I-5-6-8.New York (September 30, 2016 Referral; NYIN)

a. Screening

Designated adjudicators will review the file to determine whether it contains any of the following:

• Any evidence regarding a mental impairment submitted by one of the four principal facilitators (Mr. Lavallee, Mr. Hale, Mr. Esposito, and Mr. Minerva); and

• Medical evidence from two psychiatrists identified by the DA in the 2016 referral letter as participating in the alleged scheme, Dr. Edward Sodaro and Dr. Raymond Pierre-Paul.

If the file contains any of the evidence as outlined above, or if the adjudicator suspects that fraud or similar fault was involved in the provision of any other evidence, the adjudicator will determine whether there is an issue of fraud or similar fault that requires adjudication in accordance with SSR 22-1p and SSR 22-2p.

If, after screening, the adjudicator determines there is an issue of fraud or similar fault requiring adjudication, the SRC will continue processing the redetermination and will offer the individual an opportunity for a hearing. At the hearing, the individual will have the opportunity to object to the disregarding of evidence. The adjudicator will process the case using the instructions below.

b. Fraud or Similar Fault Identified as an Issue for Adjudication

If a Possible Fraud or Similar Fault (Special F) flag is not already part of the record, SRC staff will add that flag in eView for an electronic claim(s) file or attach the flag to the front of a paper claim(s) file.

Additionally, if it is not already part of the record, the SRC will add a copy of the applicable 2016 referral letter, indictments of the four principal facilitators, their plea agreements, and any other relevant document(s) to the claim(s) file. In paper cases, staff will add the documents to Part B- Jurisdictional Documents/Notices (red tab) of the claim(s) file. In electronic cases, staff will upload the documents using document type 7011-Misc. Jurisdictional Documents/Notices to Part B-Jurisdictional Documents/Notices (red tab) of the claim(s) file. See Attachments 1, 2, and 3 for copies of these materials.

c. Reason to Believe Standard

Under section 205(u)(1)(B) of the Act, SSA must disregard any evidence if there is reason to believe that fraud or similar fault was involved in the providing of such evidence. See HALLEX I-1-3-15 C.1. for the definition of “reason to believe.”

In determining if there is a reason to believe fraud or similar fault exists, the adjudicator may consider, among other evidence, the indictments of the four principal facilitators, their plea agreements, and the DA's 2016 referral letter.

Before the administrative law judge (ALJ) disregards evidence under section 205(u)(1)(B) of the Act at the hearings level of our administrative process, the ALJ will consider the individual's objection to the disregarding of that evidence. See HALLEX I-1-3-25. After considering any objections, the ALJ will decide whether there is reason to believe that fraud or similar fault was involved in providing evidence in the individual's case.

If, after the hearing and considering any objections, the ALJ finds there is reason to believe that fraud or similar fault was involved in the provision of evidence, the ALJ will disregard such evidence under section 205(u)(1)(B) of the Act and issue a new decision (i.e., redetermine the case). After disregarding such evidence, the ALJ will evaluate all remaining evidence in accordance with SSA's existing policies regarding the evaluation of symptoms and medical evidence. The ALJ will consider any internal inconsistencies in the individual's statements, as well as inconsistencies with other evidence. See 20 CFR 404.1513a, 404.1527, and SSR 16-3p: Titles II and XVI: Evaluation of Symptoms in Disability Claims.

If, after the hearing and considering any objections, the ALJ finds there is no reason to believe that fraud or similar fault was involved in the provision of evidence under section 205(u)(1)(B) of the Act, the redetermination must stop, and the ALJ will issue a fully favorable decision reinstating the original allowance (see subsections III.B.8.a. and b.).

d. Other Evidence

In some cases, it may also be appropriate to disregard evidence provided by a source who was not involved in the fraud scheme described in subsection II. For example, if a physician relies on medical evidence from one of the sources listed in subsection III.B.2.a. that the ALJ disregards, then the ALJ must also disregard the parts of the physician's report relying on the disregarded evidence, or, when based solely on the disregarded evidence, the entire document. When the degree of reliance on evidence from one of the sources listed in subsection III.B.2.a. is unclear, the ALJ will evaluate the evidence in accordance with SSA's existing policies regarding the evaluation of medical evidence.

e. Submission of New Evidence

When redetermining the case, the ALJ will consider any evidence the individual submits that is new, material, and related to the limited period at issue as defined in this instruction. See HALLEX I-2-5-13 and I-2-6-58 A. For example, if the individual submits evidence of an impairment that existed at the time of the original allowance but did not allege that impairment on their application, the ALJ will consider that evidence. Additionally, there are circumstances when evidence that post-dates the original ALJ decision will reasonably relate to the time period adjudicated by the original ALJ. For example, a statement from a medical source that is dated after the original ALJ decision, but specifically addresses the time period that the original ALJ adjudicated, may reasonably relate to the period at issue.

