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                              Dorothy Burch, DAB CR5155 (2018)
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Dorothy Burch, DAB CR5155 (2018)








  
  
    

  
      
Department of Health and Human Services 
    DEPARTMENTAL APPEALS BOARD
          Civil Remedies Division





Social Security Administration,
	Acting Inspector General,
	Petitioner,
v.
Dorothy Burch,
	Respondent.
Docket No. C-18-208Decision No. CR5155August 6, 2018

        
              
    

      DECISION
The Acting Inspector General (I.G.) of the Social Security Administration (SSA) charges that Respondent, Dorothy Burch, violated section 1129 of the Social Security Act (Act) by making knowing misrepresentations and material omissions to SSA regarding her marital status in order to continue receiving Supplemental Security Income (SSI) benefits.  The I.G. proposes imposing a $15,400 civil money penalty (CMP) and an assessment in lieu of damages of $36,953 against her.
For the reasons set forth below, I agree that Respondent made knowing misrepresentations to SSA and withheld information material to determining her eligibility for SSI benefits.  Because of her misrepresentations to SSA concerning her relationship with her husband and her ongoing failure to disclose to SSA that she was married while receiving SSI benefits, I conclude that the CMP and assessment are appropriate.  I therefore impose a total CMP of $15,400 and an assessment in lieu of damages of $36,953 against Respondent.
Page 2
I.  Background and Procedural History
On September 11, 2017, the I.G. notified Respondent that she proposed to impose a CMP of $15,400 and an assessment of $36,953 against her, for a total amount of $52,353.  The I.G. explained that she took this action because Respondent made material omissions and representations to SSA in an effort to wrongfully receive SSI payments.  I.G. Exhibit (Ex.) 23 at 1.1
On November 14, 2017, Respondent timely requested a hearing before an administrative law judge (ALJ), and I was subsequently designated to hear and decide this case.
On December 14, 2017, I held a pre-hearing telephone conference, the substance of which is summarized in my December 18, 2017 Order Summarizing Pre-hearing Conference and Setting Briefing Schedule (Summary Order).  *See* 20 C.F.R. § 498.206(a).  Among other things, I directed the parties to file pre-hearing submissions articulating their respective arguments and identifying witnesses and documentary evidence in support thereof.  Summary Order ¶¶ 4-5.
The I.G. filed a brief (I.G. Br.) and 30 exhibits (I.G. Exs. 1-30).  Respondent initially did not file any pre-hearing submissions, but filed twelve exhibits (R. Exs. 1-12) after I issued a show-cause order to her and warned I would dismiss her case.  With her exhibits, Respondent also filed a document she labeled simply “R Ex,” a single sheet of notebook paper containing her handwritten statements.  I take this to be Respondent’s brief.  The I.G. waived her right to reply to Respondent’s exchange and moved to dismiss the case.  I denied the I.G.’s motion to dismiss on June 6, 2018.
II.  Admission of Exhibits and Decision on the Record
In the absence of objections from either party, I admit I.G. Exs. 1 through 30 and P. Exs. 1 through 12 into the record.
I previously directed the parties to submit written direct testimony from each of their proposed witnesses as exhibits, in the form of an affidavit made under oath or declaration made under penalty of perjury.  Summary Order ¶ 4; *see*20 C.F.R. § 498.216(b).  I noted that I would not accept oral testimony from any proposed witness for whom a party could have submitted written testimony but did not.  Summary Order ¶ 4.  I further noted that I would assume a party did not wish to cross-examine any witnesses for whom written
Page 3
testimony was submitted unless the party affirmatively requested to cross-examine the witnesses.  *Id.*  I provided the parties an opportunity to seek subpoenas for any adverse or uncooperative witnesses from whom they were unable to procure written testimony.  *Id.*  Finally, I noted that if, after the parties completed their submissions, I determined that further proceedings were unnecessary, I would close the record and issue a decision.  *Id.* ¶ 8.
