Want to get on ODSP but don't know how?
I do.
Overpayments? Disentitlements? Think you can't afford a private lawyer and have to get legal aid help?
You're probably wrong.Get Fast, Affordable,
Legal Support
Online
from the lawyer-author
of these Isthatlegal.ca
OW and ODSP
Legal Guides.First read
What I Need To Help You.
Then, within 48 hours of your email I will respond with a no-obligation description of what I can do to help and a firm flat-rate fee quote. Payment is online and can be made conveniently by anyone (eg. friend or relative) with a credit card. While rates are reasonable, pre-payment is required - no exceptions.
Client Testimonials and Thank Yous
simonshields@isp.com Simon Shields, LLB
Lawyer and
Isthatlegal.ca Author
Toronto
|
|
Welfare (Ontario Works) Law
(01 November 2009)
Chapter 12 - Fraud and Prosecutions
- Background and Comment
- Fraud
(a) Overview
(b) Elements of Criminal Fraud
. Overview
. Case Law
(c) "Provincial" Fraud and Aiding & Abetting
(d) Fraud Investigation Process
(e) Analysis and Case Commentary
. Overview
. D'Amour
. Related Cases
(f) Avoiding Fraud Charges
- Eligibility Review Officer (ERO) Investigations
(a) Overview
(b) Entry and Demand
. Clarification
. Entry
. Demands
(c) Warrant Searches
(d) "General" Investigative and Demand Authority
(e) Conflict Between "Entry and Demand" and "General Investigative and Demand Authority"?
(f) Misuse of Consent to Disclose and Verify Information
(g) Government Information-Sharing Authorities
(h) Legal Privilege
(i) Provincial "Obstruction" Offence
- Fraud Control Units
- Charter
(a) Overview
(b) Evidence Exclusion [s.24(2)]
(c) Right to Liberty [s.7]
(d) Unreasonable Search and Seizure (Privacy) [s.8]
(e) A Case in Point: R v D'Amour
. The Facts
. Search and Seizure [s.8]
. Right to Liberty [s.7]
________________________________________
1. Background and Comment
Historically, welfare recipients are subject to criminal punishment out of proportion to the amounts of money involved. Single mothers who defraud to get $5,000 can expect jail time comparable to white collar fraud or embezzlement going into the millions of dollars. Despite the reality that welfare assistance rates are hopelessly inadequate to live on (the single person maximum assistance is $536 per month) - fraud in the name of feeding children is held to be relatively more blameworthy than fraud in the name of excessive wealth accumulation.
The practical vulnerability of welfare recipients to fraud charges is further magnified by the fact that they are subject to an unparalleled level of scrutiny into their personal and financial affairs at both the eligibility stage (see Ch.5 "Eligibility Information"), and through further investigative levels (see s.3 "Eligibility Review Officer Invesitgations" and s.5 "Fraud Control Units", below).
This harsh treatment of welfare recipients was taken to an extreme on 01 April 2000 when a lifetime ban against receipt of any form of provincial social assistance was established for any welfare or ODSP-related conviction committed from that date forward. The ban was the subject of much public debate and an inquest around the death of Kimberly Rogers in Sudbury - and was opposed by public health boards, municipalities, and some police forces. The ban when applied to ODSP recipients (ie. the "proven" medically disabled) was plainly inhumane.
Thankfully, the ban was lifted by the new Liberal government in early 2004.
That said, the issue of fraud and welfare offences still looms large for claimants. The interface of welfare law with criminal law is therefore crucial. Unfortunately, the limited experience of most criminal practitioners with the field, the poverty of the accused, and the perceived legal complexity of the social assistance regime - all combine to dampen legal progress in the area.
Further, the Canadian Charter of Rights and Freedoms - so effective otherwise at protecting the procedural rights of criminal defendants, has proven toothless to protect welfare recipients - with the fruit of all the overly-intrusive information and evidence-gathering tactics available to welfare authorities (again, see Ch.5 "Eligibility Information") being fed directly into fraud prosecutions (see s.5 "Charter Issues", below) without constitutional impediment.
Practically all information exchanges between a claimant and welfare are recorded and are available as a source of evidence for criminal or other prosecution, and practically all personal financial and other documentation is available for the same purpose without any serious retention of the legal privacy rights otherwise enjoyed by citizens at large.
2. Fraud
(a) Overview
While middle-class taxpayers happily conceal income as though it were a national sport and small retailers double-book their way to PST and GST tax fraud with only the rare risk of audit or investigation (and the even rarer risk of provincial or federal non-criminal prosecution) welfare recipients face ongoing and constant investigation to a degree unparalleled by any identifiable class of people except (in recent years) sex offenders.
