State of Wisconsin Department of Health Services

Release 24-02 August 22, 2024

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3.14.1 Intentional Program Violation (IPV) Disqualification

7 CFR 273.16

An applicant or member commits an Intentional Program Violation (IPV) when they intentionally:

• Make a false or misleading statement or misrepresent, conceal, or withhold facts, including but not limited to their identity, who they are living with, or which state they live in, to become eligible or to remain eligible for benefits; or
• Commit any act that constitutes a violation of the Food and Nutrition Act of 2008, the Supplemental Nutrition Assistance Program Regulations, or any Wisconsin statute for the purpose of using, presenting, transferring, acquiring, receiving, possessing, or trafficking of FoodShare benefits or QUEST cards.

Trafficking or misuse includes the following:

• Using FoodShare benefits to purchase food for the sole purpose of returning the food for a cash refund,
• Reselling food purchased with FoodShare benefits for cash or other consideration,
• Purchasing, for cash or other consideration, food that was previously purchased from a supplier using FoodShare benefits,
• Directly or indirectly buying, selling, or stealing EBT cards, card numbers, or personal identification numbers (PINs) for cash or other consideration,
• The exchanging of firearms, ammunition, explosives, or controlled substances, as defined in section 802 of Title 21 of the United States Code, for SNAP benefits, or
• Unauthorized person(s) knowingly obtaining, possessing, transferring, or using FoodShare program benefits.
• Using FoodShare benefits in an unauthorized way.

 An IPV may be determined by the following means:

• Administrative Disqualification Hearing (ADH) decision
• Federal, state, or local court order
  • Pre-charge or pretrial diversion agreement initiated by a local district attorney and signed by the FoodShare member in accordance with federal requirements

3.14.1.1 Investigating Potential Fraud

Fraud investigations determine the accuracy of an allegation that a person receiving benefits from a public assistance program intended to misrepresent their eligibility criteria or committed any act that constitutes an IPV. A careful examination of a case record by the agency is essential in determining whether it should be referred for fraud investigation.

A fraud investigator is a worker designated to review a case, also known as a fraud referral, suspected of fraudulent activity. The investigator must determine if an overpayment of benefits occurred and if there was intent to commit fraud against the program. 

Common suspected fraud cases referred to an investigator by an IM or tribal agency include:

1. A benefit overpayment is suspected, and the agency has reason to believe the overpayment is the result of misrepresentation of program eligibility requirements. The misrepresentation of program eligibility or fraudulent activity may be the result of:
   1. False or misleading statements of circumstances.
   2. Failure to report a change in circumstances.
   3. Concealed or withheld facts.
   4. Violation of a program regulation or State statute relating to program benefits.
2. The benefit(s) would not have been provided but for the false representation.
3. The conduct of the benefit recipient indicates the misrepresentation or fraudulent use of the benefit was done with knowledge and intent.

The fraud referral should contain all relevant data the agency has on the case to help the fraud investigator.

The primary purpose of a fraud investigation is to substantiate the validity of a fraud referral. To do this, the IM consortium or tribal IM agency needs to provide as much relevant information as possible so the investigator can determine if the member intended to commit any act that constitutes an IPV and if any benefits were overpaid. 

Fraud investigations may include, but are not limited to:

• Gathering and examining documentary evidence
• Investigative Interviewing
• Requesting verification related to the investigation
• Investigations in the field (for example, surveillance)
• Entering findings or comments on a referral into the investigation tracking system
• Representing the agency in a hearing
• Calculating overpayments
• Creating claims

Referral criteria should include, but not be limited to:

• A statement of the fraud allegation
• The date the information was received
• CARES case number
• Source of complaint
• Investigation reason
• Potential programs affected
• Potential look-back period
• Supporting documentation

When the investigation finds that a person committed an alleged intentional program violation (IPV), the agency must decide whether to refer the case to one of the following:

1. Administrative Disqualification Hearing (ADH)
2. District Attorney (DA) for prosecution
3. Make no referral for IPV/fraud determination

3.14.1.2 Administrative Disqualification Hearings

An administrative disqualification hearing (ADH) is the administrative process for determining an IPV for FoodShare.

