Welfare Fraud in New York
Despite decreasing poverty and unemployment rates, many American households still rely on government assistance in order to make ends meet. The rising cost of living expenses, rent and food cause hardship for many families. There are various forms of assistance available under an entire array of acronyms.
Some examples include:
- WIC (Women Infant and Children),
- SNAP (Supplemental Nutrition Assistance Program),
- SSI (Social Security Income) and
- Welfare also knew as TANF (Temporary Assistance for Needy Families).
Each of these is benefits from the federal government to provide aid to the citizens. They can be used to obtain food, shelter, medical care, and other basic living expenses. The benefits are obtained through social services using income restrictions and are updated every 6 months to ensure eligibility.
However, if these benefits have been misused, Article 158 of the New York State Penal Code outlines the possible punishments for misuse and abuse.
How to prosecute a Welfare fraud?
In order to be prosecuted for Welfare fraud, an individual must intentionally use false information to gain access to public benefits knowingly. This can be done by completing an application with false information, using a false identification – real or fake and/or changing information to make self eligible.
There are various degrees in which you can be charged depending on the amount of money. There is also a similar charge for possessing more than 5 of the public benefit cards. The following article will help you to better understand the various aspects of Welfare fraud, criminal use of public benefit cards, and possession of public benefit cards.
Anyone who attempts to gain access to these benefits using false information is at risk for charges.
The Legal Definition of Welfare Fraud
“Public benefit card.”
A public benefit card is ANY type of government aid issued by the Social Security District that gives you access to benefits such as food stamps, welfare or access to medical assistance. The benefits can be issued by the local, state or federal government. (S 158.00 1. A.)
“Public assistance benefits.”
This includes any aid that is given to you from the social services department or social service district. (158.00 C). This does not include services provided by the private sector such as shelters, food banks, or charities.
“Fraudulent Welfare Act.”
This occurs when an individual purposely and deliberately attempts to defraud and obtain welfare. (158.00 B.) This can be done in various methods, each having their own components are the following:
- This can be done when the initial application is filled and reviewed by a caseworker. It does not matter if the answers are verbal or written; any information obtained must be accurate to the best of your abilities. If any false information is given knowingly, you can be at risk for welfare fraud. (158.00. B. 1)
- The second way that the fraud could be committed is by not using your own identity. This can be done via a fictitious name or another individual information to try to qualify for welfare. This could include inventing an identity or using a fake ID. (158.00 B. 2)
- Finally, if you provide deliberately use false information or documentation. If you do not meet the initial eligibility standards and falsify your income levels to obtain benefits, this would be considered welfare fraud. (158.00 B 3 i)
- Alternatively, if during initial or renewal of benefits the data is manipulated to cause an increase in the value of funds or prevent being given less. If your income increases and you do not report it to social services, knowing that you may get less or lose eligibility, this would be welfare fraud. (158.00 B 3 ii).
An assumption made by the court until shown otherwise. It is that any individual that has five or more cards in their possession has the intent to commit fraud. This is comparable to having a certain quantity of illicit drugs, and then you are assumed to be selling them. There are exemptions to this if you are:
- A government worker who uses the cards as a part of their duty
- An immediate family member of the same household with permission to have the card like a husband or wife
- Or a caretaker of the cardholder that is using it on behalf of the person (S. 158.00 2. B. 1-3)
- If five or more cards are in possession, then evidence must be provided to show that you do not have the intention to cause fraud. By having this many cards, it opens you up to charges for additional offenses.
This would be presented to the court and explained to a jury to disregard. These would also apply and allow for the persecution of Criminal Possession of Public Benefit Cards. (S. 158. 00 2.C.) Now that you have the basics of the information, the law is broken down into three separate but related offenses: Welfare Fraud, Criminal Use of Public Benefit Cards and Criminal Possession of Public Benefit Card with varying degrees of severity. The charges are based on the amount of money that is obtained and the number of public benefit cards that are held.
The first set of offenses are related to Welfare Fraud in its four degrees. As explained, these acts involve obtaining public assistance using false information intentionally, and the degrees are based on the amount of money involved.
