Fraud - General Information

Definition of Fraud

Fraud occurs when the applicant/recipient knowingly and willfully makes a false statement and/or suppresses or withholds information to receive aid, or to prevent a denial, discontinuance or reduction of aid.

Note: In Santa Clara County, it has been the practice to rely on the EW to evaluate and determine reasonable grounds for suspicion and referral for fraud. Guidance on issues to be considered are included, along with the related processes. The goal is to keep fraudulently obtained benefits at a minimum while maintaining the rights of the applicant/recipient.

Fraud Prevention

To reduce the chance of fraud in all aid programs, the EW must:

Inform the applicant/recipient of what information is needed to determine eligibility and why that information is needed.
Review the rights and responsibilities for the program(s) with the applicant/recipient.
Explain to the applicant/recipient their responsibility to promptly report correct and complete information to the EW.
Document the applicant's/recipient's level of understanding of their reporting responsibilities on CalWIN Maintain Case Comments window (e.g. “Client states that he/she fully and completely understands reporting requirements.”)
Advise the applicant/recipient of the criminal penalties for making false statements or failing to report infor- mation which affect eligibility.

FRED

The Intake Investigation Referral process is known as FRED. FRED referrals allow fraud to be identified before issuing benefits, increasing the accuracy of issuance. The early referral process may also limit the dollar amounts of potential client overpayments. An investigation request shall be treated as a FRED investigation if received by the SIU within 45 days of the date of application for CAlWorks and/or within 30 days of the date of a CalFresh application if resulting from an indication that a false statement or omission has been made in the course of the application.

For the processes and procedures for FRED referrals, refer to Intake Investigation Referrals (FRED).

Medi-Cal only case referrals are not processed by the Special Investigations Unit. Medi-Cal Early Fraud Detection/Prevention referrals are made by completing the "Confidential Medi-Cal Complaint Form" (MC 609). Investigators from the DHCS Investigations Branch in Sacramento process fraud referrals on Medi-Cal cases. Refer to Initiating A Referral.

Other Fraud Referrals

For fraud referral procedures that are outside of the FRED referral process, refer to Suspected Employee Fraud Referral and General On-Going Fraud Referral for more information. As with FRED referrals, these processes and procedures apply to all aid programs.

Refer to CWES Handbook, “CWES Fraud Referrals,” page 38-1 for the appropriate procedures for CWES fraud referrals.

NOTE: To refer suspicious EBT activity from a vendor/retail, contact the Welfare Fraud Tip line at (408) 755-7174 or send an e-mail to the SIU mail box: siufraudreferrals@ssa.sccgov.org

Pre-Referral Requirements

Referrals to the SIU for FRED or General on-going fraud investigation are to be initiated when there are reasonable grounds for suspicion as part of the EW's role in the prevention and detection of fraud. Prior to making a referral to the SIU for investigation of potential fraud, the EW must review all information to determine if they have reasonable grounds for suspicion of fraud:

Analyze whether or not the information received is logical in this situation.
Check for the consistency of statements contained in eligibility documents and other information provided by the client.
Pursue inconsistencies and incongruities in the applicant’s/recipient's statements. Allow the applicant/recipient an opportunity to clear up what may turn out to be a simple misunderstanding without harassment and loss of dignity. It is only when a reasonable or credible explanation is not forthcoming that the EW shall take further action.
Recognize and act on unexplained discrepancies. A denial of the allegation by the client is not always a resolution of the discrepancy. All inconsistencies and discrepancies must be clarified by the EW.
Make third-party contacts to properly assess a situation, if appropriate. If the client is unable to secure the specific information/verification, the EW must obtain a signed “Authorization for Release of Information” (CSF 13) or the shelf stock form “Release of Information” (SCD 1029) and secure the required information.

This is normally as far as the EW can go in the detection process. If the issue remains questionable or unresolved, a FRED or General on-going fraud referral must be made. It is strongly suggested that the EW consult and maintain open communication with their EW Supervisor, along with the SIU Investigators during the process.

Following each step in the detection process is essential to the successful evaluation of potential fraud. When proper procedure has been followed, erroneous referrals, based solely on eligibility problems or administrative errors, are avoided.

When to Refer

The EW is to refer the case for investigation when:

A fraud alert appears on the CalWIN Display Alert Summary window, or
The information provided by the client is clearly inconsistent or in conflict with other information known to the agency, and the EW is unable to resolve this inconsistency or conflict with an explanation from the client or a third party contact.

Note: A denial of the allegation by the client is not always a resolution of the discrepancy and may require a referral to a SIU Investigator for follow-up.

Refer to Intake Investigation Referrals (FRED) and General On-Going Fraud Referral for the appropriate referral processes and procedures.

Possible Criteria for FRED/General On-Going Fraud Referral

The criteria in this section are listed to help the EW determine if a FRED/General On-Going fraud referral is appropriate. If in doubt, the EW should discuss the situation with their supervisor or SIU Supervising Welfare Fraud Investigator. Although the criteria listed are not always an indication of fraud, they should cause the EW to consider whether a referral may be necessary based on reasonable grounds for suspicion of fraud.

Note: When more than one of these criteria is applicable to the case situation, this may be grounds to make a referral.

Absent Parents

The father(s) of any of the child(ren) for whom aid is requested is unknown.
The whereabouts of any of the absent parent(s) is unknown.
The applicant/recipient has not cooperated with the LCSA at any time in the past.
The absent parent’s child(ren) was conceived while the family was on CalWORKs.
There is a history of marital separation when the unemployed parent becomes employed.
There is a lack of information or conflicting information regarding the absent parent.
An applicant is reapplying for aid within three months of discontinuance, claiming absent parent deprivation and the reason for the previous discontinuance was the employment of the absent parent who returned to the home.
The applicant/recipient doesn't know the names of the schools the children attend.
The mother claims she knows nothing about the absent parent (other than his name), but he is the father of more than one of her children.
The client is living with relatives of the absent parent.

Changes in Residence

A request for Homeless Assistance (HA) is suspicious (e.g. the client moves out and into the same residence).
The applicant/recipient recently moved from another county or state and there is conflicting information about the client's situation.
More than one client receives aid at the same address and the applicant/recipient fails to disclose this information.

Identification/Documentation

Identification provided by the applicant/recipient appears to be false.
The applicant/recipient presents documentation which does not appear authentic (e.g. questionable handwritten documents or questionable birth documentation).

Other

There was a prior founded public assistance fraud referral.
The applicant's/recipient's expenses are substantially greater than their income.
The applicant/recipient gives vague answers or inconsistent answers.

The above criteria are not all-inclusive. If other information leads the EW to suspect fraud, a FRED/General On-Going Fraud Referral should be made.

SIU Investigations

When reasonable grounds for fraud have been established and a referral to SIU has been made, SIU staff will use available resources to make the fraud determination.

Primary Investigation Resources

SIU staff have access to wage and income data supplied by the Income and Eligibility Verification System (IEVS), including:

EDD matches (UI/DI)
IFD
IRS
MEDS
The Work Number.

SIU is authorized to use the EDD/DI service which provides wage, unemployment, and DI data. SIU must utilize the IEVS, MEDS, The Work Number, and other investigative sources prior to requesting the EDD UI/DI information.