TN 27 (02-09)

GN 02201.050 Overpayment - Fraud Referral

A. Policy

To avoid weakening any future court case, the FO/PSC must refer a Title II overpayment case involving possible fraud to the Office of the Inspector General (OIG), as explained in Reporting Program Violations – General GN 04111.005. This referral is to be done via the e8551 process discussed in GN 04111.010 (FO) and in GN 04111.025 (PSC) before the debtor is notified of the overpayment.

The OIG reviews the case and decides, within 60 days of the referral, whether to seek prosecution. During the 60-day review period, or if OIG accepts the case for prosecution, SSA does not take any recovery action, including releasing an overpayment notice. After 60 days, if OIG has not notified SSA of a decision, SSA begins the overpayment recovery process by releasing the overpayment notice.

B. Overall process

1. Suspicion of fraud -- SSA referral process

When possible fraud is detected, a fraud indicator is posted to the Recovery of Overpayments, Accounting, and Reporting (ROAR) system and the Special Message field is annotated to show that the case has been referred for fraud.

  • Field office (FO) employees refer cases to OIG via the electronic SSA-8551 (e8551) form. For specific information about how the field office should report program violations, see GN 04110.010. For details on preparing the e855l, see GN 04111.065.

  • TSC employees report potential violations and allegations to OIG following the instruction in the Teleservice Center Operations Guide (TSCOG). See TC 21001.020 Handling Reports of Violations.

  • OCO employees should follow the specialized procedures in GN 04111.045 for referring potential fraud cases.

  • PSC’s have local practices for referring cases to OIG (GN 04111.025). All cases are referred via the electronic SSA-8551 system.

Cease all recovery action once the case is referred to OIG.

2. OIG process

OIG’s role in this process is to conduct an investigation and provide the facts of the investigation to an Assistant US Attorney (AUSA). OIG maintains a database of names and SSNs associated with criminal investigations conducted.

If a case is accepted for prosecution, the OIG agent ensures that the AUSA has all information needed if the case goes to trial (e.g., copies of reports, statements, documents, and witness lists).

If the defendant pleads or is found guilty, the OIG agent prepares a Report of Court Ordered Restitution/Judgment (Form OI-68). The OI-68 contains claimant information, applicable SSNs, contact information, judicial district, and restitution/judgment amount. The agent sends the OI-68 to OIG Office of Investigations headquarters in Baltimore along with a copy of the court order, a fact sheet with information on the conclusion of the investigation, and a copy of the electronic case management screen that shows the amount of restitution entered in the OIG case management system.

OIG reviews the OI-68 for accuracy and sends it to SSA’s Debt Management Section in Philadelphia and to the SSA contact in the region where the court order originated.

3. Department of Justice (DOJ) process

DOJ’s US Attorney’s Office is responsible for enforcement of the collection of criminal debt.

OIG refers the case to the AUSA. The case includes information such as the offender’s name, date of birth, address, SSN, place/dates/nature of offense, and witness information. A senior AUSA is assigned responsibility for determining whether to accept the case for Federal prosecution.

If accepted, the case is assigned to an AUSA to prepare the case for trial. Usually, the AUSA and the defendant’s attorney work out a plea agreement. A plea agreement outlines the amount of restitution ordered and the conditions of repayment. If convicted at trial, the judge includes restitution as part of the defendant’s financial obligation. This information is set forth in a (JCC) Judgment in a Criminal Case.

The U.S. Attorney’s Office (USAO) then forwards the matter to its Financial Litigation Unit (FLU) for enforcement of the JCC. The FLU is the primary contact within the Civil Division of the USAO for restitution cases. The FLU establishes an account using the victim information in the JCC. The FLU can contact the US Attorney’s Victim/Witness Coordinator for any missing victim information.

FLU agents may file liens, garnish wages, attach bank accounts, etc. The FLU communicates with the district courts and reviews debtor payment information to determine if the debtor is in default or delinquent in payment.