A referral agency may request an ADH when there is sufficient documentary evidence that a person or group has intentionally violated the program requirements. An ADH may be initiated regardless of the person’s current eligibility for the FoodShare Program.

Consider initiating an ADH when at least one of these conditions is met:

1. The facts of the case don’t warrant criminal prosecution.
2. The case does not meet the local prosecution referral criteria.
3. The DA declines to prosecute the referred person.
4. The same person was previously referred for prosecution, but no action was taken (within a reasonable period of time) and the referral was formally withdrawn.

An ADH, like a fair hearing, is held by the Department of Administration (DOA), Division of Hearings and Appeals (DHA). An ADH differs from a fair hearing in these ways:

1. The referral agency, not the accused person, requests the hearing.
2. A representative of the agency will present the evidence supporting the request for the ADH and the alleged IPV.
3. There is no time limit within which an ADH must be requested.
4. The timely notice (Notice of Administrative Disqualification Hearing) is measured from the date of the hearing.

When requesting an administrative disqualification hearing, there must be clear and convincing evidence demonstrating that the person committed, and intended to commit, an IPV. The burden of proof is on State or the agency pursuing the IPV.

Exact required evidence may vary based on the specific circumstances of the case. However, the evidence must be clear and convincing. For evidence to be considered clear and convincing it should be:

1. Explicit in detail.
2. So clear as to leave no reasonable doubt.
3. Reasonably certain of issues and findings.

Administrative Law Judges frequently cite a Wisconsin Circuit Court ruling and reference Wisconsin Jury Instruction in ADH decisions as the lens through which they determine whether a case is clear and convincing.

Evidence of an IPV exists when it can be shown that the person willfully provided false information or failed to disclose information in order to receive or attempt to receive benefits to which they were not entitled. 

Include evidence that shows that the accused person was informed of their rights and responsibilities, reporting requirements, information of what was used in the benefit determination, or any other related records.

Sources of evidence include, but are not limited to: 

• Written proof of all information that the person intentionally failed to report. 
• An application, change report form, or recertification submitted during the period of suspected violation. 
• Receipt of notices that detail pertinent information related to the alleged IPV, including Notices of Decision, Case Summaries, or the Enrollment and Benefits Handbook.
• IEVS or other data sources that are considered verified on receipt, such as vital records, child support, or unemployment compensation matches.
• Documentations of agency visits (in person or via phone) including the recording of the call, if available.
• Oral evidence that is either provided under oath or affirmed by another person.

Documentary evidence must be used to show intent to break the program rules. However, documentary evidence that is not authenticated by the source is considered hearsay. Hearsay evidence consists of documentation or statements that are not substantiated or corroborated from the evidence source. Although hearsay evidence is admissible in an ADH, hearsay evidence alone may not be enough to prove the allegation. 

The accused person and their representative, if applicable, must be given adequate opportunity to:

1. Examine the contents of their case file, and all documents and records to be used by the agency at the hearing, at a reasonable time before the date of the hearing, and during the hearing, and to receive a copy of material pertinent to the case from the file at no charge.
2. Present their case for themselves or with the aid of a representative.
3. Bring witnesses.
4. Submit evidence to establish all pertinent facts and circumstances.
5. Advance any arguments without undue influence.
6. Question or refute any testimony or evidence, including the opportunity to confront and cross-examine adverse witnesses.

A representative of the agency must attend the ADH to submit clear and convincing evidence to prove the allegations of Intentional Program Violation against the accused.

Even if the accused or their representative fails to attend the ADH, the agency must present clear and convincing evidence that the accused committed an IPV in order for the administrative law judge (ALJ) to determine that an IPV was committed.

The agency must determine the essential facts in a case. This is best done by asking, "What facts need to be shown in order to prove the case?"

