Common-Place Handbook page 38-1 Fraud

Common-Place Handbook page 38-1 38. 38.1 General Information 38.1.1 Definition of 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. 38.1.2 Prevention To reduce the chance of fraud in all aid programs, the EW must: STEP INTAKE EW ACTION 1. Inform the applicant/recipient of what information is needed to determine eligibility and why that information is needed. 2. Review the rights and responsibilities for the program(s) with the applicant/recipient. 3. Explain to the applicant/recipient their responsibility to promptly report correct and complete information to the EW. 4. 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. ) 5. Advise the applicant/recipient of the criminal penalties for making false statements or failing to report information which affect eligibility. Update # 15-23 Revised: 10/15/15

page 38-2 38.1.3 FRED Common-Place Handbook The Intake Investigation Referral process is known as FRED, which is an acronym for Early Detection. 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 Special Investigation Unit (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), page 38-6. Medi-Cal only case referrals are not processed by the Special Investigations Unit. Medi-Cal Early Detection/Prevention referrals are made by completing the Medi-Cal Early Detection Program" (SCD 2340). Investigators from the Department of Health Care Services (DHCS) Investigations Branch in Sacramento process fraud referrals on Medi-Cal cases. [Refer to Initiating A Referral, page 38-7.] 38.1.4 Other Referrals For fraud referral procedures that are outside of the FRED referral process, refer to Suspected Employee Referral, page 38-15 and General On-Going Referral, page 38-11 for more information. As with FRED referrals, these processes and procedures apply to all aid programs. [Refer to CWES Handbook, CWES 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 Tip line at (408) 755-7174 or send an e-mail to the SIU mail box: siufraudreferrals@ssa.sccgov.org 38.1.5 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: Revised: 10/15/15 Update # 15-23

Common-Place Handbook page 38-3 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. 38.1.6 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. Update # 15-23 Revised: 10/15/15

page 38-4 Common-Place Handbook 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), page 38-6 and [Refer to General On-Going Referral, page 38-11 for the appropriate referral processes and procedures. 38.1.7 Possible Criteria for FRED/General On-Going 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 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 Local Child Support Agency (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. Revised: 10/15/15 Update # 15-23

Common-Place Handbook page 38-5 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 Referral should be made. Update # 15-23 Revised: 10/15/15

page 38-6 Common-Place Handbook 38.2 Intake Investigation Referrals (FRED) 38.2.1 Overview The intake investigation referral process is known as Early Detection (FRED). It is primarily used by intake workers, a FRED referral may also be initiated by a continuing worker in many circumstances. For example, the continuing worker should initiate a FRED referral if there are reasonable grounds for suspicion of fraud when adding a program to an existing case or restoring benefits when the client reapplies within one month of discontinuance. The primary intent of the FRED program is to discover fraud before the applicant is granted any type of assistance (i.e. to stop fraud before it happens). In addition, it is believed that FRED will reduce the number of overpayment/overissuance calculations and collections. Referrals for early fraud investigations on Medi-Cal only cases at the point of Intake, are not processed by the SIU investigative staff. Medi-Cal only referrals are done using the Medi-Cal Early Detection Program (SCD 2340). These referrals are processed by Investigators from the Department of Health Care Services (DHCS) Investigations Branch in Sacramento. [Refer to Overpayment Rules, page 65-3 of the Medi-Cal handbook for detailed information regarding the process of MC overpayments.] 38.2.2 Prior to Referral Prior to making a referral to FRED, the EW must refer to Pre-Referral Requirements, page 38-2, When to Refer, page 38-3, and Possible Criteria for FRED/General On-Going Referral, page 38-4. This ensures that the referral is appropriate based on reasonable suspicion and prevents erroneous referrals that based solely on eligibility problems or administrative errors. 38.2.3 Time Frames A referral to FRED should be made immediately and prior to completion of the application or prior to the granting of benefits. The SIU shall investigate these cases on a priority basis in order to resolve any questions of possible fraud in time to allow the county to complete the determination eligibility with the time limits Revised: 10/15/15 Update # 15-23

