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M21-1, Part III, Subpart vi, Chapter 5, Section A – Fraud

Overview


In This Section

This section contains the following topics:
Topic
Topic Name
1
2
3

1.  General Information on Allegations of Fraud


Introduction

This topic contains general information on allegations of fraud, including

Change Date

July 25, 2018

III.vi.5.A.1.a.  Definition:  Fraud

Fraud occurs when facts are intentionally misrepresented or withheld in the interest of obtaining or retaining Department of Veterans Affairs (VA) benefits.
The table below describes types of fraudulent acts.
Type of Fraudulent Act
Description
ommission
Occurs when an individual knowingly makes or causes to be made, conspires, combines, aids, or assists in, agrees to, arranges for, or in any way procures the making or presentation of a false or fraudulent certificate, statement, voucher, or paper concerning any claim.
omission
Occurs when an individual who is entitled to or receiving benefits fails to provide information and all of the following are true:
  • The individual has knowledge of the facts on which eligibility for or entitlement to the benefits is based.
  • The individual had knowledge of a change in circumstances and knew that such change could affect entitlement or eligibility.
  • The individual chose not to notify VA of the change in circumstances with the actual intention of
    • receiving or obtaining benefit payments, or
    • retaining increased benefit payments.
  • The individual received or retained benefit payments or increased benefit payments as a result of the intentional failure to disclose the change in circumstances.
Reference:  For more information on the definition of fraud, see

III.vi.5.A.1.b.  Policy for Disclosing Information on Cases of Fraud

Limit the sharing of information regarding allegations and referrals of cases of fraud to those individuals having a need to know.  Secure pertinent records to prevent tampering or loss.

2.  Handling Cases of Fraud


Introduction

This topic contains information on handling cases of fraud, including

Change Date

July 25, 2018

III.vi.5.A.2.a.  Types of Cases to Refer to OIG

In certain areas, local Office of Inspector General (OIG) regional field offices provide locally-determined guidelines to VA regional offices (ROs) in their jurisdiction for referring cases of fraud.
If there are no locally-determined guidelines, refer all cases of fraud to OIG.
Exception:  Unless local agreements specify, do not refer cases in which the
  • overpayment attributable to fraud is less than $10,000, or
  • initial act of alleged fraud was committed more than five years prior to the current date.
Reference:  For more information on OIG regional field offices, see M21-1, Part III, Subpart vi, 5.A.3.

III.vi.5.A.2.b.  Procedure for Handling Cases in Which a Fraudulent Act Might Have Occurred

Follow the steps in the table below after making a preliminary decision that a fraudulent act might have occurred.
Step
Action
1
Prepare a notice of proposed adverse action that notifies the beneficiary or fiduciary of
  • the proposed adjustment, including the
    • revised rates, and
    • dates of payment
  • the reason for the adjustment
  • his/her right to present evidence to rebut the evidence serving as the basis for the proposed adjustment
  • the 60-day period, which begins on the date of the notice, for submitting evidence to show why the adjustment should not be made
  • his/her right to representation and a personal hearing, and
  • the fact that if VA receives a request for a hearing within 30 days of the date of the notice, VA will continue paying benefits at the present rate until the hearing is held and the testimony is reviewed.
Important:  Avoid any mention of fraud in the notice of proposed adverse action.
Note:  Provide the OIG regional field office with a copy of the notice of proposed adverse action.
References:  For more information on
2
Establish a suspense date that is 65 days from the date of the notice of proposed adverse action.
3
Did VA receive evidence within the 65-day period that would change the decision to adjust the beneficiary’s award?
  • If yes,
    • make any necessary adjustments to restore the award to its original state, and
    • take no further action.
  • If no, go to the next step.
4
Amend the award for the appropriate periods under 38 CFR 3.500(k), effective the beginning date of the award or the day preceding the date of the fraudulent act, whichever is later.
Note:  Use the reason Fraud for each award adjustment resulting from fraud.
Reference:  For more information about adjusting an award for a fraudulent act, see the
5
Refer the case to OIG, citing beneficiary or fiduciary fraud under 38 CFR 3.901 or 38 U.S.C. 6102.
Exception:  Do not refer a case to OIG when the forfeiture of benefits is at issue.
Important:  Refer cases to OIG only after completing development and making any necessary award adjustments.
References:  For more information on
6
  • Notify the finance activity in writing after the award is authorized to prevent any collection action from taking place, citing the following information:
    • M21-1, Part III, Subpart vi, 5
    • the file number
    • the payee number
    • the beneficiary’s name, and
    • the date of the award adjustment.
  • Select and append the OIG Case corporate flash in Share.
  • Add the following system note:  Fraud referral to OIG.  Coordinate with OIG if waiver request is received.
Note:  The beneficiary or fiduciary retains all rights, including the right to request a waiver of any overpayment which may result from the adjustment.
Reference:  For more information about selecting and appending corporate flashes in Share, see the Share User Guide.
7
Send a decision notice to the beneficiary or fiduciary that meets the requirements set forth in M21-1, Part III, Subpart v, 2.B.
Important:  In the decision notice, do not
  • reference the right to request a waiver, or
  • discuss collection of any debt arising from the adjustment.
8
  • Establish end product (EP) 330 with a suspense date that is the first workday following a 60-day period that begins on the date of authorization of the award adjustment.
  • After the suspense date passes, check the status of the OIG referral.
9
Did OIG respond within the 60-day suspense period?
  • If yes, proceed to the next step.
  • If no,
    • assume OIG will not pursue the case
    • instruct the finance activity to start collection action on the case
    • clear the pending EP 330, and
    • take no further action.
10
Did OIG indicate it will pursue the case?
  • If yes, go to the next step.
  • If no,
    • instruct the finance activity to start collection action on the case
    • clear the pending EP 330, and
    • take no further action.
11
  • Refer the claims folder to OIG.
  • Update the suspense date to one that is
    • consistent with OIG’s tentative date for resolution of the case, but
    • not more than six months in the future.
Note:  If final action is not completed within the six-month period,
  • contact OIG to ensure that control of the claim has not been lost
  • update the suspense date, not to exceed six months in the future, and
  • follow up with OIG every six months, updating the suspense date as needed.