The I.G. offered written testimony from four witnesses.2
  Respondent offered written testimony from one witness – herself.  R. Ex. 2 at 6.  Neither party requested to cross-examine the other party’s witnesses, nor did they request subpoenas.
I find a hearing in this matter to be unnecessary as neither party requested to cross‐examine the other’s witnesses or sought subpoenas to obtain direct testimony from adverse or uncooperative witnesses at a hearing.  Accordingly, I issue this decision based on the record before me.
III.  Issues
Whether there is a basis for the imposition of a CMP pursuant to section 1129(a)(1) of the Act and 20 C.F.R. § 498.102(a).
Whether there is a basis for the imposition of an assessment pursuant to section 1129(a)(1) of the Act and 20 C.F.R. § 498.102(a).
Whether a CMP and assessment should be imposed and, if so, in what amount considering the factors specified by section 1129(c) of the Act and 20 C.F.R. § 498.106(a).
IV.  Applicable Law
Pursuant to title XVI of the Act, certain eligible individuals are entitled to the payment of Supplemental Security Income (SSI) on a needs basis.  To be eligible for SSI payments, a person must meet U.S. residency requirements and must be:  (1) 65 years of age or older; (2) blind; or (3) disabled.  Disability under the program is determined based on the existence of one or more impairments that will result in death or that prevent an individual from doing his or her past work or other work that exists in substantial numbers in the economy for at least one year.  20 C.F.R. §§ 416.202, 416.905, 416.906.
Page 4
Section 1129(a)(1) of the Act authorizes the imposition of a CMP or an assessment against:
(a)(1)  Any person . . . who –
(A)  makes, or causes to be made, a statement or representation of a material fact, for use in determining any initial or continuing right to or the amount of monthly insurance benefits under title II or benefits or payments under title VIII or XVI, that the person knows or should know is false or misleading,
(B)  makes such a statement or representation for such use with knowing disregard for the truth, or
(C)  omits from a statement or representation for such use, or otherwise withholds disclosure of, a fact which the person knows or should know is material to the determination of any initial or continuing right to or the amount of monthly insurance benefits under title II or benefits or payments under title VIII or XVI, if the person knows, or should know, that the statement or representation with such omission is false or misleading or that the withholding of such disclosure is misleading . . . .
The Commissioner of SSA delegated the authority granted by section 1129 of the Act to the I.G.  20 C.F.R. § 498.102(a).  A material fact is a fact that the Commissioner may consider in evaluating whether an applicant is entitled to benefits under title II or eligible for benefits or payments under title VIII or title XVI of the Act.  42 U.S.C. § 1320a-8(a)(2); 20 C.F.R. § 498.101.  At the time the I.G. proposed to impose a CMP on Respondent, individuals who violated section 1129 were subject to a CMP of not more than $8,084 for each false or misleading statement or representation of material fact or for each month he or she fails to disclose to SSA a material fact.  20 C.F.R. § 498.103(a); 81 Fed. Reg. 96,161, 96,162 (Dec. 29, 2016).  Violators are also subject to an assessment, in lieu of damages, of not more than twice the amount of the benefits or payments made as a result of the statements, representations, or omissions.  42 U.S.C. § 1320a-8(a)(1); 20 C.F.R. § 498.104.
In determining the amount of the CMP to impose, the I.G. must consider:  (1) the nature of the subject statements, representations, or actions and the circumstances under which they occurred; (2) the degree of culpability of the person committing the offense; (3) the
Page 5
person’s history of prior offenses; (4) the person’s financial condition; and (5) such other matters as justice requires.  42 U.S.C. § 1320a-8(c); 20 C.F.R. § 498.106(a).