- S 158.05 Welfare fraud in the fifth degree.
In order to be guilty, this involves gaining access to public benefits via a fraudulent welfare act.
- S 158.10 Welfare fraud in the fourth degree.
This charge occurs when you commit a fraudulent welfare act that is over $1,000. “Welfare fraud in the fourth degree is a class E felony.”
- S 158.15 Welfare fraud in the third degree.
You can be found guilty if you commit a fraudulent welfare act with a value that is over $3,000. “Welfare fraud in the third degree is a class D felony.”
- S 158.20 Welfare fraud in the second degree.
You can be charged in the second degree when the amount exceeds $50,000. “Welfare fraud in the second degree is a class C felony.”
- S 158.25 Welfare fraud in the first degree.
You can be found guilty if a fraudulent welfare act is committed with a value of over $1 million. “Welfare fraud in the first degree is a class B felony.”
Criminal Use of Public Benefit Cards
The next offense relates to the use of Public Benefit Cards. This relatable offense can also be charged with Welfare Fraud. These cards cannot be used as payment or collateral on loan, exchange for a separate benefit or traded for money or controlled substances.
- S 158.30 Criminal use of a public benefit card in the second degree.
If you intentionally do any of the following, you can be charged:
- If you are to loan anyone money or provide a service and accept a benefits card as payment or collateral to collect payment.
- Trade one public benefit for another such as trading; or
- If you use a public benefit as payment for (a) an illicit/controlled substance “as defined in subdivision five of section 220.00”, or (b) you intend to break the law. “Criminal use of a public benefit card in the second degree is a class A misdemeanor.”
- S 158.35 Criminal use of a public benefit card in the first degree.
You can be guilty of criminal use of a public benefit card in the first degree if you:
- Trade 3 or more benefit cards for another benefit
- Use 3 or more benefit cards as a payment method for controlled substances that are“defined in subdivision five of section 220.00 of this chapter.” “Criminal use of a public benefit card in the first degree is a class E felony.”
Criminal Possession of Public Benefit Cards
Finally, an individual can be charged for possession of Public Benefit Cards if you do not meet one of the exemptions previously stated in Rebuttable Presumption. The charges are as follows and vary in degree based on the number of cards you hold:
- S 158.40 Criminal possession of public benefit cards in the third degree.
You can be found guilty in the third degree if you have 5 or more cards that are not your own and intend to use them to commit a fraudulent welfare act, cause harm to another person or deceive them. “ Criminal possession of public benefit cards in the third degree is a class E felony.”
- S 158.45 Criminal possession of public benefit cards in the second degree.
You can be tried if you have 10 or more public benefit cards that are not yours with the deliberate action to commit a fraudulent welfare act, hurt another person or lie. “Criminal possession of public benefit cards in the second degree is a class D felony.”
- S 158.50 Criminal possession of public benefit cards in the first degree.
You can be convicted in the first degree if you involve 25 or more public benefit cards that are not yours and intentionally use them to commit a fraudulent welfare act, lie, or hurt another individual. “Criminal possession of public benefit cards in the first degree is a class C felony.”
After discussing the basics of the law, below will include examples of what a prosecution would need to prove to a jury. The burden of proof is with the prosecution and must meet all of the following criteria: knowledge and intent to commit fraud, providing false information to obtain the benefits or prevent changes to the amount, and if you use a false identity or not your own.
Each of these is explained in depth below.
The defendant would have knowingly and with the intention to submit documentation or answer questions with false information to attempt to gain benefits.
An example of this would be submitting false or manipulated documents. It also includes lying to the caseworker when talking about your benefits.
In People v. Norman – the defendant provided false receipts stating that she paid for childcare when she did not. This does not apply for unintentional errors or mistakes in filling out the forms
Element # 2
The applicant uses a different identity, false or not, to obtain benefits.
For example, Andre Anduaga committed identity theft. He used the ID of an FL resident to obtain SSI in NYC and collected over $360,000 in benefits
Element # 3
Provides false information to meet eligibility standards or provides false information to gain an increase or prevent a decrease in funds.