In my view there are two main reasons for this: administration (and 50% of payment) of welfare is by the local level of government - which tends to make it more subject to close scrutiny, and - overwhelmingly - the pervasive attitude that poverty is somehow a personal - and blameworthy - moral failure.
Some have hoped that the advent of the Canadian Charter of Rights and Freedoms, with its constitutional protections of privacy, against self-incrimination and against unreasonable search and seizure would have changed this situation. However these hopes have proven unfounded. The reality that the poor are effectively compelled by the financial reality of their poverty to disclose intimate financial and personal details of their lives has not softened the hearts of the judiciary. Nor has it dissuaded the pens of legislators - who have so greatly facilitated the ability of investigators to intrude into the private affairs of recipients that there is no detectable remaining area of personal information unshielded from their prying eyes (nor from its use in fraud prosecutions).
As will be seen below, a further insidious aspect of this already significant degradation of privacy and self-incrimination rights is the role of the "eligibility review officer" (ERO) whereby the pretext of "eligibility" assessment is in reality used to facilitate search and seizure powers for criminal fraud investigative purposes - thus circumventing Charter protections. These duplicitous powers are further bolstered by free-standing "obstruction" offences located in the Ontario Works Act, effectively criminalizing non-compliance with ERO demands and investigations by recipients and third parties alike.
This legal 'whip-sawing' of applicant/recipients is further compounded when administrtor suspicions arise and an 'updating' meeting is scheduled. If applicant/recipients does not then fully abase and expose (ie. incriminate)themselves at that session (which may be tape-recorded) in such a session then the invariable "administrative" response is to cancel assistance for "failure to provide information". Courts have consistently refused to acknowledge any degree of state coercion in such practices, hiding behind the shallow pretext that this is not compelled state action as the defendant is has 'voluntarily' come to welfare seeking assistance - and that they were 'free' not to do so. Once having chosen to avail themselves of these optional services, sadly the applicant/recipient has thereby exposed themselves to the full range of criminal sanctions without normal protections afforded to those of us who break and enter, commit murder and otherwise engage in activities more apparently deserving of constitutional protection.
Of course, this is not to say that all welfare claimants are saints and do not commit fraud - but it is to point out that the mastery of the duties of a welfare applicant/recipient is not a simple matter. As Mr Justice Archie Campbell J said while reviewing a ruling of the (then) Social Assistance Review Board respecting the General Regulation under the (then) General Welfare Assistance (GWA) Act, Kerr v Metro Toronto 4 OR (3d) 430 (Div Ct): .... the greatest sympathy for the board in its attempt to interpret a Kafkaesque regulation so complex and ambiguous that it becomes a lawyer's nightmare, ... While the legislation was re-written in 1997, the same complexity and obscurity remains. Contrary to what many would say, I do not (for the most part) view this as a function of poor drafting but rather an unavoidable result of the intricate and exhaustive degree of examination to which claimants are subjected. For current examples of ambiguities and complexities that still exercise the analytic faculties of lawyers and judges, see the discussions of "Loans as Income" in Ch.6 "Income Rules", or the murky legal definition and status of the "independent minor" in Ch.2 "Claimants".
This complexity existing in the law, it is not surprising that it is often only as a result of the more detailed questioning by a worker during an "investigation" that a claimant learns of mistakes in their reporting duties, or some arcane intricacy of welfare law that they have run afoul of.
As well, welfare applicants/recipients - as a class - tend to be more prone to illiteracy, poor education, mental illness, learning disabilities, unfamiliarity with the English language, speaking and hearing disorders, etc - all of which impact their ability to comprehend and assess the meaning and requirements of this complex legal regime. And yet we continue to legal facade [CCC s.19] that for a learning disability, Gr.4-educated, sexually-abused, drug-addicted, single mother of three that: 'ignorance of the law is not an excuse' for committing an offence (although on this point see the Maldonado case reviewed below).
While this is our collective shame, it is also a legal reality that makes it extremely important for applicants, recipients and their advisors to be aware of their rights on the constant eligibility information (and evidence) struggle between themselvs and administrators. The excessive demands and practices of administrators in this regard are the subject of Ch.5 "Information Eligibility".
More essentially - if there is any issue of false statements or material non-reporting having been made in past - either intentionally or inadvertently -claimants should consult a criminal lawyer (of course - in a final irony - no legal aid coverage is available for such situations until AFTER a charge is laid).
