Overview of Welfare Fraud Charges In California

Intro:

 Both the state of California and the federal government make available means to ensure that low-income households get nutritious food to avoid hunger and malnutrition, such as Cal-Fresh, EBT cards used for SNAP, and SNAP benefits are welfare programs. However, getting benefits when not entitled, or getting more benefits than entitled is welfare fraud. Welfare fraud is a misdemeanor or a felony punishable by fines and jail time.

Elements of Welfare Fraud:

Both individuals and those working for the government may commit welfare fraud. Individuals may receive welfare benefits that they’re not entitled to receive, and those working for the government may abuse their discretion and power and either give or take benefits without authorization. 

Fraud is unlawful gain by use of deception. Like other forms of theft, fraud is used to get something by being dishonest. Unlike other forms of theft, fraud tricks a party into willingly giving something they wouldn’t otherwise give if they knew the truth. Stealing for example, is removing someone’s money clip from his back pocket, but fraud is tricking someone into thinking you work for a charitable organization and taking a donation but putting the money in your own back pocket.

The elements of all welfare fraud are: 1) making a false statement or failing to report important information to get welfare benefits 2) resulting in getting welfare benefits 3) by a person not entitled to receive them.

Fraudulent receipt of welfare benefits by recipients:

Knowingly making a false statement OR failing to report important information:

  • with intent to deceive, in order to gain welfare benefits, continue to receive benefits, or to receive more benefits than one is entitled to receive, is a misdemeanor.

A False statement is a statement that something is a fact when there is reason to believe or know that the statement isn’t true.

Failing to report important information is simply not offering information that someone wants or needs in order to make a sound decision.

For example, it’s a false representation to state that you have six children when you only have two. It’s failing to report information when you’re asked about all your sources of income and don’t mention that you have a part-time job.

. Knowingly applying for benefits multiple times for the same person:

  • to receive multiple benefits at the same time is a felony.

For example: Someone who applies for multiple welfare benefits for him- or herself, but at different addresses, or two divorced parents who live in separate houses and have joint custody, who apply for benefits for the same child as if the child resides solely with either one of them, commit fraud.

Knowingly creating phony people to receive benefits, OR using a fake or stolen identity,

  • to receive benefits, is a felony

For example: using the identity of a deceased relative to enroll in SNAP and Cal-Fresh, or pretending to have recently had a baby in order to receive more benefits.

Knowingly using, transferring, acquiring, or possessing blank authorizations

  • to participate in SNAP, AND not doing so as a low-income household to stave off hunger and malnutrition, is a felony.

Example: An employee at Social Services leaves blank authorization forms on her desk when she goes to lunch. Another person walking by sees them and takes them. They then use these forms to get SNAP benefits.

Knowingly altering, forging, or counterfeiting blank authorizations

  • to participate in SNAP, Cal-Fresh, or to receive an EBT card, AND
  • is not doing so as a low-income household to stave off hunger and malnutrition
  • is a forgery.

Forgery is a type of fraud in which someone creates an imitation of a signature or document in order to deceive.

For example: Someone asks a friend to create a fake form on the computer that looks like a Cal-Fresh authorization form. This person then takes it to the Family Resource Center and tries to use it as proof of entitlement to benefits.

Knowingly using, transferring, selling, buying, or even possessing SNAP, Cal-Fresh, EBT benefits or authorizations

  • and NOT being authorized to have them or use them, OR not using them for the intended purpose of fighting hunger and malnutrition in low-income households.

For example: A convenience store owner allows customers to use SNAP benefits to buy beer and cigarettes by ringing them up as food. Both the customers and the owner are guilty of welfare fraud.

Fraudulently acquiring welfare benefits as a public official:

Specifically for public officials:

Knowingly and intentionally takes funds from: 

  • SNAP, Cal-Fresh, and EBT, That are entrusted to them as part of their official duties, is embezzlement of government funds, which is a felony.

Embezzlement is the unlawful taking of property by a person trusted to take care of it.

For example: A Social Services worker secretly authorizes his friends and family members to receive EBT cards even though they don’t need them.

In a real-life situation, an offense may fall into more than one category, and if so, the offense will be prosecuted under every applicable account.