This also includes claiming fictitious children to obtain benefits such as Shirley Simmons in the 1990s who claimed over 70 fake children over the course of 10 years whether in renewal or initial it includes failure to report income and underreporting income.
In addition to the charges of Welfare Fraud, you could also be charged with the three following examples: identity theft, theft, and perjury. Due to the nature of filing using a different identity, it can cause you to be charged with Identity Theft as well. Theft, also known as larceny, can be charged for taking the funds.
You can also be tried for submitting the false documents to the court and perjury if you lied during the trial when asked about the documentation. Depending on how you filed and committed the fraudulent welfare act, it can make you vulnerable to other related charges. When committing the fraudulent welfare act, it is necessary to commit one of the following crimes listed as well.
By lying on the intake paperwork in any way, you have committed a form of perjury and can be tried as such. Obviously using another person’s information would constitute a charge of Identity Theft. Finally, larceny charges can be applied based on the number of funds involved. The details along with citations from the New York State Penal Laws are provided below.
- #1 Identity Theft
Identity theft is defined as using information such as name, birth date, social security number, address, etc. in an attempt to misrepresent yourself. There are various degrees of this charge that can range from Class A misdemeanors up to Class D felony charges.
Committing an identity theft can be as simple as providing an officer with a fake name and ID when identification is requested or as complex as purchasing another individual’s information for various criminal uses.
Article 190.00 of the New York State Penal Code details the various charges associated with Identity Theft
- #2 Larceny
Larceny, in the simplest terms, is theft. This can be done by shoplifting, robbery or any form of stealing money or property from an individual or entity.
Article 155.00 of the New York State Penal Code contains the aspects on which Larceny can be charged
- #3 Perjury
Perjury involves lying while under oath. According to Article 210.10, B involves lying to a government official performing their jobs and 210.45 involves the submission of false paperwork.
This charge can be brought on at any point the lie is detected.
Who investigates Welfare Fraud?
In New York, the Department of Social Services, DSS, is responsible for issuing public benefits and investigation of misuse of funds. In addition to being the issuing department, they are responsible for renewal of the benefits, reinstatement, and investigation of fraud for the benefits.
They have a Fraud Investigation Department that reviews suspected files and perform routine checks to ensure that beneficiaries are eligible for the aid.
There are also many 1-800 numbers in place in which an individual can be reported by citizens as well.
The investigation can occur on the local, state or federal level depending on the location of the charges and defendants involved. Below there will be examples of cases in which several well-known cases were filed.
Cases Involving Welfare Fraud
Perhaps one of the most famous cases involves a ‘celebrity’ Octomom also known as Nadya Suleman. She became famous for delivering the first live birth of octuplets. She pleaded guilty to 1 misdemeanor charge of welfare fraud and was forced to repay the money to the state. She received a probation period. The state agreed to drop the felony charges in return for restitution. (Bacon 2014).
In 2016, 24 Orange County residents were charged with welfare charges. When combined, the individuals received over $240,000 in aid that they were not eligible for. The largest sum was from “Janine Cassisi, of New Windsor – $32,700.89 “ (Eyewitness News 2016).
She was tried for Welfare Fraud in the third degree and Larceny in the third degree. The individuals were discovered through routine checks done by the fraud investigation team.
Punishments for Violation: New York Penal Code 158
As previously mentioned, the punishments will be based on the severity of the charge. The charges can be civil or criminal as well. Charges for Welfare Fraud are determined by the amount of money that you allegedly gained. For Criminal Possession of Public Benefit Cards, the severity is based on the number of cards on your person.
Sentencing is also based on the personal circumstances of the offender, prior convictions and persistent offenders. Ultimately, an attorney should be contacted to discuss your personal case. In General, according to the New York Penal Code Sentencing Guidelines:
- Welfare Fraud in the fifth degree:
“Upon conviction of a Class “A” misdemeanor, a court may sentence an individual to a maximum of 1 year in jail or 3 years probation. In addition, a fine of up to $1,000 or twice the amount of the individual’s gain from the crime may be imposed.” (Chapter 1 Criminal Justice System for Adults in NYS)
- Welfare Fraud in the fourth degree:
Class E Felony charges can vary from Probation without jail time to a max of 4 years imprisonment.