(b) Elements of Criminal Fraud
. Overview
The classic statement of the broad nature of criminal fraud under s.380 [then s.338] of the Criminal Code is contained in R v Olan, Hudson and Hartnett 1978] 2 SCR 1175, where Dickson CJ, analyzing the Criminal Code terms "deceit, falsehood or other fraudulent means" and "defrauds", stated: Courts, for good reason, have been loath to attempt anything in the nature of an exhaustive definition of "defraud" but one may safely say, upon the authorities, that two elements are essential, "dishonesty" and "deprivation". To succeed, the Crown must establish dishonest deprivation.
....
The element of deprivation is satisfied on proof of detriment, prejudice, or risk of prejudice to the economic interests of the victim. It is not essential that there be actual economic loss as the outcome of the fraud. As can be seen this definition of criminal fraud is quite broad and encompasses not just overt intentional misrepresentation, but any behaviour which can be characterized broadly as "dishonest" - EVEN in the absence of economic loss (ie. trying but failing to obtain assistance dishonestly can ground a fraud conviction). Further, it is to be remembered that criminal convictions can befounded on both "acts" and "omissions", so that simple silence in the face of a duty to disclose can also ground a conviction.
. Case Law
In R v Maldonado [1998] OJ #3209 (QL) OCJPD, a criminal court considered a charge of criminal fraud against a person who received both welfare and student loans at the same time (the case is further discussed on issues of student loans in Ch.6: "Income Rules: Student and Education-Related Income"). The court dismissed the charge, finding that an element of the fraud offence, that of knowing that the government would be deprived of money, was missing - as the defendant did not know that the money was chargeable income, the non-reporting of which would give him further assistance. The court took great care to distinguish this from an 'ignorance of the law' defence, which is barred under the criminal code. The Maldonado case is essential reading for any criminal lawyer facing such a situation.
In contrast to Maldonado, in R v Bond [1994] OJ #2185 (QL) (OCJGD) the court was faced with a fraud charge where a recipient had accumulated, but not reported assets in excess of the maximums (although she had reported the monies as income when they were received). The court convicted, holding that any motives of selflessness and frugality were relevant to sentencing (she claimed the savings were for her children), not to the element of deceit required for the conviction. Finding that her non-reporting was - on an objective basis - deceitful, the court convicted.
In R v Lalonde 22 OR (3d) 275 (OCJGD, 1995) the court applied a "battered wife syndrome" defence, likening it to a defence of necessity (and despite the absence of expert evidence on the issue) to a woman FBA recipient charged with fraud for lying about having a spouse in the house. Further, the court believed that the Director knew of the situation but did nothing about it thinking that the woman would have been eligible for GWA in any event, so that there was no "deprivation". The court characterized this as 'condoning' the situation.
(c) "Provincial" Fraud and Aiding & Abetting
There are also "provincial" welfare fraud offences 'on the books' [Act s.79], although these are rarely if ever used - the Criminal Code fraud charges [CCC s.380] being preferred as they are broader in scope, penalty and stigma: s.79(1) Ontario Works Act
No person shall knowingly obtain or receive assistance to which he or she is not entitled under this Act and the regulations. The elements of the provincial fraud offence are largely the same, though not identical to that in the Criminal Code. The criminal requirement of "dishonesty" is largely replicated in the provincial offence by the requirement that the person "knowingly obtain or receive assistance to which he or she is not entitled". Note however that the "obtain or receive" requirement in the provincial offence apparently only allows conviction where there has been actual "deprivation" (ie. loss by the administrator), which contrasts with the criminal fraud offence.
The provincial statute also has its own "aiding and abetting" offence [cp. to CCC s.21]: s.79(2)
No person shall knowingly aid or abet another person to obtain or receive assistance to which the other person is not entitled under this Act and the regulations. Procedures for these charges are governed by the Provincial Offences Act.
The maximum penalty on conviction of either provincial offence is $5,000 fine and/or jail of up to six months [Act s.79(4)].
(d) Fraud Investigation Process
"Fraud control units" may be established by the OWA Director at the provincial level, and by each municipality locally. Fraud investigators are formally considered to be engaging in law enforcement activities, which provides their activities and documentary production almost full immunity from review by recipients or their counsel under the provincial or municipal Freedom of Information (FOI) laws.
