Local couple accused of fraud

An Encampment couple could be facing a total of 28 counts of welfare fraud—all felonies—according to documents filed with Carbon County Circuit Court.

According to an affidavit of probable cause, Sarah Fitzwater and Matthew Wagy are accused of defrauding three welfare programs of nearly $45,000 between 2017 and 2023. Fitzwater is facing 19 counts, Wagy is facing 9 counts as an accomplice. Each count carries with it a $10,000 fine, up to 10 years in prison or both.

Following an investigation by the Department of Family Services Eligibility Integrity Unit, it was alleged Fitzwater and Wagy received overpayments from the Supplemental Nutrition Assistance Program (SNAP), the Low-Income Energy Assistance Program (LIEAP) and Medicaid. The total in overpayments was estimated to be $44,996.55 with $34,229 from SNAP between July 1, 2017 and July 2023, $3,549.78 from LIEAP between October 1, 2018 and December 30, 2022 and $7,207.77 from Medicaid between January 1, 2018 and June 1, 2023.

Fiztwater first filed for assistance through the Department of Family Services in July 2017. She claimed she was unemployed and that Wagy didn’t live with her and the couple’s three children at their residence in Saratoga, according to court documents. The only exceptions in regards to her employment throughout all the filings were in 2018 and 2022 when she said she worked at a motel in Walden, Colorado. Fitzwater also claimed income of $1,052 a month in child support payments from Wagy in the majority of the assistance filings.

During one interview with a benefit specialist, Fitzwater was asked how she could make a house payment, pay utilities and still have money leftover. Her response, according to court documents, was “My credit is really good and I have a credit card that I can use for anything.”

In various interviews with benefit specialists, Fitzwater reiterated she and her children did not live in the same residence as Wagy. In 2019, a rental verification form for the residence in Saratoga was submitted by Fitzwater listing Wagy as the landlord and a receipt for $600 for rent payment. She told one benefit specialist Wagy had refinanced their home with himself as the sole owner and that she received in-kind income of $600 for taking care of their children and the house.

Later, in 2019, Fitzwater reported Wagy had bought a house in Encampment “free and clear” and therefore she did not have to pay rent. Later filings claimed Fitzwater also owned the house, but did not have a mortgage payment. Notes from Fitzwater at this time claimed she paid all the bills, except for the municipal bill, which was paid by Wagy. The couple continued to claim they lived separately.

In May 2022, claims over overpayment were established for SNAP, LIEAP and Medicaid. In November of 2022, additional claims were established for SNAP and LIEAP. According to court documents, evidence gathered during the investigation included voter registration forms, primary candidate filings and employee documents which revealed Fitzwater and Wagy claimed the same residence since first applying for assistance.

Additionally, Wagy admitted in an October 2022 interview with a DFS investigator he lived at the same residence in Encampment but that he stayed in a trailer parked in his shop. He also admitted to signing notes submitted by Fitzwater about her monthly expenses.

Other evidence gathered during the investigation included social media posts regarding a wedding in Mexico, detailing vacations and the purchase of a new vehicle. According to court documents, Fitzwater also failed to disclose bank accounts which were owned jointly with Wagy.

According to the affidavit, “Fitzwater falsified information in order to be eligible for benefits, to which she knew she was not entitled. The household was not eligible for a portion of the SNAP, Medicaid and LIEAP benefits that were authorized.”

Fitzwater and Wagy were scheduled to make their first appearance in court on July 19. They are innocent until proven guilty.