- Welfare Fraud in the third degree:
Class D Felony charges could vary from Probation to a maximum of 7 years in prison.
- Welfare Fraud in the second degree:
Class C Felony charges could result in Probation to a max of 15 years in jail
- Welfare Fraud in the first degree:
Class B Felony charges can vary from 1-3 years imprisonment to a maximum of up to 25 years.
- Criminal use of Public Benefit Card in the second degree:
Class A misdemeanor and can result in a probation period of up to 3 years, 1 year in prison and fines up to $1000 or double what the defendant gained.
- Criminal use of Public Benefit Card in the first degree:
Class E Felonies can result in a probation period to up to 4 years imprisonment
- Criminal Possession of Public Benefit Card in the third degree:
Class E Felony can be sentenced to probation and up to 4 years in prison.
- Criminal Possession of Public Benefit Card in the second degree:
Class D Felony can result in probation to up to 7 years imprisonment
- Criminal Possession of Public Benefit Card in the first degree:
Class C Felony can be sentenced to probation and up to a max of 15 years in jail.
Sentencing can vary based on your criminal record. It is imperative that you consult with an attorney. For repeat offenders, the sentences can be escalated along with the fines.
With ALL charges there can be fines that require you to pay up to double of the amount. You can also be barred from receiving future public benefits for yourself.
No one wants to be sent to prison for obtaining public benefits. There are multiple defenses for those that are facing charges. Legal advice based on your case should always be consulted with a lawyer. In order to be sentenced to Welfare fraud in any degree, the prosecution must prove two things.
There must be an intention to commit fraud, and it must be knowingly committed. You must also have to have committed one of the three elements that have been reviewed. In order to combat the prosecutors, the following defenses have shown to be effective:
Defense #1 Lack of Proof
- The prosecution is responsible for gathering documentation that the fraud occurred such as pay stubs to show income, false receipts, or statements that you made
Defense #2 Lack of Intention
- This defense can be difficult to prove, as there is financial compensation for intentionally falsifying documents. However, if it can be proved that there was no intent to commit fraud, then it does not meet the standards for the charge
Defense #3 Entrapment
- If it can be shown that you were coerced into the crime, as if a trap was set for you and you were nudged into it, then the claims must be dropped
Defense #4 Errors
- Errors in the documentation made by the prosecution can be grounds for dismissal of charges
Defense #5 Statute of Limitations
- The statute of limitations for Welfare Fraud is five years from the point that the fraud is discovered. If the investigative period extends past this point, then the charge will exceed the time frame that it is limited to.
It is critical to obtain legal representation if you are charged with Welfare Fraud. By consulting with an attorney, you can protect yourself from imprisonment, wage garnishments and fines associated with the offense. This can also help to prevent being coerced by law enforcement based on statements made during the interview or being misunderstood.
An experienced lawyer can also develop a strategy for court proceedings to assure that you are properly portrayed with all the evidence and not allow the jury to be manipulated. A lawyer from our firm will have your back during this difficult process to help you with the complex system and prevent felony charges from ruining your name.
Welfare Fraud In the News
September 11, 2017
Ana Candanedo was charged with:
● Welfare fraud in the 4th degree
She was sentenced on this date as she pleaded guilty. Candanedo submitted false documents on housing and benefits papers to make herself eligible for welfare funds. She was caught as a part of a larger “Operation Sticky Fingers” by a specialized task force. Her crimes were uncovered while they investigated thefts. She was sentenced to 1.5-3 years in prison for her crimes. She had a previous charge for assault on her infant daughter, which caused her to have a sentence enhancement.
