(a) The term fraud is defined as an intentional false representation of a truth or matter of fact, whether by words or conduct, false or misleading allegations, or concealment of that which should have been disclosed, for the purpose of inducing another to part with something valuable or surrender a legal right.  The penalty for fraud is provided in the Oklahoma Social Security Act, Section 185 of Title 56 of the Oklahoma Statutes.  Under the statutes, only courts can determine guilt and impose a legal penalty.

(b) The Family Support Services Division (FSSD) Benefit Integrity and Recovery Section (BIRS) staff refers household error overpayments of $500 or more to the Office of Inspector General (OIG) for a determination of fraud and whether judicial court action is feasible.  • 1

(c) Workers make a referral directly to OIG using Form 19MP001E, Referral Form, when there is not sufficient information to calculate an overpayment or it involves a state employee or his or her relatives.  OIG staff submits their findings to FSSD BIRS for final calculation and establishment of the overpayment.

(1) Overpayments classified as fraud are overpayments that have been referred for judicial prosecution or administrative disqualification hearing and, as a result, have been determined as fraudulent or when the client signs Form 08OP016E, Administrative Disqualification Hearing Waiver, or Form 19MP002E, Disqualification Consent Agreement.  Clients with overpayments classified as fraud are subject to the actions described in (A) through (C) of this paragraph.

(A) Notification.  Program Penalty/Disqualification Notice is sent to the penalized Temporary Assistance for Needy Families (TANF) client.  The notice informs the TANF client of a 25% payment standard reduction penalty.

(B) Penalty period.  A TANF client is penalized with a 25% payment standard reduction for 12 months for the first violation, 24 months for the second violation, and permanently for the third violation.

(C) Penalty effective date.  The 25% payment standard reduction penalty begins the date shown on the notice.  Once the payment standard reduction penalty begins, it runs continuously until the end of the period imposed.

(2) If the case is prosecuted, OIG notifies the human services center (HSC) and the FSSD BIRS of the disposition of the case.  If the court finds the client guilty, the court may order a fine, restitution, imprisonment, or any combination of the three.  The Oklahoma Department of Human Services (OKDHS) abides by the court decision.  • 2

(3) Court-ordered restitution does not relieve the client of any overpayment amount in excess of that judgment.

(A) If the client defaults on court-ordered restitution, the sentence may be accelerated.

(B) If the sentence is accelerated and the client serves a prison term, serving the prison term does not satisfy repayment of the monetary portion of the debt.  At that point the debt may be subject to civil prosecution.

(C) The fact that a client is making restitution payments does not relieve the client of the obligation to sign Form 08OP002E, Affidavit of Acknowledgment of Indebtedness.  Home property and personal property are exempt from this process.  A lien may also be filed on declared real property if Form 08OP002E indicates property is owned.  • 3

(4) If OIG releases the case without a court decision or Form 08OP016E signed by the client, the FSSD BIRS staff proceeds to collect the debt.  In some instances, OIG discovers additional information that affects the overpayment.  The OIG gives this information to the FSSD BIRS so staff can adjust the overpayment.