However, an interested review of the steps leading to a fraud referral to the police (at least in Toronto) is contained in the D'Amour CA case: In March 1997, Mr. Woo, a caseworker with the Department, met with the appellant and asked her to provide him with her T4 slips for the years 1994, 1995 and 1996. He made this request because the Department had received documents suggesting that the appellant, contrary to her representations, had been employed while receiving benefits. Under s. 10 of the Act, the Department could withhold benefit cheques if the appellant did not produce the T4 slips. Mr. Woo told the appellant that benefit cheques would be withheld until she provided the requested T4 slips. She subsequently gave the T4 slips to Mr. Woo and received her benefit cheques. The T4 slips confirmed that the appellant had received some $28,000 in undisclosed income.
Mr. Woo referred the appellant's file to Ms. Woods, an eligibility review worker. It was her job to determine eligibility for benefits under the Act and whether any overpayments had been made. Ms. Woods contacted the appellant's employer and confirmed her employment. She prepared a summary reflecting the income earned by the appellant and the consequent benefit overpayments made to the appellant.
Ms. Woods referred the appellant's file to the Fraud Control Unit within the Department. That unit gathers additional information to determine whether overpayments have been made and, if so, what action should be taken to recover those overpayments. The Fraud Control Unit refers files to the Special Review Committee (SRC). The SRC consists of a Crown Attorney, a police officer, a civil lawyer from the City of Toronto's Legal Department and a welfare supervisor. The SRC decides whether there should be recourse to criminal charges, civil proceedings, or a simple recovery of the overpayments. About ten percent of the files reviewed by the Fraud Control Unit that reveal overpayments are referred to the SRC.
The ultimate determination of whether a matter should be referred to the police for fraud prosecution is made by the SRC. Caseworkers and eligibility review workers are not concerned with whether conduct is fraudulent in the criminal sense and do not interact with the police. They determine eligibility and whether overpayments have been made. These workers appreciate, however, that any time an overpayment is discovered there is always the possibility that the file will eventually be referred to the police for criminal prosecution. (e) Analysis and Case Commentary
. Overview
This last sentence above is a bit obvious. It was the first level case worker that received in inculpatory T4 slips - which directly impeached the earlier representations respecting income by the recipient. Are we to believe that the worker's mind was numb to the possibility of fraud?
It is also obvious that fraud was in mind of the ERO officer who next got the file and who referred the case up to Fraud Control. A review of ERO legislative and regulation authority will show that their powers consist of powers of entry and removal of evidence from premises, demand for inspection, demands for information - supplemented by search warrant request authority for residential dwellings. These sure sound like law enforcement powers to me. Further, Obstruction of an ERO investigation is a provincial offence. While they may be called "eligibility" review officers, within their field they have more investigative powers than police officers.
The last sentence above-quoted is also revealing of an approach to Charter analysis, as was discussed above, that is rigidly and formalistically tied to the eligibility-fraud distinction. This approach is ignores the reality of welfare workers' constant vigilance to fraud, in favour of focussing on the final referral of the matter to the fraud unit or the police. No realistic understanding of the workings of welfare administration accepts that criminal jeopardy - or an administrative consciousness of it - only arises at this later stage. The constitutional and criminal significance of this characterization is that Charter protections only tend to arise when there is "criminal jeopardy" - so the later in the process that fraud concerns are located - the later do constitutional criminal evidentiary protections such as s.7 right to silence and s.8 privacy rights engage.
. R v D'Amour
But reading on in D'Amour shows that these protestations don't really matter anyway, because apparently criminal prosecution is but an ancillary aspect of the proper administration of the welfare regime in any event: I accept the respondent's submission that the use of the T4 slips in the criminal prosecution for the fraudulent receipt of benefits did not amount to the use of the document for a purpose different from the enforcement of the Act. The prosecution for fraud, just like a prosecution under the Act, was aimed at preserving the integrity of a benefits program that depended largely on accurate self-reporting of income. Self-reporting can only work if the state can identify and successfully prosecute those who do not honour their obligation to report fully and accurately. Thus - in D'Amour - criminal prosecution is NOT a qualitatively distinct legal procedure from welfare administration (contrary to that age-old distinction between the civil and the criminal law). Apparently the criminal justice system is actually a supporting agency of the Ministry of Community and Social Services - aiding in the tidy adminstration of Ontario's social assistance program. (One wonders if prosecutions for murder and manslaughter are similarly ancillary to the mandate of the provincial Ministry of Health to care for the well-being of its citizens.)
