What they're saying:

"The defendant not only stole from the American taxpayer, but he also abused the trust given him as a public servant," said Ganjei. "The Southern District of Texas will continue to safeguard the public fisc by rooting out fraudsters like Mr. Nichols."

The Sentencing:

Lee Marvin Nichols pleaded guilty to the theft charge on Oct. 3, 2023. 

He was originally set for sentencing on Feb. 14, 2024, but failed to appear and fled to Mexico. He returned to the United States in September 2024 and later pleaded guilty to the subsequent charge on Dec. 2, 2024.

U.S. District Judge Rolando Olvera ordered Nichols to serve 18 months in federal prison for the underlying theft charge as well as another six months for his failure to appear. The sentences will run consecutively for a total of 24 months in prison. He must also serve three years of supervised release following completion of his sentence.

As part of his plea, Nichols took responsibility for over $75,000 in losses to the federal government. He also agreed to pay $82,516 in restitution to the SSA and $2,800 in restitution to the IRS.

Nichols will remain in custody pending transfer to a U.S. Bureau of Prisons facility to be determined in the near future.