Penalties:

Knowingly making a false statement or failing to report important information with intent to deceive in order to gain welfare benefits, continue to receive benefits, or to receive more benefits than one is entitled to receive:

If the amount taken is $950 or MORE:
Cal. Welf. & Inst. Code, § 10980(a), (c)(1); Cal. Welf. & Inst. Code, § 11483 Incarceration: up to 6 months
Fine: Restitution and fines up to $500
Other: Probation in some cases
If the amount taken is MORE THAN $950:
Cal. Welf. & Inst. Code, § 10980(a), (c)(2); Cal. Pen. Code §1170(h); Cal. Welf. & Inst. Code, § 11483  Incarceration: 16 months to 3 years in county jail
Fine: up to $5000
Other: Probation in some cases

*If the defendant was previously or is currently convicted of a serious felony, then incarceration may be in state prison instead.

Knowingly applying for benefits multiple times for the same person to receive multiple benefits at the same time, OR knowingly creating phony people to receive benefits, OR uses a fake or stolen identity, OR knowingly using, transferring, acquiring, or possessing blank authorizations to participate in SNAP, AND not doing so as a low-income household to stave off hunger or malnutrition:

If any amount is taken:
Cal. Welf. & Inst. Code, § 10980(b), (c)(1); Cal. Pen. Code §1170(h); Cal. Welf. & Inst. Code, § 11483 Incarceration: 16 months to 3 years in county jail
Fine: Restitution and fines up to $5000
Other: Probation in some cases

*If the defendant was previously or is currently convicted of a serious felony, then incarceration may be in state prison.

Knowingly altering, forging, or counterfeiting blank authorizations to participate in SNAP, Cal-Fresh, or to receive an EBT card, AND not doing so as a low-income household to stave off hunger or malnutrition:

If any amount is taken:
Cal. Welf. & Inst. Code, Cal. Pen. Code §10980(e); Code §1170(h)§, Cal. Pen. Code §473; Cal. Welf. & Inst. Code, § 11483 Incarceration: up to 1 year; possibly 16 months to 3 years if there are previous serious felonies
Fine: Possible restitution

Other: Probation in some cases

*If the defendant was previously or is currently convicted of a serious felony, then incarceration may be in state prison.

Knowingly and intentionally taking SNAP, Cal-Fresh, and EBT funds that are entrusted to you as part of your official duties as a public official or worker:

If any amount is taken:
Cal. Welf. & Inst. Code, §10980(f); Code §1170(h), Cal. Pen. Code §514; Cal. Welf. & Inst. Code, § 11483 Incarceration: 16 months to 3 years in state prison
Fine: Restitution of funds taken
Other: Probation in some cases

*Punishment may be mitigated, or lessened, if the person accused of embezzlement actually willingly pays back what was taken in full.

How Does A Conviction Affect Your Ability to Receive Benefits?

California Department of Social Services governs welfare benefits. Aside from legal penalties, California Department of Social Services may further penalize anyone recipient convicted of welfare fraud, disqualifying him or her welfare benefits and demanding repayment from the individual and his or her household members.

Other Consequences of a Conviction for Welfare Fraud:

Aside from the legal consequences, losing welfare benefits and paying back what was taken, there are consequences to welfare fraud beyond those penalties. Welfare fraud is a financial crime and a crime of dishonesty, with lingering social and economic consequences, such as:

  • Difficulty finding work, especially work in which you’d be trust with money or company finances,
  • Difficulty entering professions, particularly legal and law-related professions,
  • Difficulty obtaining benefits for yourself and your dependents in the future.
  • A charge for welfare fraud is particularly stigmatizing because it’s the taking of what is freely given to those in need; even if you improve your social and economic status, having this on your criminal record makes social mobility more difficult.
  • Your honesty will be suspect, particularly when giving testimonyor when speaking to law enforcement,
  • An embezzlement charge makes you unable to hold public office.
  • A felony conviction for fraud may make you disenfranchised, or unable to vote, if you’re incarcerated in a state prison, on parole from one.

Possible Defenses:

The government has to show evidence of guilt beyond a reasonable doubt, so the defense has raises doubt. The burden of proof is on the government to prove welfare fraud. This means that the government has to prove all the elements of a charge in order to get a conviction. However, the defense only needs to disprove one of the elements of the charge in order to show that the defendant isn’t guilty. Therefore, the best strategy is to focus on raising doubt of the element of which the prosecution has the least evidence.