III.vi.5.A.2.c.   Referring a Case of Fraud to OIG

The table below describes the stages in the process for referring a case of fraud to OIG.
Stage
Who Is Responsible
Description
1
authorization activity
Uses Optional Form 41Routing and Transmittal Slip, plain bond paper, or a locally-developed fraud referral worksheet or memorandum to summarize the facts of the fraudulent claim, including
  • the identities of individuals involved, as well as possible witnesses
  • a description of the alleged violation or fraudulent activity, including the date, time, and location, if known, and
  • an estimate of the corresponding overpayment.
Notes:
  • Referrals should include, if available, the Social Security numbers of individuals involved and possible witnesses.
  • In the absence of a local agreement to the contrary, do not routinely refer the claims folder to OIG at the time of the initial fraud referral.
  • In unusual situations requiring immediate action, oral referrals may be made; however, these must later be confirmed in writing.
  • In any case involving multiple allegations, make a separate referral for each allegation, with each allegation cross-referenced to the other. (Example:  Employee aids a claimant in submitting a fraudulent claim.)
2
Veterans Service Center Manager, Pension Management Center Manager, or designee
Contacts the OIG regional field office of jurisdiction to make arrangements for OIG to review the case to determine whether investigation and prosecution is warranted.
Reference:  For more information on determining which OIG regional field office to contact, see M21-1, Part III, Subpart vi, 5.A.3.a.
3
OIG agent
Indicates which documents need to be copied for use by OIG and the U.S. Attorney.
4
Inspector General
Notifies the RO Director within 60 calendar days as to whether he/she will pursue the case for prosecution.

III.vi.5.A.2.d.  Cases of Fraud Involving CO or RO Employees

Use the table below to determine where to send additional copies of referrals for cases of fraud involving
  • Central Office (CO) employees
  • RO employees, or
  • fiduciaries.
If the case involves a(n) …
Then forward a copy of the referral to …
CO employee
General Counsel (02)
810 Vermont Avenue, NW
Washington, DC 20420
  • RO employee, or
  • fiduciary
  • Office of Field Operations (OFO) (201), and
  • Regional Counsel (02).
Note:  OFO may require that copies or summaries of referrals of false statements or claims be forwarded to CO.

3.  OIG Regional Field Offices


Change Date

May 22, 2015

III.vi.5.A.3.a.  OIG Regional Field Offices

Use the table below to determine which OIG regional field office to contact to review cases to determine whether investigation and prosecution for fraud is warranted.
Location
Regional Field Office
  • Connecticut
  • Delaware
  • Maine
  • Massachusetts
  • New Hampshire
  • New Jersey
  • New York
  • Eastern Pennsylvania
  • Rhode Island
  • Vermont
Office of Inspector General
Criminal Investigations Division
Northeast Field Office (51NJ)
20 Washington Place, Room 316
Newark, NJ 07102
Telephone: (973) 297-3338
  • District of Columbia
  • Maryland
  • North Carolina
  • South Carolina
  • Virginia
  • West Virginia
  • Western Pennsylvania
Office of Inspector General
Criminal Investigations Division
Mid-Atlantic Field Office (51WA)
P.O. Box 27387
Washington, DC 20038
Telephone: (727) 319-1215
  • Alabama
  • Florida
  • Georgia
  • Kentucky
  • Tennessee
  • Puerto Rico
Office of Inspector General
Criminal Investigations Division
Southeast Field Office (51SP)
P.O. Box 446
Bay Pines, FL 33744
Telephone: (727) 319-1215
  • Colorado
  • Illinois
  • Indiana
  • Iowa
  • Kansas
  • Michigan
  • Minnesota
  • Missouri
  • Nebraska
  • North Dakota
  • Ohio
  • South Dakota
  • Wisconsin
  • Wyoming
Office of Inspector General
Criminal Investigations Division
Central Field Office (51CH)
P.O. Box 1454
Hines, IL 60140
Telephone: (708) 202-5199
  • Arkansas
  • Louisiana
  • Mississippi
  • Oklahoma
  • Texas
Office of Inspector General
Criminal Investigations Division
South Central Field Office (51DA)
4040 N. Central Expressway, Suite 500
Dallas, TX 75204
Telephone: (214) 253-3360
  • Arizona
  • Southern California
  • Hawaii
  • Idaho
  • Montana
  • Southern Nevada
  • New Mexico
  • Utah
Office of Inspector General
Criminal Investigations Division
Western Field Office (51LA)
P.O. Box 241516
Los Angeles, CA 90024
Telephone: (310) 268-4269
  • Alaska
  • Eastern California
  • Central California
  • Guam
  • Hawaii
  • Idaho
  • Montana
  • Northern Nevada
  • Oregon
  • Philippines
  • Washington
Office of Inspector General
Criminal Investigations Division
Northwest Field Office (51SF)
1301 Clay Street, Room 1610N
Oakland, CA 94612
Telephone: (510) 637-6360
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