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The Virginia Department of Social Services Agrees to Pay $7.1 Million to Resolve Allegations that it Violated the False Claims Act

Sometimes alleged fraudulent activities committed against the government are nurtured by an entire administrative culture. This was the case when last month the Justice Department announced that the Virginia Department of Social Services (VDSS) had agreed to pay the government $7,150,436 to settle allegations that it violated the False Claims Act in regards to the Supplemental Nutrition Assistance Program (SNAP). SNAP is a program administered by the U.S. Department of Agriculture (USDA) that provides financial assistance for low-income families and individuals to buy nutritious food. Since 2010, SNAP has served more than 45 million Americans per month. “SNAP is an important vehicle for helping needy families,” said Acting Assistant Attorney General Chad A. Readler of the Justice Department’s Civil Division. “This settlement reflects the Justice Department’s commitment to ensuring that taxpayer funds are spent appropriately so that the public can have confidence in the integrity of vital programs like SNAP.”


The government relies on the states to determine the eligibility of applicants, to administer benefits for the same and to perform quality control to ensure that the eligibility decisions are correct. The USDA reimburses states for their administrative expenses in administering SNAP. The government also pays performance bonuses to states that report the lowest and most improved error rates each year. Finally, it can also impose monetary sanctions for states that do not improve. VDSS admitted, as part of the settlement, that beginning in 2010 it retained a quality control consultant to reduce its SNAP benefits determination error rate by training QC workers to “use whatever means necessary” to find a benefits decision “correct” rather than in error. Moreover, VDSS admitted that when control staff could not find a benefits decision to be correct, that they were instructed to find a reason to drop the case. Through its use of these biased methods, VDSS was improperly awarded USDA bonuses from 2011 – 2013.


VDSS further admitted that QC workers did not want to use the methods proposed by the consultant VDSS retained. VDSS said that the QC workers did not wish to do so because they believed the method lacked integrity, injected bias into the QC process and that it violated USDA regulations. QC workers communicated these concerns to their manager but were pressured by being threatened with termination and negative performance reviews. VDSS also admitted that workers who complained about the process were denied teleworking and flexible scheduling privileges and otherwise harassed. As part of the settlement agreement, VDSS has taken corrective actions that began back in 2015. Namely, it agreed to terminate its use of the improper quality controls methods devised by Julie Osnes Consulting.


“We appreciate the commitment and investigative assistance provided by our partners at the U.S. Department of Justice’s Civil Division, U.S. Attorney’s Office, and Virginia Office of the State Inspector General,” said Special Agent-in-Charge Bethanne M. Dinkins of the USDA Office of Inspector General (OIG). “We also wish to note the technical assistance provided by our colleagues in the Office of Audit at USDA, OIG. During our investigation, we worked together to address the concerns of state employees and others who alleged that the integrity of the SNAP quality control process was weakened by third-party consultants.” Tips and complaints from all sources about potential fraud, waste, abuse, and mismanagement, can be reported to the Department of Health and Human Services, at 800-HHS-TIPS (800-447-8477). If you have chosen to disclose wrongdoing it is also advised that you contact a false claim act attorney. Whistleblower lawyers specialize in all areas related to the False Claims Act and will be able to advise you on such matters.