Generally, an ALJ will not develop evidence in these cases. However, the ALJ may develop evidence in the following circumstances:

• The ALJ may obtain medical expert or vocational expert evidence as needed.

• If an individual requests assistance in developing records that they indicate are new, material, and related to the period at issue, the ALJ will make every reasonable effort to assist the individual in obtaining the evidence.

• If the ALJ finds it necessary to develop new sources for the period at issue, the ALJ may develop at their own discretion. However, when developing evidence, the ALJ will specifically limit the requested information to the time period being adjudicated on the form SSA-827, Authorization to Disclose Information to the Social Security Administration, that accompanies the request for information.

If the individual submits evidence of a new impairment that does not relate to the period at issue, the ALJ will not consider or develop the evidence of the new impairment. However, an individual is not precluded from filing a new application under SSR 11-1p: Titles II and XVI: Procedures for Handling Requests to File Subsequent Applications for Disability Benefits when a redetermination is pending. See SSR 22-1p, section A.9. and HALLEX I-1-10-1 B.2.b.

a. Redeterminations of Closed Hearings Level Cases

In redeterminations of closed hearings level cases, under no circumstances can the ALJ dismiss the case, even if the individual does not appear at the time and place of the redetermination hearing, or if the individual is deceased. If the individual fails to appear and does not establish good cause, or waives the right to appear at the hearing, the ALJ will issue an on the record decision.

b. Case Redetermined at Another Administrative Level

The ALJ can dismiss a request for hearing if the case was redetermined at another administrative level, the individual appealed the case to the hearings level, and the criteria for dismissal are present. For more information about the dismissal criteria at the hearings level, see HALLEX I-2-4-5.

a. General

In all decisions, the adjudicator will specifically explain that:

• The New York County District Attorney's Office (DA) and the Office of the Inspector General (OIG) of the Social Security Administration (SSA) conducted an extensive criminal investigation that resulted in the criminal indictment and conviction of principal facilitators Raymond Lavallee, Thomas Hale, Joseph Esposito, and John Minerva, who admitted to conducting a scheme to make false statements or other representations to SSA in order to obtain fraudulent benefits for others. Numerous individual beneficiaries have also been indicted and convicted in connection with the DA's investigation.

• The DA referred this case to SSA as one where Mr. Lavallee was the individual's attorney representative, and the facts of the case are similar to those involved in the fraudulent scheme. The file contains evidence from one or more of the principal facilitators regarding a mental impairment(s) alleged in the case that SSA used to find the individual disabled or from one of the doctors the DA identified as having been involved in the scheme. Therefore, the ALJ determined whether the individual was entitled to benefits on or before [Date of Prior Determination or Hearing Decision], the date SSA initially allowed the claim(s).

• Under section 205(u) of the Social Security Act (Act), SSA must redetermine an individual's entitlement to disability benefits and disregard evidence when there is reason to believe fraud or similar fault was involved in that individual's application for benefits.

• The ALJ was required to make a finding regarding whether there is reason to believe fraud or similar fault was involved in the providing of the following evidence dated between January 1, 1988 and December 18, 2013: any evidence regarding a mental impairment submitted by one of the four principal facilitators; and medical evidence from two psychiatrists identified by the DA in the referral letter as participating in the alleged scheme, Dr. Edward Sodaro and Dr. Raymond Pierre-Paul.

• [If applicable] The ALJ allowed the individual the opportunity to object to the disregarding of evidence from [Mr. Lavallee/Mr. Hale/Mr. Esposito/Mr. Minerva/Dr. Sodaro/Dr. Pierre-Paul]. [If applicable] The ALJ considered the individual's objections to the disregarding of evidence. [Explanation for the finding].

b. No Reason to Believe That Fraud or Similar Fault was Involved in the Provision of Evidence – Fully Favorable Decision Warranted

If the adjudicator finds, after screening the case or after considering the individual's objections, there is no reason to believe that fraud or similar fault was involved in the provision of evidence in support of the individual's application, then the adjudicator will stop the redetermination process, vacate all prior decisions or determinations associated with the redetermination, reinstate the finding of disability as of the date of original allowance, and incorporate by reference the findings from the prior hearing decision or determination issued on the date of original allowance.

