People committing welfare fraud are at minimum required to pay back funds gained from the welfare system. They could also face a prison sentence of two-to-six years according to state laws and may be convicted of theft or perjury, explains Nolo.
The reason welfare fraud is policed so strongly is because it threatens the goal of the justice system in discovering and honoring the truth. Additional consequences include no longer receiving benefits, states the Cornell University Law School Legal Information Institute.
To understand the punishment for welfare fraud, one must first understand what constitutes welfare fraud. It is defined as illegal ways of obtaining financial assistance and the intentional obscuring of information used to determine welfare eligibility so as to receive an overpayment of benefits. For clarification purposes, "welfare" includes the food stamp program, housing assistance and other state funded programs, according to Nolo.
State programs discover welfare fraud through special programs. Individuals may also report welfare fraud using a form from the Social Security Administration website. The Early Fraud Program from the Los Angeles County Department of Public Social Services investigates potential recipients of the welfare program before benefits are given. Field/Prosecution Units investigate claims and follow up leads on unreported employment, marriage, income or family household members. There are also hotlines where others can call in to report suspected welfare fraud.