March 13, 2017
Tammy Banack was charged with:
● Welfare fraud in the 4th degree
● Filing with a false instrument in the 1st degree
● Two counts: Grand larceny in the 2nd degree
● Grand larceny in the 3rd degree
She received over $67,000 in pension benefits and $19,000 in welfare benefits that she was not entitled to. She claimed benefits from her deceased mother to obtain a pension paycheck illegally. She then proceeded to apply for welfare benefits in the form of Medicaid. She concealed the income on welfare intake paperwork, making herself wrongfully eligible. She was sentenced on 6/1/17 to five years in prison and to pay back all of the money she had illegally received.
February 4, 2019
Brad Jacobs was charged and found guilty of:
● Grand Larceny in the 3rd degree
● Two counts: Unlawful practice of a profession
● Scheme to defraud in the 1st degree
Jacobs’ medical license was suspended and surrendered in 2007 after multiple counts of malpractice and gross negligence. He convinced patients in 2012 that he was a licensed physician and performed multiple cosmetic surgeries. He performed over 60 illegal operations and countless other in-office procedures such as botox. As a part of his loss of license in 2007, he submitted a claim for disability in which he received $75,000 up front and payments of $100,000 per year. He received a total of over $360,000 in disability claims under the notion that he was no longer practicing medicine and did not report the income. He received a total of 1.3 million dollars from his previous employer and concealed the funds, claiming he was in need for government aid such as SNAP. He received over $13,000 in benefits he had no need for. He was sentenced to 3-9 years in prison and restitution in over $400,000 to his patients.
January 9, 2019
Kester Atumnyogo was charged with:
● Healthcare fraud in the 1st degree
● Grand larceny in the 2nd degree
● Welfare fraud in the 3rd degree
He was charged after his scheme in which he “upcoded” many of his distributions. This means that he reported that he gave out over one million dollars worth of medical grade nutrition (which is very costly to obtain) when really he was handing out Pediasure and other over the counter solutions for a much cheaper cost. He also used a fake social security number to get government aid in the form of welfare benefits. He was sentenced to 1-3 years in prison. He also had several luxury vehicles that he used the funds to purchase that was sold at auction with the proceeds being returned to the state Medicaid program.
Bacon, John. ‘’Octomom’” gets probation in a welfare fraud case. 7/24/14. USA Today. Retrieved from https://www.usatoday.com/story/life/people/2014/07/14/octomom-pleads-no-contest/12639081/
Chapter 1 Criminal Justice for Adults in NYS. New York State. Retrieved from https://www.omh.ny.gov/omhweb/forensic/manual/html/chapter1.htm
Mugshots: 24 charged with welfare fraud in Orange County, NY. Eyewitness News. 6/30/2016. Retrieved from https://abc7ny.com/news/mugshots-24-charged-with-welfare-fraud-in-orange-county/1407220/
Government Benefits. USA.gov. Retrieved from https://www.usa.gov/benefits
Faison, Seth. Officials say a woman on welfare stole thousands with fake IDs. 5/20/1994. Retrieved from https://www.nytimes.com/1994/05/20/nyregion/officials-say-woman-on-welfare-stole-thousands-with-fake-id-s.html
Johnathan, Robert. Illegal Immigrant with fake IDs collects nearly $400K in Welfare benefits. 3/5/18. Retrieved from https://www.inquisitr.com/4813940/illegal-immigrant-with-fake-id-collects-nearly-400k-in-welfare-benefits/
Nathan, Geoffrey. New York Welfare Fraud Laws and Charges + Statute of Limitations. Retrieved from https://www.federalcharges.com/new-york-welfare-fraud-laws/
New York State Penal Law. Article 158: Welfare Fraud/Benefit Card. Retrieved from http://ypdcrime.com/penal.law/article158.htm#p158.05
New York State Penal Law. Felony Class Sentencing. Retrieved from http://ypdcrime.com/penal.law/felony_sentences.htm
People v. Normal. FindLaw. 10/26/17. Retrieved from https://caselaw.findlaw.com/ny-supreme-court/1878157.html
Welfare Fraud. Article 158 NYS Penal Law. Part 3. Title J. S. 158.00-158.500. Retrieved from http://ypdcrime.com/penal.law/article158.htm#p158.05