03-05-2025
- Politics
- San Francisco Chronicle
In leaked memo, Alameda County prosecutors call office's approach to welfare fraud ‘extortion'
A pair of Alameda County prosecutors in the welfare fraud unit said their office practiced a form of 'extortion' in these cases, leveraging the fear of criminal charges to collect money from suspects.
In an internal memo obtained by the Chronicle, the prosecutors said problems had arisen after the district attorney's office, in 2021, assumed responsibility for probing public-assistance fraud allegations, a task previously handled by the county's social services agency.
Now, special investigators employed by the office look for evidence of intentional deception by welfare recipients, and can submit cases to prosecutors for charging decisions. But the memo authors said the investigators ran afoul of California law by implicitly — and sometimes explicitly — threatening the possibility of charges, while at the same time urging interviewees to make repayments.
California law defines extortion as obtaining property through wrongful force or fear, including by threatening to accuse someone of a crime.
By acting in these dual roles, the welfare fraud investigators are 'wading into the territory of criminal extortion,' attorneys Alexandra Grayner and Simona Farrise Best wrote in the Feb. 24 memo to newly appointed District Attorney Ursula Jones Dickson, who is serving in the wake of former DA Pamela Price's recall in November.
A spokesperson for the district attorney's office declined to comment and did not respond to a list of emailed questions. The memo's authors also declined to comment. Farrise Best, who was part of Price's leadership team, no longer works for the office, and Grayner was transferred to another unit.
The complaint represents a fresh tension in the arena of welfare fraud, which has long divided California officials. Some have favored punishment to root out cheating in programs like CalFresh and CalWORKS, while others see reports of fraud as overblown, perpetuating stereotypes of poor Black and Latino residents.
A newly proposed law, Senate Bill 560, would make it far more difficult to charge the crime, raising the minimum alleged fraud eligible for a felony to $25,000 and erasing penalties altogether for attempted welfare fraud.
Shawn Ferris, vice president of the California Welfare Fraud Investigators Association, which opposes the bill, disagreed with the memo authors' argument that the practices by investigators described in Alameda County amounted to extortion. 'Advising them to get on a repayment plan is actually helping them, not hurting them,' he said. 'The prosecutor is going to make a decision one way or another.'
Ferris said that in lower-level fraud cases, 'if you get them to repay, they're not going to do criminal time anyway. The criminal process may not necessarily be the best one, but every case is different.'
Jeff Chorney, an Alameda County public defender who has long represented clients charged with welfare fraud, said the criminal justice system is the wrong place to enforce debt collection. The government has other means of recouping money that doesn't involve prosecution, which can be traumatizing, Chorney said.
'My clients that were charged with welfare fraud are among the most vulnerable people in our population,' Chorney said. 'They're, by definition, people who don't have very much money, don't have stable housing, don't have stable childcare, and now they're being criminally prosecuted because of what, in my mind, usually were paperwork mistakes or misunderstandings.'
The memo raises fundamental questions about how welfare fraud is approached. Across California, investigations are handled at the county level, typically through the local agencies that distribute welfare benefits. This is the case in counties including San Francisco and San Mateo, whose investigators work for social services and forward cases of alleged fraud to district attorneys' offices for review, according to officials with those offices.
But some counties' social services agencies, including those in Alameda, Contra Costa and Orange, contract out welfare fraud investigations — often to district attorney's offices. A spokesperson for the California Department of Social Services said 22 of the state's 58 counties conduct welfare fraud investigations through DA's offices.
The arrangement in Alameda County is based on a 2021 memorandum of understanding that transferred the role of probing welfare fraud allegations to criminal investigators at the DA's office, which would receive $4 million a year to pay for staff and other costs. In a letter recommending the move, former District Attorney Nancy O'Malley and former Social Services Agency Director Lori Cox said it would allow social services staff to focus on providing benefits.
Their successors, Price and current Social Services Agency Director Andrea Ford, signed onto the same memorandum in April 2023.
According to the memo's authors, the unit investigates about $1 million a year of potential fraud. As an incentive, California pays counties back 12.5% of the funds they recover.
Common types of welfare fraud include recipients reporting that a parent is absent when they are actually living in the home; failing to report income; and claiming ineligible children as dependents, according to the Public Assistance Fraud Unit at the Orange County District Attorney's Office.
But while the Alameda County DA's office conducts hundreds of welfare fraud investigations a year, few if any charges were filed under Price, a progressive who was in office from early 2023 until her recall, sources familiar with the matter told the Chronicle. It was not immediately clear how often cases were charged under previous administrations, or whether they have started again under the new district attorney.
In their memo to Jones Dickson, the authors said that most of the investigators' referrals for potential prosecution lacked evidence of an intent to defraud, and that the others could not be proved beyond a reasonable doubt.
Lisa Newstrom, a managing attorney for the legal assistance nonprofit Bay Area Legal Aid, said many cases referred to investigators are the result of simple human error or a misunderstanding of a system 'more complex than filing taxes.' She said it can be difficult to reach a social service worker to ask a question. An 800 number used by Alameda County is frequently out of service, and those who get through may wait on hold for hours.
'For most folks, they just take their best guess, and sometimes they guess right and sometimes they guess wrong,' Newstrom said. 'When they guess wrong, we treat it automatically as intentional fraud, when in most cases it's just doing your best to try and navigate a really complicated system without the help you need.'
Grayner and Farrise Best spent much of their memo laying out what they argued was the inherent conflict in investigators seeking money. Citing transcripts of phone calls and case reports, they said investigators told interviewees that they needed to pay back their debt or confirm they had entered into a repayment plan. In some of the same conversations, investigators alluded to or explicitly mentioned the prospect of a criminal case, the authors said.
For some, a call from a prosecutor's office over a debt was enough to instill fear, with interviewees stating they wanted to stay out of trouble and not go to jail. In the more explicit conversations, the memo said, investigators said they were preparing a report for prosecutors, or said it's possible to 'order an arrest for one not paying the bill.'
In one cited audio recording, an investigator told a person that prosecutors would 'decide whether or not they feel there have been any criminal issues,' and added, 'It works in your favor that you're at least acknowledging it and making an effort to make payments. But like I said, that's totally their call.'
Whether those under investigation are guilty or legitimately owe money is irrelevant, the memo authors said, because the threat of criminal prosecution cannot be used as a means of collecting debt.
Ferris, of the welfare fraud investigators association, said he didn't see a distinction between investigators who worked for social services agencies versus district attorney's offices. Both, he noted, report their findings to prosecutors. 'They're going to be asked to pay the money back one way or another,' he said. 'The difference is the level of accountability.'
Jennifer Turner, an American Civil Liberties Union researcher, called the practice described in the Alameda County memo a 'clear conflict of interest.' Turner, who authored a 2018 report examining partnerships between prosecutors, judges and private debt collectors, said, 'This is a way of using the criminal justice system to terrorize people into paying debts, even when they haven't committed a crime that's worthy of prosecution.'
In the prosecutors' memo, the authors urged Jones Dickson to adopt a list of recommendations that they said would 'cease extortionist practices' in the unit. The guidelines would prevent investigators from discussing a repayment plan, or alternatively downgrade the unit to only pursue cases in a civil manner.