Welfare fraud is a crime of specific intent, meaning that anyone who commits welfare fraud does so specifically to get welfare benefits they’re not entitled to have. Therefore, it’s an especially good strategy to raise doubt of specific intent to defraud.

You didn’t know you were making a misstatement or omission. In order for the government to prove welfare fraud, it has to prove that a person knowingly did something that made them appear eligible for benefits they weren’t otherwise entitled to get. Accidents and mistakes happen. It’s possible to misstate or omit something accidentally when filling out paperwork or speaking to Social Services.

For example, an adult may honestly mistake the world “household” to mean everyone living in her home, so even though she’s a single woman with no dependents, she includes her two roommates as members of her household and gets more Cal-Fresh allowance because of it.

There was no intent to deceive. One of the elements of fraud is the intent to deceive. The government must prove that you had intent. While receiving more money may seem like all the intent needed, if you intend to deceive Social Services, you do whatever you do with the express purpose to trick them into giving you benefits. However, if there was no intent to trick, then there is no fraud.

For example, a teenager with a drug problem disappears again. Over the next two months, the parents try to get the boy to come back home. During this time, they forget to inform Social Services that he’s not living in their house anymore because they’re assuming he’ll come back any day as he has done in the past, and contacting Social Services wasn’t the first thing on their minds.

Social Services made a mistake, or there was no misstatement of fact on your part. It’s also entirely possible that you didn’t make the mistake, but Social Services did. Social Services is administration made up of people, and people make mistakes.

For example, a woman tells her new social worker that her son is a puppy. The social worker thinks the woman means that her son is literally a dog, not a human. The woman, however, meant that her son was enthusiastic, playful, and friendly. The social worker notices that the woman is getting benefits for herself and a son. She reports the woman for fraud, thinking she’s claiming a pet to get welfare benefits.

There was no failure to report important information. Even if you’re diligent when reporting life or financial changes, that doesn’t always mean that Social Services will record your life change or do so in a timely manner. If you reported any important information in a timely manner, then the burden is on Social Services to record it and make adjustments accordingly.

There was no receipt of welfare benefits, or continued receipt of benefits. If benefits appear to be stolen, but they were not under your possession or control, then you could not have committed welfare fraud. Social Services errors may also show you receiving benefits that you never actually received. If someone steals your identity to receive welfare, they get benefits, but you get the criminal charge.

The benefits were used for their intended purpose. It’s possible to receive benefits lawfully and still have money from other sources for other things, like new shoes when you need them and birthday gifts for your children. If you’re accused of using benefits for ill purposes, showing that you spent the benefits on their intended purpose is good defense. Receipts, EBT statements, grocery lists, and the like can show that the money from welfare benefits was specifically used to buy food.

That the benefits were not misappropriated to individuals not entitled to them. It’s possible that a Social Services worker may allow acquaintances, friends, and family to lawfully receive welfare benefits because they actually need them. It’s entirely possible that in less populated places or in economically challenged communities, the people in Social Services determining benefits and enrolling people and the recipients of benefits know each other or are socially connected in some way.

You didn’t create a forgery, or one with the intent to deceive. You could make a replica of an authorization form, but unlike some crimes of forgery (like making counterfeit money) if you don’t use the authorization with intent to commit fraud, there is no crime. If the authorization form also could not have been construed to deceive, then there is no fraud.

For example, a student in graphic design high school class creates a fake authorization from Social Services addressed to another classmate telling him that he and his “wife” - the 75 year-old English teacher who also works at that school - and their 23 children, are eligible for SNAP benefits.

Collateral Estoppel. Collateral estoppel is a legal concept stating that a party can’t court over, an issue that was previously put to rest in a court of law. If Social Services suspects you of welfare fraud, holds an administrative hearing, and determines that you’re not guilty of welfare fraud, then the government may not prosecute you for the same instance of welfare fraud. Thus, if Social Services already exonerated you for specific instance or instance of welfare fraud, then the government may not pursue criminal charges for those same instances. However, Social Services won’t hold a hearing if you’ve already been formally charged with welfare fraud and the prosecution is pursuing it. 

