Prosecutors say Washington man faked retardation to collect benefits

TACOMA, Wash. – For nearly 20 years — ever since Pete Costello was 8 — his mother has collected disability benefits on his behalf. In meetings with Social Security officials and psychologists, he appeared mentally retarded and unable to communicate. His mother insisted he couldn't read or write, shower, take care of himself or drive a car.

But now prosecutors say it was all a huge fraud, and they have video of Costello contesting a traffic ticket to prove it.

"He's like any other person trying to get out of a traffic ticket," Assistant U.S. Attorney Norman Barbosa said Tuesday.

Pete and Rosie Marie Costello were indicted in September on charges of conspiracy to defraud the government and Social Security fraud. The Vancouver pair pleaded not guilty in federal court in Tacoma on Tuesday after the case was unsealed.

Barbosa filed with the court two videos of Pete Costello taken this year: In one, he allegedly feigns retardation during an interview with Social Security workers by slouching unresponsive in a corner, picking his nose; the other is of him contesting the traffic ticket in a courtroom earlier this year.

Pete Costello sat in court Tuesday, saying nothing, but showing no outward sign he is retarded. Instead of living with his mother, he works as an auto-body repairman and lives with a girlfriend and two of her children, prosecutors said.

"Obviously his mother did get him involved in this ... but he's been an adult for many years," Barbosa said.

Attorneys for the Costellos declined to comment after the hearing.

The indictment accuses Costello of faking — or at least exaggerating — retardation since August 1997, because that is what prosecutors are confident they can prove, Barbosa said. But the pair first received benefits 10 years before that.

Court documents indicate prosecutors believe his mother, 46, pulled the same trick with a daughter, whom officials have been unable to locate. All told, she raked in $222,000 on their behalf, according to the documents.

Barbosa said the government does not know whether Costello is retarded to some degree, but he clearly has been "exaggerating whatever he may have, if any."

"This person isn't being honest with the government about his condition," Barbosa said. "It makes it impossible to sort out."

Both Costellos remained in custody pending a detention hearing on Friday because both have moved multiple times in recent years.

And that traffic ticket? Pete Costello persuaded the court to give him a deferment.