1. Review program policy to determine what is required.
2. Analyze the case to see if there are any other facts that must be established.
3. Obtain the best evidence to prove each fact.

The agency's evidence on each and every essential fact must meet the test of clear and convincing. The burden of proof is placed only on the agency; the client has no burden of proof that has to be met. If the agency fails to meet the level of clear and convincing proof on each and every fact, the ALJ may rule against the agency.

3.14.1.2.1 ADH Request Requirements

The referral agency must provide a written notice to the person alleged to have committed the program violation at least 30 days prior to the date of the disqualification hearing.

The written Administrative Disqualification Hearing Notice shall include the following items:

1. Date, time, and location of the hearing.
2. Allegation(s) against the person, including a statement that the agency believes benefits were received by the accused person (or that the person attempted to receive benefits) by intentionally violating a program rule.
3. A summary of the evidence, along with appropriate documentation, supporting the allegation(s) of an IPV, including:
   1. The period of time or date(s) during which an overpayment was received or benefits misused.
   2. The amount of the overpayment or amount of misused benefits involved.
   3. A statement informing the person of their right to examine the evidence and instructions on how and where the evidence can be examined. 
4. A warning that the person's failure to appear at the ADH without good cause will result in a decision by the ALJ based solely on the information provided by the agency at the hearing.
5. A statement that the person may request a postponement of the hearing provided that such request is made to the Department of Administration, Division of Hearings and Appeals (DHA) at least 10 days in advance of the scheduled hearing, with the following restriction. The hearing shall not be postponed for more than a total of 30 days.
6. A statement that the person will have 10 days from the date of the scheduled hearing to present to the Division of Hearings and Appeals (DHA) good cause for failure to appear in order to receive a new hearing.
7. A description of the penalties that can result from a determination that the person has committed an intentional program violation and a statement of which penalty is applicable to the person.
8. A statement that the hearing does not preclude the District Attorney from prosecuting the person for an intentional program violation in a civil or criminal court action, or the agency from establishing and collecting an overpayment.
9. A statement that the person and remaining adult members of the Assistance Group (AG) will be responsible for repayment of the overpayment.
10. A listing of persons or organizations that provide free legal representation to persons alleged to have committed intentional program violations.
11. A statement of the accused person's right to remain silent concerning the charge(s) and that anything said or signed by the person concerning the charge(s) may be used against him or her in a court of law.
12. A telephone number and, if possible, the name of the person to contact for additional information.

3.14.1.2.2 ADH Decision

Decisions made by the ALJ shall be based exclusively on evidence and other material introduced at the hearing. The transcript or recording of testimony, exhibits, or official reports introduced at the hearing, together with all papers and requests filed in the proceeding, and the decision of the hearing office shall be made available to the person or to their representative at a reasonable time and place.
Decisions made by the ALJ will:

1. Include a decision summarizing the facts and identifying the regulations supporting the decision.
2. Be made within 90 days of the date of the Notice of Administrative Disqualification Hearing.

If the ADH ALJ finds that the accused person committed an IPV, the agency will enter the IPV and any related benefit recovery as soon as possible. 

3.14.1.2.3 Waiver of the Administrative Disqualification Hearing

Effective May 1, 2023, the administrative disqualification hearing cannot be waived. Any forms received by the Division of Hearings and Appeals on or before April 30, 2023 that were signed prior to the policy change can be accepted to waive the hearing. 

3.14.1.3 Referring a Suspected IPV for Prosecution

IM and tribal agencies should work with their local district attorney to establish specific criteria for referring FoodShare cases for prosecution. Instances of fraud that meet the agency and district attorney's criteria for prosecution should be referred to the district attorney. Once a decision is made to refer the alleged fraud for prosecution, the following should be sent with a letter of referral:

1. A synopsis of the fraudulent activity.
2. The investigation summary supporting the allegation.
3. A list of supporting documentation.
4. All information obtained in the investigation.
5. Full overpayment amount and appropriate program penalties.

The referral letter should include a request that the district attorney recommend to the court that a disqualification penalty be imposed (in addition to any civil or criminal penalties).