Strategies for Defense:

The best defense to a charge of welfare fraud is to disprove one of the elements of the charge. However, this may not always be optimal. A good defense weighs many options and takes into consideration the circumstances and needs of the defendant.

Plead down to a lesser charge. Admitting guilt on the condition of pleading down from a felony to a misdemeanor, or to a lesser included defense, can help you face lower penalties or even avoid penalties like jail, probation, and fines. Pleading to a lesser defense to avoid admitting guilt to welfare fraud so you’re not automatically ineligible to receive welfare benefits.

Make a deal with the prosecution. The government ultimately wants to stop crime, if you can offer them something that helps them put an end to a much larger crime, they may be willing to negotiate with you. If you’re not committing welfare fraud alone, and you’re not the person committing the worst or the most welfare fraud, or if you can show there’s someone else central to a much larger fraud, you may be able to trade this information for leniency.

Challenge government misconduct. Both the prosecution and the police have a duty to protect and honor an individual’s rights during all interactions. They may not use any evidence gathered during violation of those rights. Wrongfully gathered evidence can be challenged in court, and a judge may determine that the government can’t use it against you. If the government doesn’t have enough proper evidence to prove all of the elements of a charge, then the government may decide not to pursue it, or the court may not allow you to be prosecuted.   

In the case of an embezzlement charge, pay it back. Restitution isn’t a defense, but if you did embezzle, voluntarily paying back what was taken may sway the court give you a lighter sentence.

Final Thoughts

A welfare fraud charge and conviction could change your life in many ways and have a lasting negative impact on your life as well as the lives of those who depend on you. An experienced criminal defense attorney knows how to handle the various charges, facts, and pleas in a welfare fraud case to ensure the best possible outcome. Call Justin Lo at 562-999-3682 for legal advice from an experienced criminal defense attorney.

References


  1. Cal. Welf. & Inst. Code, §18900.

  2. Cal. Welf. & Inst. Code, § 10980(a).

  3. [People v. Ochoa (1991) 231 Cal.App.3d 1413, 1420 [282 Cal.Rptr. 805].]

  4. Cal. Welf. & Inst. Code, § 10980(a).

  5. Cal. Welf. & Inst. Code, § 10980(b).

  6. Cal. Welf. & Inst. Code, § 10980(b).

  7. Cal. Welf. & Inst. Code, §§ 18900, 10980(d).

  8. Cal. Welf. & Inst. Code, §§ 18900, 10980(e).

  9. Cal. Welf. & Inst. Code, §§ 18900, 10980(f).

  10. Cal. Pen. Code §514.

  11. Cal. Pen. Code §1170(h).

  12. Cal. Pen. Code §1170(h).

  13. Cal. Pen. Code §1170(h).

  14. Cal. Pen Code §513.

  15. See California Dept. of Social Services. “20-300 INTENTIONAL PROGRAM VIOLATIONS IN THE FOOD STAMP 20-300” FRAUD AND SUSPECTED LAW VIOLATIONS RECIPIENT FRAUD. http://www.cdss.ca.gov/shd/res/htm/2cfcman.htm. Last accessed 8/14/2017.

  16. Fed. R. Evid. §609; Cal. Evid. Code §788-

  17. Cal. Pen. Code §514.

  18. Cal. Elec. Code §2101.

  19. [People v. Garcia (2006) 39 Cal.4th 1070, 1074 [48 Cal.Rptr.3d 75, 141 P.3d 197].]: [“A welfare recipient who has been exonerated of fraud charges by the Department of Social Services in an administrative hearing cannot be criminally prosecuted for welfare fraud, because the doctrine of collateral estoppel bars the prosecution from relitigating issues that were determined in the administrative hearing.”]

  20. See California Dept. of Social Services. “20-300 INTENTIONAL PROGRAM VIOLATIONS IN THE FOOD STAMP 20-300.24” FRAUD AND SUSPECTED LAW VIOLATIONS RECIPIENT FRAUD. http://www.cdss.ca.gov/shd/res/htm/2cfcman.htm. Last accessed 8/14/2017.

  21. Cal. Pen. Code §512-513.