I-1-2-81.Evidence or Allegations of Violations of Law

Last Update: 12/9/24 (Transmittal I-1-108)

A. General

Section 206 of the Social Security Act (Act) states that an attorney or non-attorney representative of persons claiming benefits under the Act may be criminally charged if they charge, collect, or make any agreement to charge or collect, directly or indirectly, any fee in excess of the maximum fee authorized by the Commissioner of Social Security or a court. A representative can also be subject to administrative sanctions for violating the fee obligations of the Act and agency regulations. See 20 CFR 404.1740(c)(2) and 416.1540(c)(2).

In some situations, a representative may assign the right to receive direct payment of an authorized fee to an entity. In these cases, the entity's POC must assist the agency in resolving any issues related to direct payment of fees to the entity. POCs who do not comply with the agency's rules of conduct and standards of responsibility for representatives, as appropriate to their role, may be subject to administrative sanctions. The agency has further described a representative's and an entity's point of contact's (POC) obligations regarding fees in 20 CFR 404.1720-1740 and 416.1520-1540. For more information on the roles and responsibilities of an entity's POC see the Program Operation Manual System (POMS) GN 03920.021. Entities that collect a fee in excess of the maximum fee authorized and fail to return excess or otherwise erroneous fees may be deemed ineligible to receive direct payment. For more information on the Ineligible for Direct Payment Entities (IDPE) list, see POMS GN 03920.051.

Any Office of Hearings Operations (OHO) or Office of Appellate Operations (OAO) employee who suspects or has evidence that a representative has violated the Act or regulations pertaining to charging or collecting a fee will:

  • Refer the matter to the Office of the Inspector General (OIG) using the procedures in Hearings, Appeals and Litigation Law (HALLEX) manual I-1-3-6; and

  • Refer the matter to the Office of the General Counsel (OGC) using the procedures set forth in this section.

NOTE:

If the employee does not suspect a criminal violation has occurred but believes the behavior is inappropriate and may constitute misconduct, the employee will refer the matter to OGC. The employee need not refer the matter to OIG.

B. Referring a Suspected Violation to OHO or OAO Management

1. Prepare a Referral Memorandum

At the hearing level, the employee will prepare a referral memorandum from the Hearing Office Chief Administrative Law Judge (HOCALJ) or National Hearing Center (NHC) Director, addressed to the OGC Office of the Regional Chief Counsel (ORCC) in the region where the representative's office is located. At the Appeals Council (AC) level, the employee will prepare the memorandum from the Executive Director.

NOTE 1:

In accordance with 5 USC § 2302(b)(13): These provisions are consistent with and do not supersede, conflict with, or otherwise alter the employee obligations, rights, or liabilities created by existing statute or Executive order relating to (1) classified information, (2) communications to Congress, (3) the reporting to an Inspector General of a violation of any law, rule, or regulation, or mismanagement, a gross waste of funds, an abuse of authority, or a substantial and specific danger to public health or safety, or (4) any other whistleblower protection. The definitions, requirements, obligations, rights, sanctions, and liabilities created by controlling Executive orders and statutory provisions are incorporated into this agreement and are controlling.

NOTE 2:

If suspected representative misconduct is discovered by an OHO regional office (RO) or headquarters employee, the employee will apply the same general principles described in this subsection. In the RO, the Regional Chief Administrative Law Judge will sign the referral memorandum. In OHO or OAO headquarters, the component executive will usually sign the referral memorandum.

The memorandum will generally include:

  • The names, addresses, and telephone numbers of the representative and the claimant;

  • The name, address, and telephone number of any other involved individual or witness;

  • The date(s) the action(s) occurred;

  • The action(s) that led to the representative misconduct allegation;

  • The location(s) where the action(s) took place (i.e., hearing office, representative's office, bank, or other location);

  • Any other relevant information, such as whether the hearing office previously referred the representative to OGC; and

  • Contact information for the employee who discovered the alleged misconduct.

2. Prepare the Referral with Relevant Information

The employee will reference the certified electronic file (CEF), or other appropriate SSA application, or will prepare a paper packet of relevant information to accompany the memorandum. Relevant information may include:

  • The document(s) or statement(s) from the claimant(s) or other person(s) alleging a violation;

  • Notice of the representative's disbarment or suspension, especially if it relates to fee-related issues;

  • Copies of bills or receipts the representative issued to the claimant;

  • Originals or copies of cancelled checks or money orders from the claimant, payable to the representative;

  • Copies of any offer of an opportunity to correct the situation that is made to the representative; and

  • Copies of fee agreements.

If a paper file is involved, the employee will make copies of any relevant documents and, when appropriate, a CD copy of the hearing recording.

NOTE:

If a paper claim file is already with another component for effectuation when the employee first becomes aware of the possible violation, the employee will request the file. If the file cannot be located, the employee will note in the memorandum all attempts to locate the file.

3. Document the Referral in the System

The OHO or OAO employee will add the following Remark in the applicable processing system to note the referral: “OGC referral submitted for consideration on [date and the office where the referral is submitted].” At the hearing level, the referral will be noted in the Case Processing and Management System (CPMS), for a case in CPMS only, or the Hearing and Appeals Case Processing System (HACPS), as appropriate. At the AC level, the referral will be noted in the Appeals Review Processing System (ARPS) or the Office of Appellate Operations Case Processing System (OAOCPS), as appropriate.

NOTE:

To avoid Privacy Act concerns, the referring employee will not include any other information about the referral in the processing system. Rather, the employee will include specific information and details about the referral in the memorandum.

4. Forward the Memorandum to Management

At the hearing level, the employee will forward the referral memorandum and any accompanying documentation to their first line supervisor, who will refer the memorandum through the management chain to the HOCALJ or NHC Director.

At the AC level, the employee will refer the memorandum and any accompanying information directly to the Division Chief Administrative Appeals Judge (DCAAJ).

C. Management Referrals to OGC

1. Hearing Level

The HOCALJ or NHC Director will review the initial referral memorandum to ensure that the allegations are fully developed and a referral to OGC is appropriate.

The HOCALJ or NHC Director will then sign the memorandum and forward the information to the management team in the OHO RO in the region where the representative's office is located. The RO will determine whether there are referrals from other regional hearing offices that involve the same representative or entity before sending the referral to OGC.

2. Appeals Council Level

The DCAAJ will review the initial referral memorandum to ensure that the allegations are fully developed and a referral to OGC is appropriate.

When the DCAAJ agrees a referral is appropriate, the DCAAJ will forward a copy of the memorandum to ^DCARO OAO with the subject line “OGC Referral,” and, when applicable, deliver any supporting documentation to the Executive Director's Office. The Executive Director's Office will review and, when appropriate, forward the referral to OGC.

D. OGC Action After Referral

For more information on OGC's actions after OHO or OARO sends a referral for possible representative misconduct, see HALLEX I-1-1-50 D.