A 4-3 decision from the Colorado Supreme Court has prompted one justice to call on the legislature to change the theft law, citing the "dangers" of convicting a person for stealing public benefits without considering whether they were actually eligible for some portion of the amount.
At issue was how to calculate the dollar figure of fraudulently-obtained government medical assistance under an unclear state statute. The High Court narrowly split on whether every dollar taken counted as theft, or only the extra amount a person was able to receive for lying about their income.
Justice Maria E. Berkenkotter, a proponent of the latter approach, warned about “the dangers” of assuming a person would be ineligible for any assistance had they correctly stated their income.
“I urge the legislature to adopt a statute more tailored to this context; that is, a provision that specifically addresses theft of public benefits and fairly balances the prosecution’s burden with the rights of recipients of public assistance,” she wrote in the dissenting opinion.
Between 2009 and 2016, Alma Vidauri filed for public health insurance benefits with the Garfield County Department of Human Services. However, she failed to update the county about subsequent fluctuations in income, including her marriage, even though she noted those on her federal taxes.
For example, she reported the average monthly income for her and her husband was $2,900 at most until he lost his job, after which the income dropped to $720. But she never disclosed the businesses that she and her husband owned which generated up to $37,000 in profit annually, and also their investment properties.
Nevertheless, the county continued to enroll Vidauri’s children in the state’s Child Health Plan Plus, an insurance program in which enrollment fees and copays vary by income level. Vidauri's family received in excess of $31,000 in benefits from 2009 to 2016, after which a jury convicted Vidauri for her misrepresentations. In addition to forgery, her convictions included class 4 felony theft, which applies when the amount stolen is between $20,000 and $100,000.
Under Colorado law, theft occurs when someone obtains a thing of value by deception. The government argued that Vidauri's misrepresentation of her income meant Garfield County could not properly assess her eligibility for benefits. Therefore, she was entitled to nothing and all of the benefits taken amounted to theft. Vidauri's attorney countered there was no evidence her client would be ineligible had she reported her correct income.
After the Court of Appeals reviewed her case, a three-judge panel found in September 2019 that it was indeed plausible Vidauri meant to commit theft, despite arguments about her limited education and English proficiency. Nonetheless, the panel believed Vidauri might have been eligible for some benefits, and the prosecution needed to prove how much overpayment there was due to the misrepresentation.
State law did not require the prosecution to introduce such evidence. But believing that the state was capable of finding out the dollar value of benefits obtained fraudulently, the panel adopted the “overpayment approach” for future cases, requiring proof of excess payments. The judges consequently downgraded Vidauri’s conviction to petty theft.
The state subsequently asked the Supreme Court to weigh in, and the justices agreed that the ambiguity of the theft law left open the possibility of either the overpayment approach or the “total value approach,” in which the criminal conviction stems from the aggregate amount of benefits received.
Other states have diverged on how they treat stolen government benefits. In Ohio, where the theft statute is similar to Colorado’s, the state Supreme Court reasoned in adopting the total value approach that monetary benefits are the property of the government until a defendant qualifies by truthfully representing their eligibility. On the other hand, the California Supreme Court decided that only the excess amount of benefits received due to fraud qualifies as a loss to the government.
In urging the adoption of Ohio's policy, the attorney general's office argued to the Colorado Supreme Court that "[e]ven if the department might have paid some benefits for defendant had it been presented with honest and accurate information, it was never presented with honest and accurate information."
Accordingly, the four-justice majority in Colorado chose the total value approach for a simple reason: “Eligibility is not entitlement.”
“Once the Department properly determines that an applicant is eligible to receive benefits, the applicant becomes entitled to receive those benefits as long as she remains eligible,” wrote Justice William W. Hood III in the Court's Monday opinion. Until that determination happens based on Vidauri’s actual income level, "she is not entitled to — meaning, she has no cognizable property interest in — any benefits.”
Therefore, Vidauri’s receipt of medical benefits in excess of $20,000 qualified her for a class 4 felony, and the majority reinstated her conviction.
Justices Monica M. Márquez, Melissa Hart and Berkenkotter criticized the majority’s decision, arguing it eliminated the prosecution’s burden to prove the amount of benefits taken illegally.
“This approach is unprecedented in that it can penalize defendants by requiring them to pay more than they stole,” wrote Berkenkotter for the dissenters.
Under the Colorado Medical Assistance Act, the government may recover any amount of medical assistance to which a recipient was not entitled. The dissenting justices interpreted that stipulation to mean the law addressed only the benefits someone received in excess of what they were legitimately entitled to. Berkenkotter illustrated that the overpayment approach already applies to other types of fraud.
“For instance, if an employee fills out time sheets claiming to have worked 2,000 hours in a year and is paid for 2,000 hours, when he or she only worked 1,900 hours, there is no basis to suggest that the employee must forfeit all of his or her wages for that year,” she wrote. “That is effectively what the majority is concluding here.”
Berkenkotter further contended that a seriously ill person convicted of theft will necessarily face a harsher penalty because the value of their benefits will be higher. Several arguments in the dissent mirrored those of the Ohio Supreme Court, which — also by a 4-3 vote — endorsed the total value approach in 2001.
"Surely the state has more pressing business than prosecuting our society’s most downtrodden for receiving benefits to which they are entitled," wrote then-Justice Paul E. Pfeifer.
The case is People v. Vidauri.
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