The debt in civil cases is collected by a DOJ lockbox system in Atlanta and sent to MATPSC via the Intra-governmental Payment and Collection (IPAC) System.

4. United States Courts process

The US District Courts are responsible for receipting payments in criminal cases from the debtor and disbursing restitution to the victims.

The court uses its copy of the OI-68 to annotate case ledgers so payments can be processed through a specific deposit fund for payments to SSA. Within 15 days of receipt, the court notifies the USAO of each receipt of payment together with the appropriate information relating to payment.

The court deposits payments in a deposit fund account. US Courts have their own disbursing authority. Each of the 94 Federal district courts prints its own checks in-house. Each district establishes a minimum dollar threshold for restitution disbursement—generally ranging from $25-$50.

The disbursement process is highly dependent on local procedures and the information technology systems used. However, the process is standard in how checks are disbursed to victims. The courts disburse restitution on a pro-rata basis based on the amount of restitution owed to each victim. The courts have the option of including a copy of the OI-68 with the restitution check. The courts have the option of including the SSA claim number from the OI-68 on the check.

5. Case returned to SSA after prosecution

OIG returns the original folder to SSA along with the Judgment in a Criminal Case (JCC). The OIG agent sends a copy of the OI-68 to MATPSC and the SSA contact in the region where the case was prosecuted.

MATPSC files the OI-68’s alphabetically in binders. The case is reviewed to see if restitution was ordered.

The SSA regional contact uses the OI-68 to set up the debt on the SSA system and annotates the Special Message field, Modernized Development Worksheet (MDW) (Title II only), and Debt Management System (DMS) remarks with the outcome of the prosecution and any restitution amount. The SSA regional contact periodically reviews the ROAR to see if payments are being made.

Payments received in MATPSC are posted to the debtor’s record unless they do not have sufficient identifying information. If identifying information is inadequate, MATPSC must take manual action to determine the proper record to which the payment should be applied.

C. Procedure

1. When fraud is suspected

When it appears that fraud (as described in Violations of the Social Security Act GN 04105.005) contributed to the creation of, or the amount of, an overpayment, consider whether to curtail or continue development per Developing Violations GN 04110.010.

If payments should be stopped, but fraud development should continue, take the following actions:

  1. When third-party reporting is involved, follow due process procedures in GN 03001.005 and DI 13010.185 before making a determination to terminate or suspend benefits; when first-party reporting is involved, begin at Step b.

  2. At the completion of the due process procedure or when due process is not required, terminate or suspend benefits (unless the beneficiary is entitled to a subsequent period of entitlement) and post the amount of the overpayment to ROAR.

  3. Suppress or intercept the overpayment letter to each beneficiary on the same earnings record whose overpayment was caused by the potentially fraudulent action.

  4. Release the termination/suspension letter explaining the reason for the termination/suspension, offering appeal rights, and informing the beneficiary that he or she will be notified later if there is an overpayment. Do not mention overpayment or waiver rights.

  5. Post an “E” (TC 23E explanation) Protest Code in the BOUD field of the Master Beneficiary Record (MBR) (to suppress recovery follow-up and generate a 90-day alert) (See “How a TC23 Affects ROAR/MBR” SM 00610.307 and “Protest/Stop Recovery Request (PC)” MSOM DMS 006.003).

  6. Post a “P” Fraud Indicator to ROAR for each beneficiary on the same earnings record whose overpayment resulted from the potentially fraudulent action (See “Overpayment Recovery after Fraud Conviction” SM 00610.785, and “Establish Debt” MSOM DMS 002.003).

  7. Annotate the Special Message Field of the MBR:

If payment need not be stopped (because payment has already been stopped or because payment should continue), but fraud development should continue, post the amount of the overpayment to ROAR, then follow “e” through “g” above.

