I-5-6-9.New York (Convicted Beneficiaries; NYCV)
|Plea Agreements of Four Conspirators
|Appeals Council Notice
Issued: March 16, 2018
This Temporary Instruction advises Office of Hearings Operations (OHO) and Office of Appellate Operations (OAO) employees of the instructions for processing certain cases in New York under section 205(u) of the Social Security Act (Act). These instructions relate to plea agreements from four individuals who orchestrated a scheme to assist applicants in submitting applications containing false claims and evidence to the Social Security Administration (SSA) in order to obtain disability benefits. For detailed information about the fraud scheme, see the background section in Hearings, Appeals, and Litigation Law (HALLEX) manual I-5-6-3 II.
These instructions address only those cases in which an individual was convicted at trial of one or more charges relating to fraud or similar fault in the individual's application for benefits. For processing instructions for beneficiaries who were not indicted in the scheme but were referred to SSA by the New York County District Attorney's Office, see HALLEX I-5-6-3 and I-5-6-3A. For processing instructions for beneficiaries who pleaded guilty to collecting unauthorized disability benefits from SSA, see HALLEX I-5-6-4. For processing instructions for beneficiaries whose criminal cases were dismissed without a plea deal or other admission or proof of guilt, see HALLEX I-5-6-8.
This instruction replaces any prior instruction and will be modified as additional information becomes available.
II. Redetermination Procedures
Based on the guilty verdict of the individual beneficiaries, and the guilty pleas of the four principal facilitators and numerous individual beneficiaries, SSA must redetermine under section 205(u) the disability claim(s) for beneficiaries who have been convicted of participating in the fraud scheme.
OAO was provided the name(s) of previously adjudicated cases that require redeterminations under section 205(u) of the Act because the beneficiaries were convicted of participating in the fraud scheme. OAO staff will use the Bureau Protest workload type to establish a new Appeals Council case in the Appeals Review Processing System (ARPS), with the case characteristic “NYCV” (New York Convicted), manually establishing the case if it cannot be reactivated. If it is not already part of the record, OAO staff will add a Possible Fraud or Similar Fault flag in eView or attach the flag to the front of a paper claim(s) file.
Designated reviewers will screen these cases as follows:
Add the plea agreements from the four main conspirators (Raymond Lavallee, Thomas Hale, Joseph Esposito, and John Minerva) to Part B- Jurisdiction Documents/Notices (red tab) of the claim(s) file. (Plea agreements can be found in Attachment 1).
Ensure the claim(s) file contains documentation of the guilty verdict of the individual beneficiary.
Disregard all evidence in the claim(s) file under section 205(u) of the Social Security Act.
B. Notice to Beneficiary
After screening the case, OAO will notify the beneficiary, in writing, that the claim is being redetermined. The Appeals Council notice can be found in Attachment 2. OAO staff will add a copy of the notice to Part E- Disability Related Development (blue tab) of the claim(s) file.
C. Evidence and Marking Issues
Given the particular fact scenario and convictions, SSA expects to receive little, if any, rebuttal evidence from the beneficiaries. In the event the beneficiary protests the planned action or submits rebuttal evidence, adjudicators can request additional guidance through usual management channels as needed.
OAO will generally offer a hearing when:
The favorable decision was issued without a hearing; or
The favorable decision was issued after a minimal hearing where the beneficiary or recipient offered little or no testimony.
Absent unusual circumstances, adjudicators will not conduct additional hearing proceedings to develop the evidentiary record in these cases.
Despite disregarding all evidence in the claim(s) file, adjudicators will retain all the information in the claim(s) file. Adjudicators will ensure that all information is clearly designated as disregarded evidence, even if the information was previously exhibited. In electronic cases, assisting OAO staff will note the information as “DISREGARDED-FSF” in the Note field in eView. In a paper claim(s) file, staff will add “DISREGARDED-FSF” on the first page of the information with the number of pages, and on each subsequent page. To illustrate, a 2-page submission that is disregarded would be marked as follows: page 1 “DISREGARDED-FSF 1/2” and page 2 “DISREGARDED-FSF 2/2.”
