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87. What counts as an “intentional program violation” (IPV)?

Fraud does not mean that a person simply made a mistake. Fraud does not mean forgetting to tell the food stamp office something. Fraud is something a person does on purpose that they know is wrong.

The hearing official must find that the household member “committed, and intended to commit, [an] intentional program violation.” [7 C.F.R. § 273.16(e)(6); see also 7 C.F.R. § 273.16(A)(1).]  The redundancy in this language in the federal law emphasizes that the individual must have known s/he was breaking the Food Stamp Program’s rules and not simply known what actions s/he was taking. [See 7 U.S.C. § 2015(b)(1); 7 U.S.C. § 2024(b)(1); Liparota v. United States, 471 U.S. 419 (1985); People v. Ochoa, 282 Cal. Rptr. 805 (App. Dep’t Super. Ct. 1991) (defining welfare fraud as false statements or representations, impersonation or other fraudulent device that results in the obtaining or retaining of aid to which the person is not entitled).]

Food stamp offices should not assume that recipients are dishonest. [Bacon v. Toia, 648 F.2d 801 (2d Cir. 1981), aff’d, 457 U.S. 132 (1982); see also, Edwards v. California, 314 U.S. 160, 177 (1941) (“poverty and immorality are not synonymous” ); see also 7 C.F.R. § 273.16(c); MPP § 20-300.1.] To be safe, a household should report everything anyway.

See the note below, for an extensive litany of cases addressing various “intentional violations” issues in analogous welfare cases.)

To prove that a person committed fraud, the food stamp office must prove that the person:

  • told the food stamp office a lie or something that would mislead it on purpose;
  • purposefully did not tell the food stamp office about or hid facts that had to do with getting food stamps; or
  • did something on purpose that violated the Food Stamp Act, federal regulations or any state law about food stamps so that they household could get, have, use, or give someone food stamps, or EBT cards that the household was not eligible for; or
  • sold an EBT card or food stamps or bought non-food items with food stamps, or used the food stamps to pay for food that had been previously bought on credit, and the person knew this was wrong.

[7 C.F.R. § 273.16 (c); MPP § 20-300.1.]

Examples of court decisions addressing “intentional violation” issues in welfare cases:

Many courts have held that mere failure to report income or other relevant information does not establish an intentional program violation (IPV). There must be evidence of actual intent to withhold the information. See, e.g., United States v. Ward, 575 F.Supp. 159 (E.D.N.C. 1983) (must be a willful concealment of pertinent information to trigger the application of the regulation); Forester v. Ohio Dep’t of Human Servs., No. 96CA24, 1997 LEXIS 4343 (Sept. 22, 1997) (requiring clear and convincing evidence to show failure to report income is an intentional concealment or withholding of facts).

In other cases, courts and hearing officers have refused to find an intentional violation absent evidence that the recipient had been made aware of and understood his responsibility to report income. See, e.g., Frank v. Ohio Dep’t of Human Servs. 673 N.E.2d 653 (Ohio Ct. App. 1996) (more than documentary evidence is needed to prove an intentional program violation); Tay v. Flaherty, 368 S.E.2d 403 (N.C. Ct. App. 1988), cert. denied, 373 S.E.2d 556 (N.C. 1988) (potential changes affecting eligibility need not be reported unless they actually occur); Seggern v. Washington State Dep’t of Soc. And Health Servs., 622 P.2d 1307 (Wash. 1981) (testimony by AFDC recipient sufficient to rebut presumption that recipient acted intentionally where she testified that she had no intention to deceive agency, thought she had complied with all reporting requirements, and was confused as to the precise amount and date of salary payment because of employer’s methods); Martins v. Dep’t of Human Servs., 1991 WL 789751 (R.I. Super.) (plaintiff’s failure to report a bank account held solely in her mother’s maiden name and opened prior to the plaintiff’s move to her parent’s home constituted an innocent failure to disclose due to lack of knowledge); Constantine v. Blum, 432 N.Y.S.2d 254 (App. Div. 1980); Horton v. Blum, 427 N.Y.S.2d 283 (App. Div. 1980).

Where a reporting form is found to be unclear and confusing, the court held that the questioned response to a specific question was not untrue, and thus not an intentional program violation. See Hazelton v. Comm’r of Dep’t of Human Servs., 612 N.W.2d 468 (Minn. Ct. App. 2000). In other cases, courts and hearing officers have refused to find an intentional violation absent evidence that the recipient had been made aware of and understood his responsibility to report income. See, e.g., Garber v. Department of Soc. Welfare, 431 A.2d 469 (Vt. 1981); Pao Ching Chan v. Blum, 427 N.Y.S.2d 621 (App. Div. 1980); Coville v. Blum, 482 N.Y.S.2d 642 (App. Div. 1984) (recipient must be notified that she is obligated to report a change in her income, resources, and other circumstances that may affect the amount of her public assistance grant; and failure to report receipt of income tax refunds, absent such notification, does not constitute substantial evidence of a willful withholding of information); but see MacCormack v. Massachusetts Dep’t of Transitional Assistance, 1996 WL 1186943 (Mass. Super.) (claims of short-term memory loss not credible after cashing both an original and replacement ATP on the same day, and thus an intentional program violation).

In Davis v. Rubin, 828 P.2d 1284 (Hawaii App. 1991), the court found a difference between fraud per se and an IPV. An intentional false or misleading statement, concealment, misrepresentation or withholding of facts could be an intentional program violation that was grounds for disqualification even if it did not result in receiving more food stamps. State v. Williams, 898 P.2d 340 (Wash. Ct. App. 1995), rev’d and remanded, 132 Wash. 2d 248 (1997) (holding that a welfare recipient who failed to report changes in the number of household members and all income resources, due to her boyfriend’s threat of physical abuse, did not receive an intentional overpayment). The defendant must be aware that reporting is required and then fail to do so in order to be guilty of fraud. Frank v. Ohio Dep’t of Human Servs., 673 N.E.2d 653 (Ohio Ct. App. 1996) (recipient’s testimony that she knew she was obligated to notify the agency of her spouse’s income, coupled with documentary evidence, is sufficient to prove that the recipient intentionally made a false or misleading statement, or misrepresented, concealed or withheld facts from the Department of Human Services); People v. McCormick, 173 Misc.2d 268 (N.Y. Sup. Ct. 1997) (holding that welfare fraud is not larceny when recipient was entitled to payments irrespective of the misrepresentation which ordinarily would have rendered him ineligible for benefits). It is not fraud for a recipient to fail to report income or resources in which no one in the household has any legal interest. State v. Wallace, 651 P.2d 201 (Wash. 1982).