Section 1129(b)(2) of the Act specifies that the Commissioner shall not decide to impose a CMP or assessment against a person until that person is given written notice and an opportunity for the determination to be made on the record after a hearing at which the person is allowed to participate.  The regulations at 20 C.F.R. Part 498 provide that a person against whom a CMP is proposed by the I.G. may request a hearing before an ALJ.  The ALJ has jurisdiction to determine whether the person should be found liable for a CMP and/or an assessment and the amount of each.  20 C.F.R. §§ 498.215(a), 498.220(b).  The person requesting the hearing, the Respondent, has the burden of going forward and the burden of persuasion with respect to any affirmative defenses and any mitigating circumstances.  20 C.F.R. § 498.215(b)(1).  The I.G. has the burden of going forward as well as the burden of persuasion with respect to all other issues.  20 C.F.R. § 498.215(b)(2).  The burdens of persuasion are to be judged by a preponderance of the evidence.  20 C.F.R. § 498.215(c).
The ALJ decision becomes final and binding on the parties 30 days after the decision is served.  Either party may appeal the ALJ decision by filing with the DAB a notice of appeal within 30 days of the date of service of the initial decision.  20 C.F.R. §§ 498.220-221.
V.  Findings of Fact, Conclusions of Law, and Analysis
My conclusions of law are set forth in bold and followed by pertinent findings of fact and analysis.
**A. Respondent’s hearing request was timely, and I have jurisdiction.**
There is no dispute that Respondent timely requested a hearing.  I.G. Br. at 3.  I therefore have jurisdiction to hear and decide this case.  42 U.S.C. § 1320a-8(b)(2); 20 C.F.R. §§ 498.215(a), 498.220(b).
**B. There is a basis for the imposition of a CMP and an assessment pursuant to section 1129(a)(1) of the Act and 20 C.F.R. § 498.102(a).**
Pursuant to section 1129(a)(1) of the Act, a CMP or an assessment may be imposed against any person who withholds disclosure of a fact the person knows or should know is material to the determination of any continuing right to SSI benefits or payments if the person also knows or should know that withholding disclosure of the fact is misleading.  42 U.S.C. § 1320a-8(a)(1); 20 C.F.R. § 498.102(a)(3).  Similarly, a CMP or an assessment may be imposed against any person who makes a statement of a material fact for use in determining a continuing right to SSI benefits or payments that the person
Page 6
knows or should know is false or misleading.  42 U.S.C. § 1320a-8(a)(1); 20 C.F.R. § 498.102(a)(1).  As explained more fully below, I find the I.G. has established these elements by a preponderance of the evidence.
***1. Respondent made false and misleading statements of fact to SSA and withheld the fact of her marriage from SSA.***
On December 13, 2001, Respondent applied for SSI benefits.  I.G. Ex. 1 at 1; I.G. Ex. 15 at 5; I.G. Ex. 28 at 2 (McKimens Decl. ¶ 4).  On April 20, 2005, SSA approved Respondent’s application retroactive to the application date.  I.G. Ex. 1 at 1; I.G. Ex. 15 at 5; I.G. Ex. 28 at 2 (McKimens Decl. ¶ 5).  At that time, Respondent lived with Max Anderson, but she identified him as a friend helping her until she could support herself; she asserted they did not hold themselves out as man and wife.  I.G. Ex. 2 at 1; I.G. Ex. 15 at 5.
On November 21, 2006, Respondent provided to SSA “redetermination information to support [her] continuing eligibility for [SSI] payments . . . .”  I.G. Ex. 3 at 1; I.G. Ex. 15 at 5; I.G. Ex. 28 at 3 (McKimens Decl. ¶ 7).  She again reported that she was living with Mr. Anderson but that they did not present themselves to others as husband and wife.  I.G. Ex. 3 at 1; I.G. Ex. 15 at 5; I.G. Ex. 28 at 3 (McKimens Decl. ¶ 7).
On August 8, 2008, Respondent married Mr. Anderson.  I.G. Ex. 4 at 1; I.G. Ex. 15 at 5; I.G. Ex. 28 at 3 (McKimens Decl. ¶ 8).