Not only has the court in D'Amour mistaken the early (indeed ubiquitous)presence of the fraud concern in the welfare administrative process, it has gone further to re-categorize criminal fraud itself as an aspect of that same administrative process. In this fashion the engagement of constitutional procedural protections are even further delayed - perhaps forever.
The net impact of the D'Amour case is to declare "open season" on welfare recipients in terms of fraud investigation. Administrators, already heedless of the actual legal range of their information and evidence demand authorities are now bolstered in their practices by the essentially unfettered ability to use the fruits of these intrusions towards the goal of attaining the only higher category of degradation of human rights above poverty possible, that of complete deprivation of liberty: incarceration. One might argue that "death" is a higher degradation but as we have seen in the Kimberly Rogers case it is not necessarily a consequence distinct from poverty.
The entire tone and thrust of the D'Amour case is indicative to me of the mainstream societal ignorance of the realities of the life of a welfare recipient - who are none but the poor and disabled in our society. I have in past been saddened to see this ignorance reflected in the general bar, but now to see it perpetuated - with such a discriminatory focus - by the province's highest court is simply tragic and disheartening.
. Related Cases
Such issues have been considered in another regulatory context, namely income tax. In R v Ostrowski (Ont Sup Ct, 2008) evidence obtained during an income tax audit was held admissible in subsequent criminal proceedings, Charter s.8 search & seizure and s.7 right to silence protections not applying. Following the Supreme Court of Canada in R v Jarvis (SCC, 2002) the court noted the distinction between an audit function and an investigative function, with the latter having a predominantly penal purpose and being in an adversarial legal context. Further, the court noted from Jarvis that mere suspicion of criminality developed during an audit process did not invoke the Charter.
The court in Ostrowski cited the following test from Jarvis as to when 'the Rubicon was crossed' and a regulatory process converted to a criminal investigation [from Jarvis at para 94]: a) "Did the authorities have reasonable grounds to lay charges?
Does it appear from the record that a decision to proceed with a criminal investigation could have been made?
b) Was the general conduct of the authorities such that it was consistent with the pursuit of a criminal investigation?
c) Had the auditor transferred his or her files and materials to the investigator?
d) Was the conduct of the auditor such that he or she was effectively acting as an agent for the investigators?
e) Does it appear that the investigators intended to use the auditor as their agent in the collection of evidence?
f) Is the evidence sought relevant to taxpayer liability generally? Or, as is the case with evidence as to the taxpayer's mens rea, is the evidence relevant only to the taxpayer's penal liability?
g) Are there any other circumstances or factors that can lead the trial judges to the conclusion that the compliance audit had in reality become a criminal investigation?" This test is designed for the income tax context, but its larger principles can inform the similar social assistance situation. When doing so however care must be taken to acknowledge the unique nature of the ERO in both legal authority and actual practice. For example, Crowns and fraud committees rely heavily - almost exclusively - on EROs for their evidence. This plainly invokes item (d) above, which alone should be decisive of the issue in favour of Charter protection.
(f) Avoiding Fraud Charges
For an extensive discussion of the legal reporting duties faced by applicant/recipients see Ch.5 "Eligibility Information". As was discussed there, in my analysis the eligibility information and "verification" demands placed on applicant and recipients far exceed their duties, and as well the actual legal entitlements of administrators to such eligibility information - and especially evidence.
That said, in the real world of being 'on welfare' there is a clear tension between the legal entitlements of administrators to eligibility information, the applicant/recipient's "rights of privacy" and the risk of administrative disentitlement and fraud prosecution. Not all applicant/recipients may want to assert the strict privacy rights at the cost of constant battle with their local welfare administrator. For those applicant/recipients the safest approach is what can be characterized as chronic "over-compliance".
Basically: report everything - IN WRITING - and let the administrator decide its treatment.
Report all income and assets as soon as they are expected and AGAIN when received. Let the welfare administrator determine how they are going to treat the money (ie. as chargeable in whole, part or not at all) before it is spent. This rule extends by analogy beyond financial disclosure to all areas of information disclosure: possible spousal relationships, income and assets of all members of the benefit unit (including children), employment-seeking efforts, etc.
Report first, fight later on appeal if necessary.
DO NOT presume to know the correct legal result of an issue and therefore refrain from disclosing it to welfare. If the claimant disagrees with a determination then that should be appealed (see Ch.10 "Appeals and Other Remedies") to the Social Benefits Tribunal.
These practices will go a long way to protecting claimants from fraud allegations, and if done consistently then welfare fraud charges would drop dramatically.
Chapter Continues here ... |
|
