Whitefish Bay couple accused of stealing $115,000 from state in fraud scheme

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WHITEFISH BAY (WITI) --This is a couple who seemed to have it all, but they apparently wanted more in the form of government handouts.  A Whitefish Bay couple, living in an almost $400,000 home, is suspected of food stamp fraud. Investigators believe they intentionally committed public assistance fraud to the tune of $115,000.

Tan stone, bright blue trim, it's a home that stands out near the corner of Santa Monica Boulevard and Belle Avenue in Whitefish Bay.

"I wouldn't think that they'd have money problems," said a neighbor.

Now it's a home neighbors are talking about, and it has nothing to do with the decor. Detailed in a search warrant, executed by Whitefish Bay police earlier this week, is an alleged scheme to fleece the government out of nearly $115,000.

Investigators say Todd Schaller and Mary Gallagher live there with their daughters, it's a home valued at roughly $380,000.

Gallagher and Schaller

Mary Gallagher & Todd Schaller

"I'm shocked. I didn't know anything was going on," said a neighbor.

But according to court documents, Gallagher had reported she lived alone in the home in Shorewood. Records show the couple sold the house in 2009.

Officials believe the fake address was done so that the couple could hide income and collect government assistance.

Since 2006, it breaks down to nearly $64,000 from the food share program and $51,000 from medicaid.

An anonymous letter tipped off investigators -- and even included copies of Gallagher's Quest card, application for free school lunches, and a 2012 Milwaukee Journal Sentinal article that showed off their lavish home and 'blended household' -- clearly defining the couple as living there. The tipster says they have for nine years.

When police arrived to search the place this week it caused the kind of scene that will likely put Gallagher and Schaller back in the newspaper, but for different reasons.

Both Gallagher and Schaller were arrested but released from custody. Investigators from Whitefish Bay police would not comment on camera.

The state Health Services Fraud Investigator assigned to this case, did not return our call.

24 comments

  • Maria

    I detest cheaters. Especially those who steal taxpayer money. I also find it ridiculous that neither Medicaid nor SNAP did any kind of address verification. I mean, is the entire system of free money and benefits based in trust in self reported information?

    • richard cranium

      since i’m a taxpayer, you’re a taxpayer, and they ripped us off i think it’s only fair that we get to go over there and help ourselves to whatever we want to recoup our losses.

    • Stumpe

      Do you really think some minimum wage state employee is going to go out of their way to verify what people write done on the application? The few that are in control of oversight and internal audits are so back log that it will take years. The system needs to be reformed.

      • MiMi D

        I worked for a W-2 agency before and would sanction all the obvious bs cases. They were supposed to be looking for jobs and turn in the job search logs. They would make up fake locations and use the same contact person for multiple positions/companies on the SAME forms. I was told that “we didn’t have time” to be that thorough because of how much paperwork we had. White, black, Hispanic, you name it. I’ve seen them ALL do it and get away with it.

      • MiMi D

        Oh yea, minimum wage state employees? They’re started off with at least double that. I started as a temp with less pay than permanent employees and still did my job, only to be told NOT to do my job as well because of the caseloads. Sooooo yea. Just depends on who it is.

    • Reasonless

      I agree that these two crooks should be punished to the fullest extent, along with having to pay restitution for their crime.
      My guess however, is that they were led by example. Look at all of the theft and misuse of taxpayer money that takes place daily by Obama and his administration. These two probably saw nothing wrong with the mere peanuts that they helped themselves to.

  • Babs

    Wisconsin needs to start stepping up and going after all the strippers that make more money than most people and are still on assistance. Go after those on unemployment working for cash. There are alot of people defrauding the system. It’s time to put a time limit and an end to all the free handouts.

  • opinion8d

    And this is just what TWO people scammed!! Imagine the amount of fraud and waste going on with our tax dollars!!! That is why it was better left to local organizations and churches to help the needy. There was accountability on the part of the person receiving the aid. Liberal did away with this becuase people could be ‘judged’ for their choice and we couldn’t have people feel bad…..

    • Mr. Bob

      Add to that all of the wasted taxpayer dollars in the normal operations of state government. Throwing good money after bad money to clean up buildings that should be torn down. Wasteful spending on luxuries like the latest version of the Iphone instead of using a previous generation of an Iphone. It goes on and on and that is just standard operating procedure.

  • Mike

    Speaking from personal experience, the woman is a pompous a** who thinks she is better than everybody. Karma is a b*tch.

  • mkelover

    Ummm…have you seen everyone else’s comments? I’d say this WHITE couple is being taken to the woodshed. Fraud is fraud no matter where it takes place. It’s not defensible. But I get it, you need to immediately bash people for not attacking this couple as fast as you’d like.

  • MIke

    Looks to me like you’re the racist for bringing it up. All the comments are pretty harsh towards the white trash in this article.

  • Mike

    Seems to me that you’re the racist for bringing it up. All the comments on here have been very negative towards the trash in this article.

  • Sue

    This is really sad – considering all of the crazy financial reviews that we are going through to my MIL on Medicaid – we get delays because she doesn’t have receipts for any cash spent the last 5 years and they are getting benefits – the system is broke

  • AMRS

    I knew this guy he had a lot of pride. I really feel sorry for them. It wasn’t wise on there part for doing what they did but there is so much fraud out there everyday. The best thing for people to do is pray for them and hope that they learn from this. God bless you Todd!

  • waz is a crook

    My brother has been scamming the state for years and when it gets reported nothing is done because he’s a state employee. At least these two crooks are getting what is deserved.

  • What!

    @BIG414 Do you mean black people being racist towards these white people otherwise your comment makes no sense. White on white racism, lol.You should probably learn the difference between a stereotype and racism. If it’s true it’s a stereotype.

  • CJ

    This is a system NOT based on the horror system, I can assure you. On occasion, poverty, disability or unemployment have forced us to apply for various assistance such as food stamps. They check EVERYTHING you send them, twelve ways til Sunday, and then they check it again. The income has to be VERY, VERY low before you will qualify. The system works unless people deliberately lie, cheat, and purposefully commit fraud, which is what these people did. If anything, the “facts” this couple presented should have been checked, unfortunately the people who work for these government agencies are understaffed and underpaid, and they can’t go to every house to check whom lives there. Audits should be done, randomly, but ultimately, they rely on the public to turn these criminals in.

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