SSA records after November 21, 2006 do not show Respondent reported any change in her circumstances to SSA until August 2, 2010, when she reported a living arrangement change.  I.G. Ex. 16 at 3; I.G. Ex. 17; I.G. Ex. 28 at 3 (McKimens Decl. ¶ 9).  At that time, Respondent reported that Mr. Anderson and another man, Jeremiah Purdue, were her roommates, that she was not “holding out” with either of them, and that they were just friends.  I.G. Ex. 16 at 3; I.G. Ex. 17; I.G. Ex. 28 at 3-4 (McKimens Decl. ¶ 9); I.G. Ex. 29 at 2 (Froedge Decl. ¶ 5).  SSA records at the time of the August 2010 living arrangement update listed the two men as being unmarried and non-relatives of Respondent, but identified Respondent as being married.  I.G. Ex. 17; I.G. Ex. 29 at 2 (Froedge Decl. ¶ 5).
In his written testimony, SSA Claims Specialist Caleb Froedge explained why it would not have been clear to SSA at that time that Respondent was married, either to Mr. Anderson or to anyone else, even though SSA’s system identified her as such.  I.G. Ex. 29 at 2 (Froedge Decl. ¶ 5).  Mr. Froedge stated that SSA records might have listed Respondent as married “because she had 3 terminated marriages prior to 2001,” and “[i]f the SSA technician (making the living arrangement changes on 08/02/2010) was not aware of a divorce date for the prior marriages, then they could presume she was still married . . . .”  I.G. Ex. 29 at 2-3 (Froedge Decl. ¶ 5).
Page 7
The discrepancy was however sufficient for Mr. Froedge to refer the matter to the I.G.  I.G. Ex. 29 at 2 (Froedge Decl. ¶ 5).  In an interview with SSA Special Agent Bruce McKimens, Respondent “stated she reported her marriage . . . to SSA on two separate occasions[, o]nce right before they go[t] married and then again about a week afterwards.”  I.G. Ex. 28 at 5 (McKimens Decl. ¶ 13); I.G. Ex. 16 at 2-3.  However, the record does not corroborate Respondent’s unsworn assertions; instead, SSA records from August 2010 show that Respondent reported to SSA that Mr. Anderson was her roommate and an unmarried non-relative with whom she was not “holding out.”  I.G. Ex. 17.
Special Agent McKimens declared that Respondent did not in fact report her 2008 marriage to Mr. Anderson to SSA until her living arrangement change report on August 5, 2016.  I.G. Ex. 28 at 4, 6 (McKimens Decl. ¶¶ 10, 13).  A September 2016 Redetermination Summary reflects that on August 15, 2016,3
 Respondent reported to SSA that she was married to Mr. Anderson.  I.G. Ex. 9 at 1.  But she also claimed that as of May 2, 2013, she had not been married and lived with unmarried non-relatives (Mr. Anderson and Mr. Purdue).  I.G. Ex. 9 at 2.
However, on September 16, 2016, Respondent submitted a document to SSA in which she wrote, “I have lived with my husband since we were married on 8/8/08.”  I.G. Ex. 10 at 1, 7.  According to Special Agent McKimens, Respondent eventually provided to SSA a copy of her marriage certificate (I.G. Ex. 28 at 4 (McKimens Decl. ¶ 11); I.G. Ex. 15 at 6) which confirmed her date of marriage.  I.G. Ex. 4.
I cannot find Respondent’s claim that she twice reported her marriage to SSA before then to be credible or likely.  In isolation, it is perhaps possible that she twice contacted SSA to report her marriage, and that two agency employees on separate occasions failed to document information reported by her that would materially affect how much money she received from SSA.  However, the record reflects SSA memorialized communications from Respondent where she in fact made the opposite assertion.  In August of 2010, Respondent contacted SSA and reported that Mr. Anderson was her unmarried, unrelated roommate, with whom she was not “holding out.”  I.G. Ex. 17; I.G. Ex. 28 at 3-4 (McKimens Decl. ¶ 9).  She eventually revealed her married state in August 2016, but
Page 8
reported that as recently as May 2013, she had still been single and living with Mr. Anderson as roommates.  I.G. Ex. 28 at 4, 6; I.G. Ex. 9 at 2.  Respondent did not admit to her actual date of marriage until September 2016.  I.G. Ex. 10 at 1, 7.
