11230 Determining the Proper Type of Referral (For all programs) - The same act of alleged fraud repeated over a period of time shall not be separated so that separate penalties can be imposed. If it is decided that a case will not be referred for prosecution, or the local Fraud Unit has declined prosecution and not recommended a referral to the Administrative Disqualification Hearing Officer, then the overpayment shall be handled as a client overpayment as outlined in 11121.2. The burden of proving fraud is on the agency. All referrals shall be reviewed by the EES Supervisor prior to the referral being sent to either the local Fraud Unit or the Office of Administrative Hearings.
There is no minimum amount of alleged fraudulent overpayment required to initiate a fraud determination action.
Claims (individual program or combined) of less than $1001 are to be referred to an Administrative Disqualification Hearing.
Claims (individual program or combined) of $1001 and over are to be referred to the fraud unit who will determine the appropriate course of action.
11231 Fraud Unit Referrals - All cases suspected of fraud shall be referred to the Fraud Unit.
The local Fraud Unit will make a decision as to whether or not to pursue prosecution through either civil or criminal action. Once a case is referred to the Fraud Unit, the local agency shall follow whatever instructions the Fraud Unit staff give in regard to prosecution. If the Fraud Unit decides not to prosecute the case, the overissuance should be handled as a client overissuance. When the case has been accepted for prosecution there shall be no further referral to the Administrative Disqualification Hearing Officer by the local worker.
If an alleged fraudulent overissuance is accepted for prosecution and the client enters into a diversion agreement, a finding of fraud is not made. As a result, the individual cannot be disqualified, nor can the amount of the overissuance be coded as fraud on the system. These claims must be coded as client errors. In addition, the alleged fraudulent overissuance can not be referred for an administrative disqualification hearing for the purpose of a finding of fraud. For these reasons, it is suggested that a disqualification consent agreement be obtained by the prosecutor when individuals enter into diversion agreements. Only when a disqualification consent agreement has been signed can the claim be coded as fraud and the individual disqualified from the program.
The prosecutor will be responsible to obtain the consent agreement.
Whenever possible, persons referred to the Fraud Unit should not receive notification that the case is under investigation prior to a determination by the Fraud Unit regarding the action to be taken. When responding to client inquiries concerning suspected fraud overpayments, EES staff should simply advise the client that the cash case is "under administrative review." Any involvement by the Fraud Unit should not be mentioned to the client.
NOTE FOR CHILD CARE: If the client or the provider is found guilty of civil or criminal child care fraud by a court of appropriate jurisdiction, recoupment, which may include debt set-off, will be initiated by the local Fraud Unit. If the Fraud Unit decides not to prosecute the case, the local agency will be notified, no fraud determination will be made, and EES staff will enter the claim on the system and send an overpayment claim initiation notice.
11232 Administrative Disqualification Hearing Referrals - An Administrative Disqualification Hearing shall be requested when:
NOTE for Food Assistance Only: The time period an overissuance covers is very important when a second or third suspected fraudulent overpayment is referred for an Administrative Disqualification Hearing. Subsequent violations can only result in enhanced disqualification penalties (24 months or permanent) if the violation in question occurs after the individual has been notified of the prior hearing decision or waived opportunity for a hearing. The date of notification shall be considered to be two mailing days after the notice is mailed from Topeka. If a subsequent violation occurs before the individual has been notified of a prior hearing decision or waived opportunity for a hearing, the violation can be referred for an Administrative Disqualification Hearing only for the purpose of determining if fraud occurred and thus the claim categorized as fraud in the system. The individual cannot, however, be disqualified as a result of the hearing. These provisions also apply when an individual has been permanently disqualified from the program. An Administrative Disqualification Hearing can be held for the purpose of determining if the claim can be categorized as fraud, but no additional disqualification can be applied.
Example 1: A household incurs an overpayment for the time period 9/98 through 11/98. The Primary Applicant was referred for an ADH and a hearing was held 3/27/99. The Primary Applicant was found guilty of fraud and a notice was sent on 4/15/99 which was received by the household on 4/17/99. A 12-month disqualification is assessed. Then, in May 1999, it is discovered that the household incurred another potentially fraudulent overpayment in the months of 1/99 through 3/99. Since this second overpayment occurred BEFORE the household received the guilty notice on the first overpayment (4/17/99), the second violation covering 1/99 through 3/99 can only be referred for an ADH for the purpose of determining if fraud occurred. If fraud is determined, the claim can be categorized as fraud, but the individual cannot be disqualified.
Example 2: A household incurs their first potentially fraudulent overpayment covering 9/98 and 10/98. An ADH is requested and the hearing is scheduled for 5/15/99. On March 10, it is discovered that a second potentially fraudulent overpayment occurred in 1/99 and 2/99. If the agency notifies the household before April 15 (see 11250.7) of its intent to pursue a hearing for the second overpayment, that overpayment may be included in the 5/15 hearing. If found guilty, the household may end up with two fraudulent claims, but no more than one 12-month disqualification could be imposed for both fraudulent violations.
11240 Reserved