If the IM or tribal agency has a memorandum of understanding (MOU) with the local district attorney, the established process should be followed when making a referral for prosecution. The MOU should outline necessary documentation to make a successful referral.

When a decision is made to refer a case to the district attorney for prosecution, or if there is no MOU defining the referral criteria, the following materials are recommended by the Wisconsin District Attorney’s Association, et. Al, for making a satisfactory referral to prosecution.  

1. Documentation that the recipient signed the application/review form.
2. Documentation of sources and amounts of income and assets, as applicable.
3. Documentation of relevant changes in the case circumstances.
4. Documentation that the recipient received more program benefits than they were entitled to.
5. Documentation to show that the recipient trafficked benefits or used benefits in an unauthorized way.
6. Calculation of the amount of all overpayments subject to prosecution.
7. A written summary of an interview or an attempted interview with the recipient or the recipient's signed statement regarding the allegations.
8. The agency's recommendation regarding restitution, including possible repayment by recoupment from on-going financial assistance benefits in accordance with policy.
9. A copy of the investigation report with a prosecution recommendation from the investigative service.

3.14.1.3.1 Pre-Charge Diversion Agreement

The Pre-Charge diversion agreement is an alternative for anyone referred to the DA for an alleged IPV. It permits recovery of over issued benefits from the group member without the stigma of actual court prosecution. The referral agency should have an agreement with its local DA that provides for at least a 10 day advance written notification to the person of the consequences of signing the consent agreement.

The pre-charge diversion agreement can be used at the point in the legal process prior to the DA filing criminal charges with the court of jurisdiction. The Pre-Charge Diversion Agreement is a contract between the person who admits to committing an IPV and the DA. The Agreement includes:

1. A statement by the person that they did commit an IPV.
2. An agreement that they will make full restitution of all benefit over issuance resulting from the IPV.
3. An agreement to waive their right to an administrative disqualification hearing and agree to the appropriate program disqualification penalties.
4. An optional agreement that they will pay associated costs, assessed costs and any additional penalties.

3.14.1.3.2 Pre-trial Agreement

The Pre-Trial diversion agreement is similar to the Pre-Charge agreement in that it is a contract between the person who admits to committing an IPV, and it includes the same stipulations. It is usually initiated after criminal charges have been filed with the court of jurisdiction. The agreement or contract requires the judge's signature.

The Pre-Trial diversion agreement can be used at any point in the legal process that the DA or court wishes, including after the entry of a guilty or no contest plea by the defendant.

3.14.1.3.3 Disqualification Consent Agreement

If a person's case has been referred to the District Attorney for prosecution for civil or criminal misrepresentation or fraud, the person may defer prosecution by signing a Disqualification Consent Agreement (F-16025). By signing this agreement the client agrees to the penalties listed, even though the client has not been found guilty through court proceedings.

If the client signing the Disqualification consent agreement is not the primary person, the primary person must also sign this form in the line provided.

3.14.1.3.4 Prosecution Diversion Agreement

The Prosecution Diversion Agreement (F-16026) is similar to the Disqualification Consent Agreement as the individual is agreeing to receive an IPV. However, it is used in cases where the person is being charged with fraud in more than one public assistance program.

Due to federal regulations specifying certain parameters that need to be on a disqualification form, the Disqualification Consent Agreement still needs to be signed in order for the agency apply an IPV to a person’s case.  

3.14.1.4 Retailer Fraud

A FoodShare retailer is a store authorized by FNS to sell food products in exchange for FoodShare benefits using the Wisconsin Quest Card and SNAP benefits issued by any other authorized state or territory. Retailer fraud involves an authorized store breaking program rules. Retailer fraud is investigated by the United States Department of Agriculture (USDA).