Based on this evidence, I find it more likely that Respondent failed to report her marriage to SSA than that two of her communications to the agency had simply gone unrecorded.  The subsequent records of contact show Respondent prevaricated as to her marital status, then attempted to minimize the duration of her fraud, and then finally, after confrontation by law enforcement, admitted to her true date of marriage.  I rely chiefly on SSA’s records to make these findings, as the agency’s reports of contact are both contemporaneous and made by impartial parties who had nothing to gain by fabricating such reports.
Both of Respondent’s August 2, 2010 and August 15, 2016 reports characterizing Mr. Anderson as her unmarried, unrelated roommate, despite their marital status, were false and misleading attempts to lead SSA to believe she either was not married to Mr. Anderson or that she had only married him sometime after May 2013.
Accordingly, I find that Respondent made two false and misleading statements to SSA related to her marriage to Mr. Anderson.  I further find that, for more than eight years, Respondent withheld from SSA disclosure of the fact that she was married to Mr. Anderson.
***2. Respondent’s false statements and omissions to SSA concerned a material fact.***
Section 1129 of the Act defines a material fact as a fact “the Commissioner of Social Security may consider in evaluating whether an applicant is . . . eligible for benefits or payments under title XVI.”  42 U.S.C. § 1320a-8(a)(2); *see also*20 C.F.R. § 498.101.  Whether someone is married or not clearly fits this definition, as marital status clearly affects an individual’s eligibility for title XVI payments.  *See, e.g.*, 42 U.S.C. §§ 1382(a)(1) (defining “eligible individual” in cases where the individual “does not have an eligible spouse”), (a)(2) (defining “eligible individual” in cases where the individual “has an eligible spouse”).  Perhaps the most important way marital status affects title XVI eligibility, at least in this case, is found in the following provision:
For purposes of determining eligibility for and the amount of benefits for any individual who is married and whose spouse is living with him in the same household but is not an eligible
Page 9
spouse,[4
] such individual’s income and resources shall be deemed to include any income and resources of such spouse, whether or not available to such individual, except to the extent determined by the Commissioner of Social Security to be inequitable under the circumstances.
42 U.S.C. § 1382c(f)(1).  The Commissioner’s regulations include complex rules for how and when to “deem” income from an ineligible spouse to an individual seeking SSI benefits.  20 C.F.R. §§ 416.1160, 416.1163.  The key facts triggering these deeming provisions are that the individual seeking benefits (1) is married to an ineligible spouse and (2) lives in the same household as the ineligible spouse.  *Id.*
It is clear the fact of Respondent’s marital status was material to determining her eligibility for and total amount of SSI benefits.  Respondent married Max Anderson on August 8, 2008.  I.G. Ex. 4.  Mr. Anderson is not an eligible spouse because he is not aged (he was born January 11, 1973), blind, or disabled.  I.G. Ex. 9 at 4.  Respondent first reported to SSA that she and Mr. Anderson lived in the same household beginning August 1, 2001, and her later reports indicate that they lived together continuously from that date.5
  I.G. Ex. 2 at 1-6; I.G. Ex. 3 at 1-4; I.G. Ex. 9 at 2-3; I.G. Ex. 10 at 7.  Accordingly, their marital status was critical to SSA’s correct determination of Respondent’s eligibility for SSI benefits, and Respondent’s marriage on August 8, 2008, was a “material” fact.  *See*42 U.S.C. § 1320a‐8(a)(2); 20 C.F.R. § 498.101.
Respondent’s two false and misleading statements to SSA claiming to be unmarried, coupled with her failure to disclose her true marital status for eight years, misrepresented the nature of her relationship to Mr. Anderson.  Her false statements to SSA and failure to disclose concerned a material fact, her marital status, that would have affected her eligibility for SSI benefits, or the amount to which she was entitled to receive.