The adjudicator will specifically explain in the favorable decision that:

• The ALJ determined that there was insufficient evidence to establish a reason to believe that fraud or similar fault was involved in the provision of evidence in support of the individual's application and did not disregard any evidence. [Explanation for the finding].

• Based on the unique factual circumstances in this case, the agency is stopping the redetermination.

• The ALJ vacates all prior decisions or determinations associated with the redetermination, reinstates the finding of disability as of [Date of Original Allowance], and incorporates by reference the findings from the prior hearing decision or determination issued on [Date of Original Allowance].

c. Reason to Believe That Fraud or Similar Fault was Involved in the Provision of Evidence

If the adjudicator finds, after screening the case and considering the individual's objections, there is reason to believe that fraud or similar fault was involved in the provision of evidence in support of the individual's application, then the adjudicator will issue a new decision.

The adjudicator will specifically explain in the decision that:

• The ALJ found a reason to believe fraud or similar fault was involved in the providing of evidence from [Mr. Lavallee/Mr. Hale/Mr. Esposito/Mr. Minerva/Dr. Sodaro/Dr. Pierre-Paul] and disregarded that evidence. [Explanation for the finding].

• [If some of the evidence was not disregarded] The ALJ found no reason to believe fraud or similar fault was involved in the providing of the following evidence from [Mr. Lavallee/Mr. Hale/Mr. Esposito/Mr. Minerva/Dr. Sodaro/Dr. Pierre-Paul] and did not disregard those pieces of evidence. [Explanation for the finding].

• The ALJ considered all of the evidence of record, excluding any disregarded evidence, and decided the case on the remaining evidence.

• [If favorable] The ALJ determined that there was sufficient evidence to support a finding of disability as of [Date of Original Allowance].

• [If unfavorable] The ALJ determined that there was insufficient evidence to support a finding of disability as of [Date of Original Allowance]. Therefore, SSA is terminating the individual's benefits and may treat the benefits the individual previously received as overpayments. [If the individual has not filed for bankruptcy] The provisions of Subpart F – Overpayments, Underpayments, Waiver of Adjustment or Recovery of Overpayments, and Liability of a Certifying Officer apply. (20 CFR Ch III Subpart F). The individual may request that the overpayment be waived, and SSA will consider such a request under these rules.

• The individual may appeal the ALJ's decision regarding the issue of disability and the disregarding of evidence.

For all evidence, other than evidence from the sources listed in subsection III.B.2.a., the ALJ will use the procedures in SSR 22-2p to determine whether to disregard evidence because of fraud or similar fault. See also HALLEX I-1-3-15 D. If the ALJ disregards other evidence based on a fraud or similar fault issue, the ALJ must clearly address the other evidence and explain why it was disregarded. See HALLEX I-2-10-14. The individual may appeal the fraud or similar fault finding.

a. Evidence Automatically Disregarded

If the AC receives a request for review in a redetermination case processed under this instruction in which an ALJ, under now rescinded SSR 16-1p: Titles II and XVI: Fraud and Similar Fault Redeterminations Under Sections 205(u) and 1631(e)(7) of the Social Security Act or SSR 16-2p: Titles II and XVI: Evaluation of Claims Involving the Issue of Similar Fault in the Providing of Evidence, automatically disregarded the evidence without a fraud or similar fault finding, the AC will generally grant review. The automatic disregarding of evidence is an error of law that requires the AC to grant review to issue a fully favorable decision or remand.

b. Cases with Fraud or Similar Fault Findings

If the AC receives a request for review in a redetermination case processed under this instruction and the ALJ made a finding regarding whether there was reason to believe that fraud or similar fault was involved in the providing of evidence under now rescinded SSR 16-1p or SSR 16-2p or under SSR 22-1p or SSR 22-2p, then the AC will assess whether the ALJ properly followed the instructions in subsection III. and follow its usual request for review procedures. If a grant review action is appropriate after reviewing the remaining evidence, the AC will follow the instructions in subsection IV.A.5. below.

c. Cases without Fraud or Similar Fault

If the ALJ did not address an issue of fraud or similar fault, but the AC identifies that issue on review, the AC will generally grant review and either remand the case to an ALJ or issue a decision using the language in subsection IV.A.5.c. below.

a. Dismissal of Request for Review

The AC may dismiss requests for review for cases involving fraud or similar fault identified at a prior level of adjudication under the circumstances set forth in HALLEX I-3-4-1. When appropriate, no change to the standard notice is required. However, if the dismissal criteria are present but would result in the payment of benefits, the AC will consult with the Executive Director's Office (EDO) before taking any action.

b. Denial of Request for Review

As provided in subsection IV.A.4., the AC will not deny requests for review in cases in which a prior adjudicator automatically disregarded suspect evidence without determining whether there is a reason to believe fraud or similar fault was involved in the provision of the evidence, or the adjudicator did not provide the individual the opportunity to object to the disregarding of the evidence. The AC may otherwise deny a request for review provided there is no basis under the regulations for granting or dismissing the request (see HALLEX I-3-3-1).

c. Grant Review Action

A grant review action is appropriate if any basis for granting review is present.