Examples of FoodShare retailer fraud include but are not limited to:

• Redeeming more FoodShare benefits than the value of food sales
• Selling ineligible items
• Accepting FoodShare benefits in payment for food sold to a FoodShare household on credit
• Buying or selling FoodShare benefits

Immediately notify the OIG Trafficking Unit at DHSOIGTRAFFICKING@wisconsin.gov of suspected retailer fraud. Referrals will be forwarded to FNS’s retailer operation division for review. OIG trafficking agents assist with forwarding required information to FNS to have proper documentation for FNS to review.  

You can also use the toll-free hotline (800) 424-9121 to report fraud, waste, or abuse committed by a FoodShare retailer.

3.14.1.5 IPVs from Other States

If a worker receives a notification that an IPV was imposed in another state, they must verify this information as either true or false with the other state or the member.

Documentation may be in any form deemed appropriate and legally sufficient. Such documentation may include, but shall not be limited to, electronic or hard copies of court decisions, administrative disqualification hearing determinations, signed disqualification consent agreements or administrative disqualification hearing waivers.

You may accept a verbal or written statement from another State agency attesting to the existence of the documentation listed above.

You may accept a verbal or written statement from the household affirming the accuracy of the disqualification information if such a statement is properly documented and included in the case record. If the statement from the household contradicts the disqualification data, additional documentation will be required to verify whether the person should be disqualified.

IM workers must document any collateral contacts or other information regarding the IPV disqualification in Case Comments.

3.14.1.6 Period of Ineligibility

The following sanction periods are for IPV's committed after December 1, 1996. Anyone determined to have committed an IPV is ineligible for:

1. One year for the first IPV.
2. Two years for:
   1. The second IPV or,
   2. The first IPV for which an individual is convicted in a federal, state, or local court to have used or received benefits in a transaction involving the sale of drugs of less than $500.
3. Permanently for:
   1. A third IPV, or
   2. A first IPV resulting from the conviction of the individual by a federal, state, or local court for having used or received benefits in a transaction involving the sale of firearms, ammunition, or explosives, or
   3. A first IPV resulting from a conviction of an individual in a federal, state, or local court involving trafficking benefits for an aggregate amount of $500 or more, or
   4. A second IPV for which an individual is convicted in a federal, state, or local court to have used or received benefits in a transaction involving the sale of drugs.

Once an IPV is imposed, all violations occurring before the first IPV cannot be used to pursue a second IPV. A second IPV can only be pursued if the violation occurred after the first IPV is imposed, and a 10-day notice is given.

If a second IPV is granted during the sanction period of the first IPV, it must be entered for the disqualification period to begin immediately. There may be instances in which IPVs are running simultaneously; therefore, the sanction time period may not be as long as it would have been had the IPVs been separate. Only a court or administrative law judge can set the start date of an IPV.

Only the person determined to have committed an IPV is ineligible. Other members of the FoodShare assistance group may continue to be eligible.

The individual must be notified in writing once it is determined that they are to be disqualified. If the person who committed the IPV is not the primary person, then the FoodShare Notice of Disqualification (F-16024) must be sent. Begin the disqualification period no later than the second month following the date the individual receives written notice of the disqualification. The disqualification period must continue uninterrupted until completed regardless of the eligibility of the disqualified individual’s food unit.

If a court finds an individual guilty of an IPV, the term of the disqualification period and the disqualification begin date must comply with the court order. If the court order does not specify a disqualification period, the disqualification period for the IPV is in accordance with the schedule above. If the court order does not specify the date for the disqualification period to begin, the disqualification period should begin in accordance with the provisions in the paragraph above, but within 45 days of the court decision.

For all IPV disqualifications, begin the disqualification period in the first possible payment month regardless of whether the person becomes a non-participant member or remains in the food unit. Do not pend the disqualification period until the disqualified individual reapplies.

If a non-participating person with an IPV disqualification does reapply for FoodShare, apply any remaining periods of ineligibility. If the ineligibility period has expired when the person reapplies, they may be eligible to receive benefits.

Example 1

John is notified of his one-year IPV disqualification in January, effective February 1. He doesn't request FoodShare for the first nine months of his period of ineligibility. If John reapplies for FoodShare in November and is determined otherwise eligible, he will still be ineligible for FoodShare benefits for the three remaining months of his disqualification period. If he waits until February to reapply, the disqualification period will have expired, and he may be determined eligible for FoodShare.