Page 10
***3. Respondent knew or should have known that her failure to disclose the material fact of her marital status to SSA was misleading.***
There is no doubt that Respondent knew or should have known of her obligation to report her marital status, and that her failure to do so misled SSA.  The April 20, 2005 notice of award SSA sent Respondent instructed her to report any changed circumstances that might affect her award of SSI benefits, including if her “marital status changes.”  I.G. Ex. 1 at 3.  The November 21, 2006 redetermination summary SSA sent Respondent similarly reminded her in stark terms that she was required to “report to Social Security [if her] marital status changes.”  I.G. Ex. 3 at 7; I.G. Ex. 28 at 3 (McKimens Decl. ¶ 7).  Thereafter, Respondent received no less than four separate notices of changes to her SSI payment (on November 27, 2011, November 25, 2012, December 1, 2013, and November 30, 2014) all of which contained the following language, verbatim:
**Your Reporting Responsibilities**
Your SSI payments may change if your situation changes.  You are required to report any changes that may affect your SSI no later than 10 days after the month the change takes place.
Please call 1-800-772-1213 or contact your local Social Security office to report any of the following changes:
. . .
you marry, separate, or divorce . . . .I.G. Ex. 5 at 2; I.G. Ex. 6 at 2; I.G. Ex. 7 at 2; I.G. Ex. 8 at 2.  At no time has Respondent claimed she did not receive the above-described notices.  In fact, during her interview with Special Agent McKimens, she admitted that she was aware of her reporting responsibilities as an SSI beneficiary, including her obligation to report changes in her marital status.  I.G. Ex. 16 at 3; I.G. Ex. 28 at 5 (McKimens Decl. ¶ 13).
Because the various notices SSA sent to Respondent reminded her to report any changes that might affect her SSI benefits, including a change in marital status, and because she has conceded awareness of her reporting obligations, I find these numerous notices from SSA were sufficient to put Respondent on notice that any change in her marital status was a material fact SSA had to consider in determining her SSI eligibility.  Consequently, I find Respondent knew or should have known that her failure to report her marriage to SSA for eight years was misleading to SSA.
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***4. Respondent should have known that her affirmative statements of fact to SSA were false and misleading.***
On two separate occasions, in August 2010 and September 2016, Respondent falsely reported to SSA that Mr. Anderson was her unmarried roommate and non-relative at times when they were married.  I.G. Ex. 17; I.G. Ex. 9 at 2.  Respondent claimed she and Mr. Anderson had separated at times, but she also admitted she had never actually divorced him.  I.G. Ex. 28 at 6 (McKimens Decl. ¶ 13); I.G. Ex. 16 at 3.
Respondent therefore should have known that she and Mr. Anderson were still married on August 2, 2010, and May 2, 2013.  Yet, she reported to SSA that on those dates, Mr. Anderson was her unmarried, unrelated roommate.  Based on these facts, I conclude that Respondent should have known that her statements to SSA that flatly mischaracterized her relationship with Mr. Anderson were false and misleading.
**C. The CMP of $15,400 and assessment of $36,953 proposed by the I.G. are appropriate.**
***1. A $15,400 CMP is appropriate.***
The I.G. proposes a CMP of $15,400.  In determining a reasonable CMP, I consider the basis for imposing the CMP already discussed.  I also consider that a $15,400 CMP divided by 56 months shows that the I.G. proposes to impose a CMP of $275 for each month Respondent failed to report – an amount well under the maximum of $8,084 that the I.G. was authorized to impose for each month that a failure to report continues.  Act § 1129(a)(1); 20 C.F.R. § 498.103(a), (g)(2); 81 Fed. Reg. at 96,162.
