TN 16 (09-07)
GN 02604.410 Identifying Sanction Cases
A. Criteria for Identifying Potential Administrative Sanction Cases
Any SSA employee may identify a case where sanctions may apply at any time during the claims process or in post-entitlement situations. Follow the steps in Field Office Procedure for Reporting a Potential Sanction Case (GN 02604.415) concerning referral of possible sanction cases to the Office of Inspector General (OIG).
When a potential fraud situation is uncovered, consider whether the evidence is sufficient to support a finding that the person knowingly made a false statement or omission about a material fact or failed to disclose information so as to warrant imposition of the sanction. Consider all evidence including any physical, mental, educational, or language limitations that the person has. In determining whether a person acted knowingly in making a false or misleading statement or in failing to disclose information, consider, among other things, the significance of the false, misleading, or omitted information in terms of its likely impact on the person's benefits. Base the decision to impose a sanction on the evidence and reasonable inferences that you draw from that evidence, not on speculation or suspicion.
A finding that sanctions are warranted can be based on a number of factors, such as:
inconsistency among statements made or documents submitted;
history of providing incorrect information or failing to report events;
unwillingness of the individual to elaborate on facts;
inconsistency between statements/documents and your observations; and
inconsistency between statements/documents and SSA records.
Fraud exists when a person, with intent to defraud, either:
Makes or causes to be made a false statement or misrepresentation of a material fact for use in determining the rights under the Social Security Act, or
Conceals or fails to disclose a material fact for use in determining rights under the Social Security Act.
NOTE: A finding of fraud is not required to impose an administrative sanction.
Similar fault is involved with respect to a determination if a person knowingly:
Makes an incorrect or incomplete statement that is material to the determination, or
Conceals information that is material to the determination
Material is a term that describes a statement or information, or an omission from a statement or information, that could influence us in determining entitlement to benefits under title II or eligibility for benefits under title XVI of the Act.
3. Determining Knowledge or “Knowingly”
Always use your best judgment to decide whether the evidence in a case is sufficient to support a finding that the person knowingly made a false statement or omission about a material fact, or failed to disclose material information so as to warrant a sanction. In determining whether a person acted knowingly, consider, among other things, the significance of the false or misleading statement or failure to disclose in terms of its likely impact on the person's benefits, and the individual's past history of making false or misleading statements or failing to disclose information. Base the decision to impose a sanction on the evidence and reasonable inferences that you draw from that evidence, not on speculation or suspicion.
Determine whether the person had, or should have had, knowledge of material facts and whether the person knew, or should have known, that the failure to disclose information was misleading. Consider the physical and mental status of the person. In the absence of evidence to the contrary, assume that a claimant has knowledge of all questions included on the application for benefits, including the list of events that must be reported. In addition, it may generally be assumed that a person has knowledge of important aspects of personal and financial situations, such as:
the existence and approximate amount of a bank account;
the existence of other resources;
the address of the residence;
how many people live at the residence;
the existence of relationships;
sources and approximate amounts of income; and
approximate dates of birth or age.
Consider all of the circumstances surrounding the statement or failure to disclose in each case, taking into account any physical, mental, educational, or language limitations (including any lack of facility with the English language) the person has. In evaluating the evidence, consider the individual's:
understanding of, and agreement to comply with, reporting requirements;
knowledge of the occurrence of events that should have been reported;
efforts to comply with the reporting requirements;
understanding of the obligation to return payments not due;
ability (as determined by age, comprehension, education, memory, physical and mental condition, language limitations, etc.) to understand and comply with the reporting requirements;
ability to recognize inconsistencies and evaluate the reasonableness of SSA's actions;
experience in dealing with government agencies;
past history of providing inaccurate information; and
understanding of the technical terminology used by SSA.
If the evidence clearly shows the individual did not understand, the individual could not knowingly make the false or misleading statement or fail to disclose information. Resolve any doubt in favor of the individual.
4. Other Potential Violations
Refer to Detecting Violations (GN 04110.005), Obtaining Evidence in the Development of Violations (GN 04115.005), and Avoiding Common Mistakes in Development (GN 04115.010) for instructions on how similar issues are handled in other potential violation cases.
5. Examples of Situations When Sanctions May Apply
The following are examples, not an inclusive list, of situations in which a finding that the person knowingly provided false or misleading information or failed to disclose material information may be appropriate. It is important to keep in mind that each potential sanction situation is unique and that the outcome of a particular case may be influenced by factors not discussed in the examples.
Making a report that includes a false or misleading statement or omits material information is grounds for a sanction if the report is made on or after 12/14/99.
Failure to disclose material information that would affect benefit eligibility or amounts is grounds for a sanction if the failure to disclose occurred after 11/27/06 and the person knows or should know that the failure to provide the information is misleading.
EXAMPLE 1. After a claim is denied, a person applies for benefits in another office. In the second application, he presents different material information, or omits information, so that the claim will be approved. For example, in an SSI claim he omits a significant resource that was previously reported.
EXAMPLE 2. A person presents altered documents in support of a claim, or uses a document of another individual that she represents as her own.
EXAMPLE 3. After SSA requests that an SSI claimant report all income and resources, he reports one bank account with a balance of $1,000, but fails to report another bank account with a balance of $15,000.