The AC may issue a decision to resolve an issue of fraud or similar fault when the file contains sufficient evidence to determine whether there is reason to believe that fraud or similar fault was involved in the provision of evidence, the individual was provided the opportunity to object to the disregarding of the evidence at the hearings level, and a remand is not necessary to decide all adjudication issues involved in the claim.

The AC will evaluate whether it can issue a fully favorable decision in the absence of the suspect evidence. If the record supports a fully favorable decision, the AC will issue the decision following its usual procedures in HALLEX I-3-8 and the instructions below on evaluating fraud or similar fault in the decision, as appropriate.

If the AC is unable to issue a decision, the AC will remand the case for a new hearing and decision.

For example, if the hearing decision did not address whether evidence was being disregarded, but the evidence is identified as “disregarded” in the claim file, and the individual has had the opportunity to object to the disregarding of evidence at the hearings level, the AC may issue a corrective unfavorable decision that disregards evidence from the source(s) identified in subsection III.B.2.a. The AC may also issue a favorable decision when an ALJ erred in disregarding evidence and the redetermination should have been stopped. When reopening issues are involved, see HALLEX I-3-10-7.

1. Remand

   If the AC remands the case, the remand order will identify the suspect evidence and instruct the ALJ to make a finding as to whether there is a reason to believe that fraud or similar fault was involved in the provision of evidence.

2. Decision

   When issuing a decision on a case with a record that contains any of the evidence as outlined in subsection III.B.2.a. above, the AC will use the procedures in SSR 22-1p and SSR 22-2p to determine if there is a reason to believe that fraud or similar fault was involved in the provision of the evidence.

   In determining if there is a reason to believe fraud or similar fault was involved in the provision of the evidence, the AC may consider, among other evidence, the indictments of the four principal facilitators, their plea agreements, and the DA's 2016 referral letter.

   NOTE:

   SSA generally does not develop evidence of an individual's intent. Therefore, a finding of similar fault in accordance with SSR 22-2p is sufficient for the AC to disregard the evidence at issue.

   The AC will also use the procedures in SSR 22-2p and HALLEX I-3-10-5 to determine whether to disregard, based on fraud or similar fault, any other evidence individuals or entities other than those identified in subsection III.B.2.a. above submitted, supplied, or sourced. If the AC disregards other evidence based on a fraud or similar fault issue, the AC must ensure the individual was previously provided the opportunity to object to the disregard of this other evidence, and in the AC decision, clearly address the other evidence, and explain why it disregarded that evidence.

   1. Decision Language - General

      In all decisions, the AC will specifically explain that:

      • The New York County District Attorney's Office (DA) and the Office of the Inspector General (OIG) of the Social Security Administration (SSA) conducted an extensive criminal investigation that resulted in the criminal indictment and conviction of principal facilitators Raymond Lavallee, Thomas Hale, Joseph Esposito, and John Minerva, who admitted to conducting a scheme to make false statements or other representations to SSA in order to obtain fraudulent benefits for others. Numerous individual beneficiaries have also been indicted and convicted in connection with the DA's investigation.

      • The DA referred this case to SSA as one where Mr. Lavallee was the individual's attorney representative, and the facts of the case are similar to those involved in the fraudulent scheme. The file contains evidence from one or more of the principal facilitators regarding a mental impairment(s) alleged in the case that SSA used to find the individual disabled or from one of the doctors the DA identified as having been involved in the scheme. Therefore, the ALJ determined whether the individual was entitled to benefits on or before [Date of Prior Determination or Hearing Decision], the date SSA initially allowed the claim(s).

      • Under section 205(u) of the Social Security Act (Act), SSA must redetermine an individual's entitlement to disability benefits and disregard evidence when there is reason to believe fraud or similar fault was involved in that individual's application for benefits.

      • The ALJ was required to make a finding regarding whether there is reason to believe fraud or similar fault was involved in the providing of the following evidence dated between January 1, 1988 and December 18, 2013: any evidence regarding a mental impairment submitted by one of the four principal facilitators; and medical evidence from two psychiatrists identified by the DA in the referral letter as participating in the alleged scheme, Dr. Edward Sodaro and Dr. Raymond Pierre-Paul.