Common-Place Handbook page 38-7 imposed upon the particular program. The information concerning a referral to the SIU shall not be disclosed to any unauthorized persons. Investigators are to be allowed five (5) days from the receipt of the referral to complete a FRED investigation. SIU will have three days (72 hours) to complete the FRED investigation, if a client is eligible for CalWORKs Immediate Need (IN), Homeless Assistance (HA), CalFresh Expedited Service (ES), or Medi-Cal Immediate Need (client is pregnant or needs immediate medical care). It is not intended that a FRED referral delay the eligibility determination process. However, a delay of one to two days in the approval and issuance of benefits may occur in certain situations, based on EW Supervisor or manager approval. 38.2.4 Initiating A Referral There are two methods that may be used to initiate a FRED referral. If the referral is for... Then the EW must... CalWORKs, General Assistance, IHSS, CalFresh or Child Care, Make an on-line referral via the CalWIN Client Referral subsystem. a. Select from the Need drop-down table [ - FRED referral]. b. For provider select, Special Investigation Unit (SIU) Document on the Maintain Case Comments window that a FRED referral was initiated. Medi-Cal only, Complete the Medi-Cal Early Detection Program (SCD 2340) form. Attach any supporting documents and either e-mail or fax them along with the SCD 2340 to DHCS Investigations Branch: -e-mail: Deanna.nelson@dhcs.ca.gov -Fax: (916) 440-5343 Document on the Maintain Case Comments window that a Medi-Cal fraud referral was initiated. Submit a copy of the referral for IDM scanning following District Office procedures. Note: If the fraud investigator requires any additional information, he/she will contact the EW. The EW must take immediate action to comply with the Investigator s request. Update # 15-23 Revised: 10/15/15

page 38-8 38.2.5 EW Action - Pending Investigations Common-Place Handbook After the referral for investigation is made, the Intake EW is expected to reply promptly to requests for case information from the Investigator and continue to take action as follows: IF IT IS DETERMINED THAT: The applicant is ineligible and the investigation is still pending, Apparent eligibility for CalWORKs exists and the applicant meets the specific requirements for Immediate Need (IN), Apparent eligibility for CalWORKs exists and the applicant meets the specific requirements for Homeless Assistance (HA), Apparent eligibility for CalFresh exists and the applicant meets the specific requirements for Expedited Services (ES), Apparent eligibility for Medi-Cal exists and the applicant meets the specific requirements for Immediate Need (pregnant or needs Medi-Cal within two days), THEN... Deny the application, and Inform the Investigator on the same day that the application has been denied. Issue an IN payment, and Inform the Investigator of the IN issuance on the same day the IN is issued. Issue an HA payment, and Inform the Investigator of the HA issuance on the same day the HA is issued. Issue ES benefits, and Inform the Investigator of the ES issuance on the same day the ES is issued. Issue a Benefits Identification Card (BIC), and Inform the Investigator of the issuance on the same day the BIC is issued. The Intake EW must immediately (i.e. no later than the close of that business day) inform the Investigator, either verbally or in writing, of any other case changes relevant to the investigation. For referrals, if the Investigator is unavailable, the EW must contact the SIU Justice System Clerk. Note: It is important for the assigned EW to understand the role of the SIU Investigator. The Investigator's role is NOT to determine eligibility. That is the role of the assigned EW. The Investigator is responsible for confirming or denying the accuracy of the information provided by the applicant in applying for benefits. Revised: 10/15/15 Update # 15-23

Common-Place Handbook page 38-9 38.2.6 Investigator Action - SIU Upon receipt of the FRED referral, the SIU support staff will enter such referral into the SIU database and assign it a SIU case number. The Supervising Welfare Investigator (or designee) will assign the referral to a SIU Investigator. Upon receipt of the FRED referral, the SIU Investigator will: STEP INVESTIGATOR ACTION 1. Notify the EW that the referral has been assigned and ask if there is any change in the situation. 2. Conduct an investigation to gather facts that prove or disprove the allegations. 3. Inform the EW verbally, of the findings of the investigation. 4. Complete an investigation report with all information which supports his/her findings, within 7 working days. Email a copy of the report to the EW and TMT Priority Assignment. 38.2.7 Investigator Action - DHCS Upon receipt of the referral, the DHCS Investigator will: STEP INVESTIGATOR ACTION 1. Conduct an investigation to gather facts that prove or disprove the allegations. 2. Inform the EW via telephone call (within 10 days) of the results of their investigation. 3. Send to the EW (within three days of the telephone call) the Investigator's Report with all information which supports his/her findings. 4. Attach a FRED Eligibility Action Report to the Investigator's Report, for completion by the EW. Update # 15-23 Revised: 10/15/15

page 38-10 38.2.8 EW Action on Completed Investigations Common-Place Handbook Once the investigation is completed a Referral Report will be sent to the client's assigned District Office and TMT to an available EW for action. STEP INVESTIGATOR ACTION 1. Contact the EW and ask if there are any changes in the situation. 2. Conduct an investigation to gather facts that prove or disprove the allegations. 3. Complete the written SIU Referral Report with all information which supports his/her findings/ 4. Sends the completed Referral Report to the applicant s assigned District Office via e-mail. STEP EW ACTION 1. Evaluate the investigation report as it affects case/person eligibility. Seek clarification from the Investigator, if needed. 2. Review all eligibility factors. 3. Attempt to resolve any inconsistencies resulting from the investigation, that may affect eligibility/ineligibility. EXAMPLE: The client applies for CalWORKs for herself and two children based on absence of the children's father. The investigation places the unemployed father in the home. The EW shall contact the client and explore U-Parent deprivation. 4. Take appropriate action to approve, deny or discontinue the case or any ineligible person, and document the action taken on CalWIN Maintain Case Comments window. 5. Send an electronic "-Referral Disposition" referral [Need] response to Special Investigation Unit (SIU) via CalWIN Client Referral System with information on the action taken on the case. For Medi-Cal only cases, complete the "Medi-Cal Early Detection Program" (SCD 2340) and forward it to DHCS 6. Submit the completed investigation report for IDM scanning following District Office procedures. 7. Attach a copy of the investigation report to the referral to the Department of Child Support Services (DCSS), if the information is connected to the Absent Parent referral. If a DCSS referral has previously been made, send a copy of the Investigator's report to DCSS using the SSA/DCSS Communication Form (SCD 1603). Revised: 10/15/15 Update # 15-23

Common-Place Handbook page 38-11 38.2.9 SIU Investigator Disagreement With EW Action IF... The SIU Investigator disagrees with the action taken by the EW, The Supervising Investigator is unable to resolve the issue with the investigator, THEN... The SIU Investigator shall bring the issue to the Supervising Investigator for resolution. The Supervising Investigator will discuss the issue: First, with the EW Supervisor, and then With the appropriate District Office Manager. 38.3 General On-Going Referral 38.3.1 Overview General On-going Referrals to SIU are to be initiated through the CalWIN referral system as part of the EW's role in the prevention and detection of fraud. The intent of the fraud referral process is to facilitate the prompt investigation and possible prosecution of public assistance fraud. Following the processes and procedures contained in this chapter helps ensure that: ulently obtained public assistance benefits are kept to an absolute minimum; and The rights of the applicant/recipient are maintained. [Refer to the Medi-Cal Handbook Chapter 65 - Overpayments, page 65-1] for instructions when an EW discovers a Medi-Cal overpayment. 38.3.2 Prior to Referral Prior to making a referral for General On-Going, the EW must review Pre-Referral Requirements, page 38-2, When to Refer, page 38-3, and Possible Criteria for FRED/General On-Going Referral, page 38-4. This will ensure that the referral is appropriate and that erroneous referrals, based solely on eligibility problems or administrative errors, are avoided. Update # 15-23 Revised: 10/15/15

page 38-12 38.3.3 Evaluation of Information Common-Place Handbook After the eligibility information has been gathered, reviewed and analyzed, the EW must make a number of determinations, based on the available data. Some common determinations which must be made by the EW are: Is the client eligible? If the client is eligible, what is/was the correct amount of benefits? If the client is ineligible or benefits were incorrect, was there an overpayment? If an overpayment has occurred, can it be corrected by grant adjustment or repayment from liquid assets? If an overpayment has occurred, are there reasonable grounds to suspect fraud? 38.3.4 To Refer: Yes or No After the information is evaluated, a decision must be made as to whether there are reasonable grounds to suspect fraud. IF... There is a question as to whether or not there are reasonable grounds to suspect fraud, There are reasonable grounds to suspect fraud, THEN... Consult with your supervisor, and refer, if appropriate. Make an on-line referral via the CalWIN Client Referral subsystem. a. Select from the Need drop-down table [ - General Referral]. Document on the [Maintain Case Comments] window that a General Referral was initiated. The suspected fraud has caused a Medi-Cal overpayment (including CalWORKs cases which also result in Medi-Cal ineligibility) [Refer to Medi-Cal Handbook, Overpayment Referral Procedures, page 65-14] for more information. Revised: 10/15/15 Update # 15-23

Common-Place Handbook page 38-13 38.4 Defense Attorney Requests 38.4.1 Overview The policy of the Special Investigations Unit (SIU) in criminal public assistance fraud cases is to provide the defendant with early and complete discovery (information) of all matters pertaining to the criminal action. The policies and procedures specified in this section have been developed in order to facilitate that process and to ensure that: The defense attorney has full and complete access to pertinent information, AND Any confidential material (e.g. identity of informants, medical history, such as HIV status or abortion history) contained in the case record is not released inappropriately. These policies and procedures apply to defense discovery requests ONLY and in no way impact a client's right to access his/her case record through his/her EW. 38.4.2 Definition A defense discovery request is a request received from a defense attorney to access a defendant's case record after a criminal complaint for public assistance fraud has been filed. 38.4.3 Requirements of Defense Request All requests from defense attorneys MUST: Be in writing; Pertain to the defendant's own case; AND Contain the following information: Case name (defendant's name), Case number, Social security number, Update # 15-23 Revised: 10/15/15

page 38-14 Date of birth, Name, address and phone number of attorney of record, Name, address and phone number of defense investigator, Name of deputy district attorney (if known), and Name of SIU investigator (if known). Be submitted to: Custodian of Records 333 W. Julian Street San Jose, CA 95110 Common-Place Handbook The Custodian of Records for the Department of Employment and Benefits (DEBS) is Mariela Perez, (408) 755-7187. If Mariela is not available, the back-up Custodian of Records is; Olivia Cuevas, (408) 755-7501 or Maria Savin, (408) 755-7523. 38.4.4 Process The chart below describes the process to be followed when a client's defense attorney makes a discovery request for eligibility records. [Refer to CWES Handbook, Defense Attorney Requests, page 38-19 for the CWES process.] STAGE WHO ACTION 1. Defense Attorney 2. Custodian of Records Submits the request to the Custodian of Records. Notifies the Appeals Supervisor and the SIU Supervisor that there has been a request from a defense attorney for access to a case file. NOTE: A copy of the request is to be forwarded to the DA's Office. 3. Appeals Supervisor Assigns the request to an Appeals Worker. Revised: 10/15/15 Update # 15-23

Common-Place Handbook page 38-15 STAGE WHO ACTION 4. Appeals Worker Requests the case file, if applicable, from the district office using the normal case loan procedure. This request will be a priority 1 request. Contacts the defense attorney and schedules an appointment for the attorney to come in and review the case. Reviews the case file and removes all information that is confidential and not related to the criminal case. Sits in the room with the defense attorney while the attorney reviews the case file. Ensures that copies of requested documents, including those in the IDM and/or CalWIN systems, are made and provided to the defense attorney. NO ORIGINAL DOCUMENTS ARE TO BE GIVEN TO A DEFENSE ATTORNEY. NOTE: The defense attorney is to be notified that the charge for copies. The defense attorney may bring (and use) a portable copier to save costs. Ensures that the case is returned to the worker of record. 38.5 Suspected Employee Referral 38.5.1 Definition of Employee Employee fraud occurs when an employee knowingly and willfully: Authorizes or issues benefits to an ineligible person such as to a non-existent client or to a ** friend or family member. Illegally accessed client s benefits through use of the EBT system or checks/warrants. Uses coercion to extort benefits from an applicant or recipient. Reminder: **Friends and family members of employees are considered confidential/sensitive cases and are NEVER to be processed by the employee involved. [Refer to Confidential/Sensitive Cases, page 50-6] Update # 15-23 Revised: 10/15/15

page 38-16 38.5.2 Training Common-Place Handbook All new workers will receive fraud referral training prior to completion of their academy and on-going fraud training will be provided to all workers by the SIU staff on a yearly basis. 38.5.3 Referral Procedure When it comes to the attention of any staff member, that another employee may be committing fraud, the following procedure is to be followed Step WHO Action 1. Staff Member Contacts their assigned District Office SSPM - Be sure to use a private office to ensure confidentiality. The staff member will be advised not to discuss the matter with any other staff member unless authorized to do so. 2. SSPM After conducting a cursory confidential investigation, contacts the Supervising Welfare Investigator if the SSPM believes the allegation is found to have merit of suspected employee fraud. The SSPM must NOT discuss the matter with any other staff members unless authorized to do so. Also notifies the DEBS Director and the Deputy Director for Administration. Remember, the employee has the RIGHT to confidentiality, and -DO NOT discuss the matter with the suspected employee as it may thwart or hinder the SIU investigation. Revised: 10/15/15 Update # 15-23