EXAMPLE 4. Someone other than the claimant takes part in a redetermination or a medical examination on behalf of the claimant, while holding himself out to be the claimant. The claimant may also be sanctioned if he or she is aware of the deception.
EXAMPLE 5. A claimant states that she is not working in response to a request for such information, but she has been observed to be working over a period of time that overlaps her report.
EXAMPLE 6. A claimant alleges and exhibits medical impairments when interviewed in a district office, but then is observed to be taking part in activities that are clearly inconsistent with the alleged impairments. For example, a claimant uses a wheelchair or crutches during the interview for an impairment that would limit a wide range of activity, but is observed shortly thereafter to be taking part in vigorous physical activity without the wheelchair or crutches.
EXAMPLE 7. A claimant reports that she is living at an address that, when verified, turns out to be a vacant lot or a location that clearly could not be a residence. The FO then determines that the claimant is living outside of the country. This may constitute either a false statement or failure to report living outside the country.
EXAMPLE 8. A claimant misrepresents or omits information regarding his living arrangement. The claimant asserts that he is living alone after having been advised of the income rules and income deeming at the time of application and again during redeterminations. Based on interviews and field contacts, agency personnel verify information that the individual has not been living alone during the period of time about which these representations were made. It is necessary to determine whether the other person had income in order to determine if the true living arrangement affected eligibility or the payment amount.
EXAMPLE 9. After being placed in suspense for leaving the country for more than 30 days in the past and then regaining eligibility, the SSI recipient again leaves the country for an extended period in excess of 30 days but omits this information when asked during a subsequent redetermination. This is reason for a sanction if leaving the country would have affected the amount or eligibility of a payment.
EXAMPLE 10. A Title II claimant alleges that he has an illegitimate child and claims benefits for that child. Evidence later shows that the claimant is not the father and that he knowingly made a false statement in order to gain additional benefits on behalf of the child.
EXAMPLE 11. A beneficiary tells SSA that she did not receive her original check. SSA issues a second check and the beneficiary cashes both of them. There is evidence indicating that the beneficiary knowingly, falsely stated that she had not received the first check. We may impose a sanction for that false statement. We may also impose a sanction for a failure to report, after 11/27/06, the receipt of a duplicate check if the evidence supports a finding that the person knew or should have known that the failure to disclose receipt of the duplicate check was misleading.
EXAMPLE 12. A person receiving benefits for having a child in care neglects to report that the child intermittently leaves her care if we determine that her benefits would have been affected by not having the child in care.
EXAMPLE 13. A person receiving disability benefits, partially offset because of the receipt of workers' compensation (WC) benefits, neglects to report an increase in the WC payment amount. When the claim was awarded, he was told that any change in the amount of the WC payments should be reported.
EXAMPLE 14. A person receiving disability benefits fails to report that she returned to work. The award letter informed the claimant that future work attempts should be reported.
6. Examples of Situations When Sanctions May Not Apply
EXAMPLE 1. An SSI applicant reports having three bank accounts, but neglects to report a fourth bank account with a comparatively modest balance. These circumstances may be unlikely to support a finding that the person acted knowingly in concealing the existence of the fourth bank account. If, however, the account not mentioned was the one with the highest balance, or if that account would have put the person over the limit for resources, it would be more reasonable to assume that the person knowingly omitted it.
EXAMPLE 2. An SSI recipient fails to report that her spouse moved back into the household. However, the spouse has no income or resources. Since no overpayment is created, there are no grounds for a sanction based on failure to disclose.
EXAMPLE 3. A 35-year old beneficiary has been receiving benefits since age 5. It has been determined that he is incapable of handling his own benefits. However, because he has trouble keeping payees, he has been made his own payee. Because he fails to report that he has worked, he is overpaid. The CR must look at all of the facts and use discretion to determine whether an individual with this type of disability “knowingly” failed to report the work activity.
EXAMPLE 4. A recipient has a small overpayment. The CR needs to use discretion since the less significant the false statement is in terms of its likely impact, the less likely it is that the person knew or should have known it was false.
B. Who Identifies Potential Sanction Cases?
1. Anyone Involved With Processing a Claim or Post-Entitlement Action May Identify a Possible Sanction
Any employee who identifies a potential fraud violation should consider the possibility of imposing administrative sanctions in initial claims and post-entitlement cases for Title II and Title XVI. A sanctionable offense may occur at any time during the claims or post-eligibility process. Sanctions do not apply to potential fraud situations involving applications for Social Security Numbers. Refer cases involving potential sanctions to the servicing FO for the necessary action.
2. OIG-Identified Cases
The Office of Inspector General (OIG) receives potential fraud referrals from a variety of sources. OIG may identify potential sanction cases if, after investigation of a potential fraud violation, it is apparent that administrative sanctions are appropriate, and had not previously been considered.
OIG may also initiate the administrative sanction process as the result of a third party report. Upon completion of the OIG investigation, if the case is declined for criminal and civil prosecution, OIG may refer the file to the Office of the Counsel to the Inspector General (OCIG) for possible imposition of a civil monetary penalty under section 1129 of the Act. If OCIG determines not to proceed under section 1129, the OCIG evaluates the case for possible administrative sanctions and refers the case to the FO, if appropriate.
3. Sanction Determination
After all development and OIG actions are complete, determine whether sanctions apply following instructions in Sanction Determination GN 02604.430.