If the beneficiary submits additional evidence showing a new critical or disabling mental condition that does not relate to the period at issue, if the beneficiary submits evidence showing a physical impairment (whether during or after the period at issue), or if the beneficiary raises the issue of filing a new application, OAO staff will inform the beneficiary that he or she may file a new application. See HALLEX I-1-10-1 C for the definition of “new critical or disabling condition.” If OAO staff verbally informs the beneficiary that he or she may file a new application, OAO staff will document the conversation on a form SSA-5002, “Report of Contact,” provide a copy to the beneficiary, and associate the form in Part E- Disability Related Development (blue tab) of the claim(s) file.
If the beneficiary files a new application, an adjudicator will not accept an escalated claim or consolidate the redetermination claim with the new application (see Program Operations Manual System (POMS) DI 12045.010A). The claim(s) cannot be consolidated because there is no “common issue” as defined in POMS (i.e., there are different issues and time periods involved in the redetermination claim and the subsequent application).
D. Decision Language
Once a beneficiary has been given notice of the redetermination, OAO must issue a decision or remand to an administrative law judge (ALJ) in a redetermination case. Even if the usual dismissal criteria are present, OAO will not issue dismissal orders when redetermining these cases.
Because the beneficiaries in these cases were convicted of one or more criminal charges relating to fraud or similar fault in the individual's application for benefits as of the date of prior decision, SSA must disregard all evidence in the file. Therefore, it is anticipated that SSA will issue unfavorable actions in all of these cases due to insufficient evidence. In many instances, an adjudicator may find it appropriate to decide the case at Step 2 because there will be insufficient evidence to establish any medically determinable impairment. However, regardless of the step at which the case is decided, in all cases, the adjudicator will specifically note in the decision that:
Under section 205(u) of the Act, SSA must redetermine an individual's entitlement to disability benefits and disregard evidence when there is reason to believe fraud or similar fault was involved in that individual's application for benefits. The New York County District Attorney's Office and the Office of the Inspector General of the Social Security Administration conducted an extensive criminal investigation that resulted in the criminal indictment and conviction of Raymond Lavallee, Thomas Hale, Joseph Esposito, and John Minerva, who admitted to conducting a scheme to make false statements or other representations to the Social Security Administration in order to obtain fraudulent benefits for others. Numerous individual beneficiaries have also been indicted and convicted in connection with the DA's investigation, including the beneficiary of the claim being adjudicated.
Because the beneficiary was convicted of one or more criminal charges relating to fraud or similar fault in the individual's application for benefits, SSA disregarded all evidence in the claim(s) file.
The adjudicator determined that there was insufficient evidence supporting a finding of disability as of [Date of Prior Favorable Decision].
The beneficiary's benefits are terminated and SSA may treat the benefits the beneficiary previously received as overpayments. The provisions of Subpart F-Overpayments, Underpayments, Waiver of Adjustment or Recovery of Overpayments, and Liability of a Certifying Officer may apply. (20 CFR Ch III Part 404 Subpart F). The beneficiary may request that the overpayment be waived, and SSA will consider such a request under these rules.
E. Notification to Program Service Center
The Northeastern Program Service Center (NEPSC) is handling all payment matters relating to redeterminations of New York cases. When a redetermined decision is issued, OAO must notify the NEPSC via email at ¦¦NY ARC PCO DPB NEPC. OAO will use the subject line “OAO redetermination decision-NY” and include the following message in the text of the email:
OAO has issued a redetermination decision for [beneficiary's name (SSN: ###-##-####)]. The [unfavorable/favorable] decision is [attached/in eView]. Please take any necessary action to [cease/initiate] payment in this case and notify any other PSC that may be affected by this action. Thank you.
Sending an email to the NEPSC is critical to ensure these decisions are properly and promptly effectuated. If another payment center would usually have jurisdiction over the matter, the NEPSC needs to notify the other Program Service Center of the change in jurisdiction.
Send paper folders requiring further action by the NEPSC to:Social Security Administration
Northeastern Program Service Center
PO Box 319100
Jamaica, NY 11431-9819
III. Appeal Procedures
SSA does not expect that beneficiaries who were convicted of making false statements and representations to SSA will appeal the redetermination actions in these cases. However, if a beneficiary does appeal the redetermination action performed at another administrative level, OHO and OAO staff and adjudicators will request processing guidance through usual management channels.
Hearing office staff will direct all program-related and technical questions through appropriate management channels.
In OAO, staff and adjudicators will direct any program-related or technical questions to the Executive Director's Office.