      • [If applicable] The ALJ allowed the individual the opportunity to object to the disregarding of evidence from [Mr. Lavallee/Mr. Hale/Mr. Esposito/Mr. Minerva/Dr. Sodaro/Dr. Pierre-Paul]. [If applicable] The [ALJ/AC] considered the individual's objections to the disregarding of evidence. [Explanation for the finding].

   2. No Reason to Believe That Fraud or Similar Fault was Involved in the Provision of Evidence – Fully Favorable Decision Warranted

      If the AC finds no reason to believe fraud or similar fault was involved in the providing of evidence from any of the sources listed in subsection III.B.2.a. and does not disregard any evidence, the AC will stop the redetermination process, vacate all prior decisions or determinations associated with the redetermination, reinstate the finding of disability as of the date of original allowance, and incorporate by reference the findings from the prior hearing decision or determination issued on the date of original allowance.

      NOTE:

      The AC will not alter any of the findings or rationale in support of the original allowance because the agency is ceasing all redetermination actions in the individual's case.

      The AC will specifically explain in the favorable decision that:

      • The Appeals Council determined that there was insufficient evidence to establish a reason to believe that fraud or similar fault was involved in the provision of evidence in support of the individual's application and did not disregard any evidence. [Explanation for the finding].

      • Based on the unique factual circumstances in this case, the agency is stopping the redetermination.

      • The Appeals Council vacates all prior decisions or determinations associated with the redetermination, reinstates the finding of disability as of [Date of Original Allowance], and incorporates by reference the findings from the prior hearing decision or determination issued on [Date of Original Allowance].

   3. Reason to Believe That Fraud or Similar Fault was Involved in the Provision of Evidence

      If the AC finds there is reason to believe that fraud or similar fault was involved in the provision of evidence in support of the individual's application, then the AC will specifically explain in the decision that:

      • The Appeals Council found a reason to believe fraud or similar fault was involved in the providing of evidence from [Mr. Lavallee/Mr. Hale/Mr. Esposito/Mr. Minerva/Dr. Sodaro/Dr. Pierre-Paul] and disregarded that evidence. [Explanation for the finding].

      • [If some of the evidence was not disregarded] The Appeals Council found no reason to believe fraud or similar fault was involved in the providing of the following evidence from [Mr. Lavallee/Mr. Hale/Mr. Esposito/Mr. Minerva/Dr. Sodaro/Dr. Pierre-Paul] and did not disregard those pieces of evidence. [Explanation for the finding].

      • The Appeals Council considered all of the evidence of record, excluding any disregarded evidence, and decided the case on the remaining evidence.

      • [If favorable] The Appeals Council determined that there was sufficient evidence to support a finding of disability as of [Date of Original Allowance].

      • [If unfavorable] The Appeals Council determined that there was insufficient evidence to support a finding of disability as of [Date of Original Allowance]. Therefore, SSA is terminating the individual's benefits and may treat the benefits the individual previously received as overpayments. [If the individual has not filed for bankruptcy] The provisions of Subpart F – Overpayments, Underpayments, Waiver of Adjustment or Recovery of Overpayments, and Liability of a Certifying Officer apply. (20 CFR Ch III Subpart F). The individual may request that the overpayment be waived, and SSA will consider such a request under these rules.

      • The individual may appeal the Appeals Council's decision regarding the issue of disability and the disregarding of evidence.

a. Remand

The SRC will handle all AC remand orders for the redetermination of New York cases processed under this instruction. When closing out a case in ARPS, OAO staff will ensure that the remand is routed to the SRC and not the originating hearing office.

OAO staff will update the hearing office code under “Final Routing Information” to 5ZU for “Title 2 Routing” when closing the case in ARPS and send an email to the SRC at |||OHO OCALJ NSD Special Review Cadre to alert the SRC of the remand. For paper cases, OAO staff will mail the claims file to the following address:

b. Decisions

The NEPSC will handle all payment matters relating to redeterminations of New York cases. When a redetermined decision is issued, regardless of whether it is favorable or unfavorable, OAO staff must notify the NEPSC via email at ||NY ARC PCO DPB NEPC. OAO staff will use the subject line “OAO redetermination decision-NY” and include the following message in the text of the email:

OAO has issued a redetermination decision for [individual's name (SSN: ###-##-####)]. The [unfavorable/favorable] decision is [attached/in eView/in ENM]. Please take any necessary action to [cease/initiate] payment in this case and notify any other PSC that may be affected by this action. Thank you.

Send paper folders requiring further action by the NEPSC to: