Consumer Fraud

State of Virginia Pays U.S. $7.15 Million To Resolve SNAP fraud allegations

whistleblower 2 370x210 State of Virginia Pays U.S. $7.15 Million To Resolve SNAP fraud allegationsThe Virginia Department of Social Services (VDSS) will pay $7.15 million to resolve a False Claims Act lawsuit that accused it of defrauding the federal government by manipulating data it provided to the U.S. for “food stamp” reimbursements.

U.S. authorities, including the USDA Office of Inspector General, the U.S. Justice Department’s Commercial Litigation Branch, and the U.S. Attorney’s Office for the Western District of Wisconsin, filed the False Claims Act suit after a nationwide audit of the Supplemental Nutrition Assistance Program (SNAP) uncovered suspicious activity within VDSS’ processing and administration of SNAP benefits.

The U.S. government funds SNAP benefits, but it relies on the states to determine whether applicants are eligible for benefits, to administer the benefits, and to take quality control measures to ensure its eligibility decisions are accurate.

The USDA reimburses states for a portion of their administrative expenses in administering SNAP, including expenses for providing quality control. The USDA also pays performance bonuses to states that report the lowest and the most improved error rates each year, and can impose monetary sanctions on states with high error rates that do not show improvement.

In its settlement, VDSS admitted that, starting in 2010, it hired Julie Osnes Consulting, a quality control consultant, to reduce its SNAP benefits determination error rate by training VDSS quality control workers to “use whatever means necessary” to find a benefits decision “correct” rather than finding an error.

VDSS also admitted that if its quality control staff “could not find a way to make a benefits decision correct,” they were instructed to “find a reason to ‘drop’ the case, or eliminate it from the sample.”

VDSS acknowledged that this method, which it employed until 2015, “injected bias into the case review process” because it was designed to lower VDSS’s reported error rate by falsely reporting errors as “correct” or eliminating them from the sample. Because of these practices, the USDA improperly awarded VDSS performance bonuses for 2011, 2012, and 2013.

VDSS also admitted that its quality control workers did not want to use the methods proposed by Julie Osnes Consulting because they believed the methods lacked integrity, injected bias into the quality control process, and violated USDA requirements.

The VDSS employees communicated their concerns to supervisors, but instead of addressing them, VDSS leaders “pressured and intimidated these employees to force them to adopt these methods, including, according to these employees, threatening termination, providing negative performance reviews, taking away teleworking and flexible scheduling privileges, and engaging in other forms of harassment and retaliation.”

“SNAP is an important vehicle for helping needy families,” said Acting Assistant Attorney General Chad A. Readler of the Justice Department’s Civil Division. “This settlement reflects the Justice Department’s commitment to ensuring that taxpayer funds are spent appropriately so that the public can have confidence in the integrity of vital programs like SNAP.”

Source: U.S. Department of Justice