Pursuant to 20 C.F.R. § 498.220(b), I may affirm, deny, increase, or reduce the CMP proposed by the I.G.  In determining the CMP or assessment to impose, I am bound to follow the guidance of 20 C.F.R. §§ 498.102 through 498.106.  The regulations do not provide that I am limited to reviewing whether the CMP or assessment proposed by the I.G. is “reasonable.”  *Cassandra Ballew*, Recommended Decision, App. Div. Docket No. A-14-98 at 9-10 (2014) (providing the ALJ evaluated and applied regulatory factors and determined a lesser assessment that the Board recommended the Commissioner approve).  In determining the amount of penalties or assessment, my review is *de novo*, and, just as the I.G. did when proposing penalties, I must consider the factors specified by section 1129(c) of the Act:
(1) the nature of the statements, representations . . . and the circumstances under which they occurred;
(2) the degree of culpability, history of prior offenses, and financial condition of the person committing the offense; and
Page 12
(3) such other matters as justice may require.
42 U.S.C. § 1320a-8(c); 20 C.F.R. § 498.106(a).
Respondent’s statements and omissions to SSA related directly to a key fact in assessing her continuing eligibility for SSI benefits.  Respondent had already been an SSI beneficiary for seven years before her marriage.  She was thus well aware of her reporting obligations.  In the following eight years, she received numerous notices advising her that she was required to report any change in marital status.  On two occasions, she affirmatively mischaracterized her relationship with Mr. Anderson to SSA, presumably to avoid reduction or termination of her SSI benefits.  The first factor thus supports the CMP amount proposed by the I.G.
Respondent’s culpability is significant.  Being fully aware of her own marriage and the material impact of her marital status on her eligibility for SSI, she did not accidentally mischaracterize her marital status to SSA.  She was well aware of her obligation to report it, but failed to do so.  She falsely claimed to have reported her marital status to SSA on two occasions, but in fact did the exact opposite, having twice misrepresented to SSA the nature of her relationship with her husband.  Even if her conduct was not intentionally calculated to mislead SSA into wrongfully paying her benefits for years, Respondent at minimum should have known that her conduct would have the effect of misleading SSA to her financial benefit.  Respondent’s culpability further supports the CMP proposed by the I.G.
The I.G. concedes that this is Respondent’s first offense involving SSA benefit programs, which was a key factor in the I.G.’s decision to propose a CMP significantly below the maximum amount permitted.  I.G. Br. at 18-19.  Respondent’s lack of prior offense history supports the lower CMP amount proposed by the I.G.
Like many SSI beneficiaries, Respondent’s financial condition does not militate towards a higher CMP amount.  Respondent’s financial disclosures to SSA reveal that she and her husband have expenses that exceed their income.  I.G. Exs. 10, 22.  This fact supports a greatly reduced CMP amount.
I recognize that while much lower than it could be, a $15,400 CMP is still a significant penalty given Respondent’s position.  However, Respondent’s husband has been continuously employed for more than five years (I.G. Ex. 10 at 2; I.G. Ex. 22 at 2).  Moreover, the I.G. points out that Respondent “would be able to pay the CMP and assessment through payments over an extended period of time, as opposed to one lump sum.”  I.G. Br. at 19-20.
The CMP proposed by the I.G. is also appropriate to serve the purpose of deterrence, both for Respondent and others.  The proposed CMP is just in that it is not excessive and,
Page 13
because SSA will allow repayment over an extended period of time, will not place Respondent in financial risk or make her totally dependent upon the social-welfare system.  Other matters as justice may require thus weigh in favor of the CMP proposed by the I.G.
Based on my consideration of the statutory and regulatory factors, I conclude that a CMP of $15,400 is appropriate in this case.
***2. A $36,953 assessment is appropriate.***
The I.G. proposes a $36,953 assessment in lieu of damages.  Any person subject to a CMP pursuant to 42 U.S.C. § 1320a-8(a)(1) is also “subject to an assessment, in lieu of damages sustained by the United States . . . of not more than twice the amount of benefits or payments paid” as a result of the conduct giving rise to the CMP.  42 U.S.C. § 1320a‐8(a)(1).