A pending administrative disqualification hearing or prosecution does not affect the person's eligibility. Do not take any adverse action in the matter before the case is resolved. Continue to act on other changes in income and circumstances.

Do not impose a disqualification period retroactively on an individual who has committed an IPV, but who had not been disqualified timely. Disqualify a food unit member only to the extent that the disqualification period has not elapsed.

Example 2

An IM worker determines in December that a person should have been disqualified in June for one year based on an administrative disqualification hearing decision. The agency failed to enter the IPV in CWW timely. Therefore, the IM worker should now disqualify the person for only the remaining five months.

All IPVs determined for an individual prior to April 3, 1983, shall be counted as one IPV for determining a current disqualification period.

3.14.1.7 IPV 10-Year Disqualification Penalty

A person who makes a false or misleading statement or misrepresents their identity or place of residenceResidency refers to Wisconsin residency and not the mailing address. Contrast this with address in the glossary. in order to simultaneously receive Wisconsin FoodShare benefits and SNAP benefits from any other state shall be ineligible for a period of 10 years.

In order to apply a 10-year disqualification penalty, the state agency needs to prove a person made a false statement or misrepresented their identity or place of residence while applying for or participating in Wisconsin FoodShare. 

Before imposing the 10-year disqualification period, there must be one of the following:

• A finding of fraud must be made by a state agency.
• A conviction of fraud must be entered by a state or federal court.

The administrative disqualification hearing process may be used for imposing this penalty.

Duplicate participation itself does not support the application of a 10-year program disqualification. There must be clear and convincing evidence that the person misrepresented or falsified their identity or place of residence to receive SNAP or FoodShare in more than one household.

Example 3

Janice moves to Wisconsin in May and applies for FoodShare.  She reports she is employed, she lives at a Wisconsin address, and that she is not receiving SNAP in another state. The IM worker determines Janice is eligible, and her application is approved after verifying her employment.  Later, it is discovered that Janice received SNAP in Texas in May. The IM worker pursues an IPV through an administrative disqualification hearing. An ALJ finds that Janice made a false statement that she hadn’t received SNAP in another state in May. This is Janice’s first IPV, so Janice is barred from the program for 1 year.

 

Example 4

On January 17, Jesse contacted the IM agency to apply for FoodShare. He reported recently moving to Wisconsin from Nevada and that he was not receiving SNAP benefits from Nevada. Jesse provided a lease as verification of Wisconsin residency and met all other eligibility criteria. He was approved for FoodShare in Wisconsin starting in January. Several months later, the IM worker discovers that Jesse has been receiving SNAP benefits in Nevada since the time of his application. The IM worker also verifies that the lease Jesse submitted was fraudulent and that he never resided in Wisconsin. The IM worker pursues an IPV through an administrative disqualification hearing. An ALJ finds that Jesse misrepresented his residency to receive SNAP in more than one state, so he is barred from the program for 10 years.

3.14.1.8 IPV Disqualification and Transitional FoodShare

When an individual is found by a court or administrative judge to have committed an IPV, that person is ineligible to participate in Transitional FoodShare (TFS). The exception is when that person is part of an already open TFS group. Once the TFS group is open and established, the only reason an individual will be removed is when that individual begins participating in another FoodShare assistance group or when the TFS group moves out of Wisconsin.

When an IPV is found to be valid by a court or administrative judge prior to TFS beginning, the IPV should be entered, and the individual will be excluded from the TFS assistance group at the TFS eligibility determination.

When TFS has already started, workers should continue following the instructions in the court order or fair hearing decision to begin the IPV disqualification period in the month directed by the court or administrative law judge. Even though the TFS amount will not decrease, the IPV will be enforced at the point that the TFS certification period ends, and the food unit completes a new application or recertification for FoodShare eligibility.

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Publication Number: P-16001