2. Refer for consideration of fraud issue

For consideration of the fraud issues, forward the following to OIG:

  • the file;

  • Single-Copy Folder Reference for each beneficiary fully explaining how the amount of the overpayment was determined;

  • an SSA-573 for each beneficiary, providing the overpayment notice language;

  • the unreleased overpayment notice(s), if generated;

  • any subsequently received material (e.g., outputs documenting repayments, waiver requests).

  • any offer by the suspect to refund the overpayment. See GN 04120.020.

If the case is referred to OIG, update the Special Message to show that the case was referred to OIG.

With the exception of GN 02201.050C.3. in this section, take no further action once OIG has jurisdiction of the case unless OIG approves the action. Take no manual action to reduce the overpayment when the overpaid person becomes re-entitled or the amount of the overpayment is refigured. Notify OIG of the corrected amount and ask what action should be taken.

WAIVER: If a waiver request is received (because the overpayment letter could not be stopped in time or because the overpaid person insisted upon requesting waiver before receiving the overpayment notice), send the request to OIG. Do not input a TC 23W until a decision is made not to prosecute for fraud or prosecution has ended in an acquittal.

3. OIG decision not to prosecute received within the 60-day review period.

If the case is returned because the decision is made not to seek prosecution:

  1. Associate all material with the file;

  2. Remove the “E” Protest Code from the MBR;

  3. Remove the Special Message from the MBR;

  4. Change the Fraud Indicator on ROAR from “P” to “N” for each beneficiary;

  5. Enter the appropriate due process recovery initiation date (DPRD) on ROAR; and

  6. Prepare and release the overpayment notice(s).

NOTE: Automated recovery efforts will begin unless waiver has been requested.

WAIVER: If a waiver request has already been received at the time the overpayment letter is prepared, delete the waiver language from the letter and indicate that the previously filed request will be processed. Input a TC 23W and process the request.

4. OIG decision not returned within the 60-day review period.

When the ROAR diary matures and the decision has not been returned from OIG:

  1. Authorize the release of the overpayment notice;

  2. Inform OIG that recovery efforts will begin;

  3. Request return of the file and diary for follow-up in 30 days;

  4. Follow steps b. through f. above.

NOTE: Automated recovery efforts will begin unless waiver has been requested.

Do not wait to obtain the original file before releasing the overpayment notice when all necessary information was retained.

If the original file has not been returned from OIG by the time the diary matures, request the file again and re-diary for 30 days. The file will be needed if waiver is requested and a personal conference is necessary.

WAIVER: If a waiver request has already been received by the time the overpayment notice is released, delete the language offering waiver and indicate that the previously filed request will be processed.

Input a TC 23W and process the request per Waiver of Recovery – FO Action GN 02201.021. If the request has been associated with the original file, wait for the return of the file.

If OIG so requests, return the file to them after the overpayment notice has been sent and any waiver request is processed. OIG may still pursue prosecution.

5. OIG accepts the case for possible prosecution

If, prior to maturity of the ROAR diary, OIG reports that the case has been accepted for possible prosecution, leave the “E” Protest Code, Special Message, and “P” Fraud Indicator(s) on the MBR.

For the majority of cases accepted, OIG instructs SSA to release the overpayment notice at the time the case is accepted. If the notice is delayed beyond that time, follow-up with OIG 6 months after OIG accepts the case.

If the overpayment notice has been released at the time OIG reports that the case has been accepted for prosecution, enter the “E” Protest Code, Special Message, and “P” Fraud Indicator(s).

WAIVER: If a request for waiver is received after OIG has accepted the case for prosecution, forward the supporting materials to OIG. Do not input a TC 23W.

If the prosecution does not result in a fraud conviction, send the overpayment notice (unless one has already been sent), change the fraud indicator(s) to “N,” input a TC 23W, and process the waiver request.

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GN 02201.050 - Overpayment - Fraud Referral - 02/18/2014
Batch run: 02/18/2014