SSA’s proffered evidence concerning the amount and relevant period of the overpayment produced is somewhat in conflict.  A January 23, 2017 notice of overpayment states SSA overpaid Respondent $36,806.42 from February 2009 through April 2014.  I.G. Ex. 19 at 1.  The January 30, 2017 report of investigation states that SSA overpaid Respondent $36,953.42 from February 2009 to August 2016.  I.G. Ex. 18 at 2, 3.  A detailed accounting of the overpayment given by Claims Specialist Caleb Froedge states the total overpayment was $36,596.54, but the individual overpayment numbers he lists are for periods spanning January 2012 through August 2016, and actually total $36,626.54.  I.G. Ex. 29 at 4 (Froedge Decl. ¶ 8).
The I.G. asserts that an overpayment of $36,953.00 was paid to Respondent from January 2012 to August 2016.  I take from the I.G.’s position and Mr. Froedge’s testimony that January 2012 through August 2016 is the period during which SSA overpaid benefits to Respondent relevant to this proceeding.  Notwithstanding the discrepancies in the evidence relating to the precise amount of the overpayment, an assessment of $36,953 is appropriate because it is well within the maximum assessment—twice the amount of SSI benefits SSA paid to Respondent, or over $73,000—that the I.G. could have imposed.  42 U.S.C. § 1320a-8(a)(1); 20 C.F.R. § 498.104.  I therefore sustain the assessment.
However, recognizing the I.G.’s intent to limit the assessment to the actual overpayment in this case, it is my expectation that should further calculations reveal Respondent’s overpayment to in fact be lower that $36,953, the I.G. will adjust the assessment accordingly, and limit the amount imposed against Respondent to the actual overpayment amount.
Page 14
VI.  Conclusion
For the foregoing reasons, I conclude that Respondent is liable to pay a CMP of $15,400 and an assessment of $36,953.


          /s/
        Bill Thomas

                      Administrative Law Judge
      1. Document 7x in the official case file maintained in the Departmental Appeal Board’s E-File (DAB E-file) system; for clarity and simplicity, I will cite to the exhibits attached to the parties’ respective briefs by the exhibit numbers therein, not the document numbers assigned by DAB E-file. back to note 1
                      2. The I.G. lists only three witnesses on its witness list, but included among its exhibits is an affidavit from a fourth witness, Max Anderson, Respondent’s spouse. I assume the I.G.’s failure to include Mr. Anderson on her witness list was an oversight. Because the I.G. has otherwise properly submitted his written testimony, I will accept and consider his direct testimony for purposes of rendering my decision. back to note 2
                      3. The date of this report differs slightly from the date provided by Special Agent McKimens. It may result from a scrivener’s error misidentifying the 5th for the 15th, or vice-versa. It may also reflect a delay in time between the date Respondent reported her marriage and the date the report was generated. Regardless of the source of the inconsistency, the discrepancy does not affect the probative value of Special Agent McKimen’s declaration or of the Redetermination Summary – either source of evidence establishes that SSA did not have a record of Respondent reporting her August 2008 marriage until August 2016. back to note 3
                      4. “For purposes of [title XVI], the term ‘eligible spouse’ means an aged, blind, or disabled individual who is the husband or wife of another aged, blind, or disabled individual, and who, in a month, is living with such aged, blind, or disabled individual on the first day of the month or, in any case in which either spouse files an application for benefits, on the first day of the month following the date the application is filed, or, in any case in which either spouse requests restoration of eligibility under this title during the month, at the time the request is filed.” 42 U.S.C. § 1382c(b). back to note 4
                      5. Respondent claimed that during her marriage, she and Mr. Anderson had separated an unspecified number of times, each “for a month or so at a time.” I.G. Ex. 28 at 6 (McKimens Decl. ¶ 13); I.G. Ex. 16 at 3. Even if true, her periods of separation from her husband do not affect the outcome here, because she failed to report her marital status. Respondent was equally obliged to report her separation. Her failure to do so inured to her benefit because it allowed her to conceal her marital status from SSA. back to note 5 Back to top
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