11220 Penalties For Fraud

11221 Disqualification Penalties   

11221.1 Food Assistance - Individuals found to have committed fraud either through an administration disqualification hearing or by a court of appropriate jurisdiction or who have signed either a waiver of right to an administrative disqualification hearing or a disqualification consent agreement in cases referred for prosecution, shall be ineligible to participate in the program. Persons disqualified from the Food Distribution on Indian Reservations Program (FDPIR) shall also be disqualified for food assistance until the disqualification period has expired. Persons disqualified from the food assistance program will be disqualified from FDPIR until the disqualification period has expired. Also see KEESM 2151 and 4212.2. Verification of whether a person is getting FDPIR or not needs to now include a question about fraud disqualification. FDPIR fraud disqualifications do not count as food assistance disqualifications when determining the number of disqualifications.

The following disqualification periods apply:

1. Twelve (12) months for the first violation that occurs on or after 8/22/96 (offenses that occurred prior to 8/22/96 shall be ineligible for six (6) months for the first violation);
   
   
2. Twenty-four (24) months for the second violation that occurs on or after 8/22/96 (offenses that occurred prior to 8/22/96 shall be ineligible for twelve (12) months for the second violation); and
   
   
3. Permanently for the third violation.
   
   

A court may impose an additional 18 months disqualification period for the first and second convictions on criminal cases only.

For food assistance, only the individual, and not the entire household, found to have committed fraud, or who signed the waiver to an administrative hearing or a disqualification consent agreement in cases referred for prosecution, shall be disqualified.

Persons rendered ineligible under the above provisions shall be considered disqualified per 4212.3.

4. Individuals found by a federal, state or local court (on or after September 1, 1994) to have used or received food assistance benefits in a transaction involving the sale of a controlled substance shall be ineligible to participate in the food assistance program for:
   
   
   1. Twenty-four (24) months upon the first occasion of such violation; and
      
      
   2. Permanently upon the second occasion of such violation.
   
   

   NOTE: From September 1, 1994 to August 22, 1996, first findings under this section resulted in ineligibility for 12 months. First time findings after August 22, 1996 result in 24 months.

   
   

5. Individuals found by a federal, state or local court (on or after September 1, 1994) to have used or received food assistance benefits in a transaction involving the sale of firearms, ammunition, or explosives shall be permanently ineligible to participate in the food assistance program upon the first occasion of such violation.
   
   NOTE: The penalties described in paragraphs (1) and (2) of this item shall also apply in cases of deferred adjudication where the court makes a finding that the individual engaged in the conduct described in paragraphs (4) or (5) of this section.

   
   

6. Individuals convicted of trafficking food assistance benefits of $500 or more on or after 8/22/96 shall be permanently ineligible to participate in the food assistance program.
   
   Trafficking is defined as:

   
   
   1. The buying, selling, stealing or otherwise affecting an exchange of food assistance benefits issued and accessed via EBT cards, card numbers and PINs, or by manual voucher and signature, for cash or consideration other than eligible food, either directly or indirectly, in complicity or collusion with others or acting alone.
      
      
   2. Purchasing a product with food assistance benefits that has a container requiring a return deposit with the intent of obtaining cash by discarding the product and returning the container for the deposit amount, intentionally discarding the product and intentionally returning the container for the deposit amount.
      
      
   3. Purchasing a product with food assistance benefits with the intent of obtaining cash or consideration other than eligible food by reselling the product, and subsequently intentionally reselling the product purchased with food assistance benefits in exchange for cash or consideration other than eligible food.
      
      
   4. Intentionally purchasing products originally purchased with food assistance benefits in exchange for cash or consideration other than eligible food.
      
      
7. An individual shall be ineligible to participate in the Food Assistance Program as a member of any household for a 10-year period if the individual is found by an ADH to have made, or is convicted of a crime in a Federal or State court for having made a fraudulent statement or representation with respect to the identity or place of residence of the individual in order to receive multiple food assistance benefits simultaneously. The offense must occur on or after 8/22/96.

NOTE: A civil judgment with a finding of fraud does not meet the criteria for a 10-year disqualification. Such findings only result in the penalties described in 11221.1 (1), (2) or (3).  

NOTE: Ineligibility for 10 years per item (7) of this section counts when determining if the violation is the first, second, or third.

For example, an individual served his/her first disqualification for 12 mos. from 7/1/2003 - 6/30/2004. The individual is next found ineligible for 10 years per the provisions of 11221.1(7). This is the person's second finding of fraud. A third finding of fraud will result in permanent ineligibility per 11221.1 (3).

For food assistance, misrepresentations regarding identity do not necessarily involve two or more states, the misrepresentation for simultaneous receipt can occur within the state.

To help Staff determine if a duplicate participation event qualifies for a 10-year disqualification referral, the following examples are provided:

• Event that would qualify for a 10-year disqualification referral: Client lives in Oklahoma and receives food assistance benefits in Oklahoma. Crosses the border and applies and receives food assistance benefits in Kansas while still living and receiving food assistance benefits in Oklahoma.
   
• Event that would not qualify for a 10-year disqualification referral: Client moves to Kansas from Oklahoma in June. Does not report that he was receiving food assistance in Oklahoma, however, did tell his Oklahoma worker he moved to Kansas. food assistance benefits approved for June in Kansas, however, case in Oklahoma not closed until June 30, so client received benefits in both states for the same month. This is not a 10-year disqualifying event because the client did not make a fraudulent statement or representation with respect to his place of residence in order to receive multiple food assistance benefits. An overpayment would, however, be determined for the month of June and collected as a client error.

If a court fails to impose a disqualification period for any fraud violation, the state agency shall impose the appropriate disqualification penalty specified above unless it is contrary to the court order.

11221.2 TANF and Child Care Penalties –

1. Adults in the household who were determined to have committed fraud will render themselves and all adult TANF household members, as determined by assistance planning rules, ineligible for their lifetime.  
   
   Lifetime ineligibility is applied to both programs, even if fraud is only committed in one program.
   
   All TANF households found guilty of fraud in TANF and/or child care are required to have a protective payee assigned to receive and manage the TANF benefits. No TANF benefits may be accessed by the household. See KEESM 1515. Households may elect to name a protective payee. If the household cannot name a suitable protective payee, the agency will identify one for them. If no suitable protective payee can be identified, the TANF case will close, allowing for timely and adequate notice.
   
   
2. When an adult fails to cooperate with a fraud investigation, there is ineligibility for all members included on the program being investigated until cooperation has been established in the fraud investigation.
   
   The fraud unit will be responsible to contact the individual in writing two times and by telephone (if available) to request cooperation and information before a finding of non-cooperation. Each contact will contain information on the penalty for failing to cooperate.
   
   Ineligibility for failing to cooperate will exist for mandatory and non-mandatory household members that are participating in the program being investigated. Ineligibility will result even if the non-cooperating adult is a cash excluded member, such as an SSI recipient or an ineligible non-citizen. Ineligibility is only applied to the program being investigated.
   
   An ongoing case can be reinstated with no proration of benefits, if the adult cooperates in the month following the month of closure. If assistance is terminated for refusal to cooperate and they reapply prior to cooperation, the application is to be denied. If they cooperate after the application has been filed and before the time limit has expired on the application, benefits are to be pro-rated from the date of application.