I-1-3-15.Adjudicating Fraud or Similar Fault Issues
Last Update: 6/25/14 (Transmittal I-1-75)
The information in this section applies when an adjudicator is deciding an issue of fraud or similar fault regarding evidence in a specific claim(s). If an Office of Disability Adjudication and Review (ODAR) employee or adjudicator observes action that may constitute fraud, the employee or adjudicator must refer to the applicable provisions in Hearings, Appeals and Litigation Law (HALLEX) manual I-1-3 to refer the matter to the Office of the Inspector General (OIG).
Additionally, when specifically identified by the Social Security Administration (SSA), this section does not apply to OIG referrals of information pursuant to section 1129(l) of the Social Security Act or information from a criminal prosecutor with jurisdiction over potential or actual related criminal cases. When SSA receives information regarding an individual or multiple individuals pursuant to section 1129(l) of the Social Security Act, SSA must use the redetermination procedures, as explained in HALLEX I-1-3-25.
The main difference between “fraud” and “similar fault” is that fraud requires an intent to defraud, whereas similar fault does not.
Adjudicators must be careful to distinguish fraud or similar fault from allegations and statements that lack persuasiveness. Statements and allegations that are not persuasive may be the result of a misunderstanding, confusion, or nervousness, with no intent to knowingly mislead or defraud.
1. Definition of Fraud
Fraud exists when a person either makes or causes to be made, with intent to defraud, a false statement or misrepresentation of a material fact, or conceals or fails to disclose a material fact for use in determining rights to Social Security or Supplemental Security Income benefits.
“Material” is used to describe a statement or information, or an omission from a statement or information, that could influence SSA in determining entitlement to monthly benefits under title II or eligibility for monthly benefits under title XVI of the Social Security Act.
Adjudicators must distinguish between the definition of fraud used by SSA in administrative proceedings (as defined above) and the general use of “fraud” in the criminal context. Generally, criminal “intent to defraud” is established only when an involved party pleads guilty or is convicted of a criminal offense involving fraud in connection with the claim under consideration. For SSA's administrative purposes, it is not necessary for a party to admit guilt or to be convicted of a crime before the fraud standard may be used.
2. Definition of Similar Fault
Similar fault occurs when a person (i.e., claimant, representative, medical provider, or any other individual):
Knowingly makes an incorrect or incomplete statement that is material to the determination or decision; or
Knowingly conceals information that is material to the determination or decision.
“Knowingly” is used to describe how a person acts in furnishing information that he or she knows is false or incomplete. “Knowingly” does not mean a person “should have known” that a statement material to the determination or decision was incomplete or inaccurate, or that material information was being concealed. See Social Security Ruling (SSR) 16-2p, Titles II and XVI: Evaluation of Claims Involving Similar Fault in the Providing of Evidence.
“Material” is used to describe a statement or information, or an omission from a statement or information, that could influence the Social Security Administration (SSA) in determining entitlement to monthly benefits under title II or eligibility for monthly benefits under title XVI of the Social Security Act. See SSR 16-2p, Titles II and XVI: Evaluation of Claims Involving Similar Fault in the Providing of Evidence.
C. Standard of Proof
When adjudicating fraud and similar fault issues, the adjudicator will use the preponderance of the evidence standard. A “preponderance of the evidence” means that after considering the evidence as a whole, the existence of the fact to be proven is more likely than not. See 20 CFR 404.901 and 416.1401.
A similar fault finding can be made only if there is reason to believe, based on a preponderance of the evidence, that the person committing the fault knew that the evidence provided was false or incomplete. A finding of similar fault may not be made based on speculation or suspicion. See SSR 16-2p.
D. Considering Evidence
Under sections 205(u) and 1631(e)(7) of the Social Security Act, evidence must be disregarded if there is reason to believe, based on a preponderance of the evidence, that fraud or similar fault was involved in the providing of the evidence.
Except in circumstances where an adjudicator has been directed to disregard evidence (see HALLEX I-1-3-25), an adjudicator will use the similar fault standard when deciding whether to disregard evidence. This is because the issue of fraud involves the complex subordinate issue of intent to defraud, and that issue generally does not need to be evaluated to determine whether to disregard evidence. Detailed procedures regarding considering evidence within ODAR are set forth in HALLEX I-2-10 and I-3-10.