(d) Each county which operates an early fraud prevention and detection program shall be subject to all of the following conditions:

1. (1) No intimidation of applicants or recipients shall occur, either by referral or threat of referral for a fraud investigation.
2. (2) Applicants shall not be referred for a fraud investigation until after they have completed and signed the application for aid.
3. (3) The referral and investigation shall not delay the receipt of aid, including immediate need payments, for eligible applicants and recipients.
4. (4) Uniformed investigators shall not be used by any county welfare department for its fraud prevention program.
5. (5) The county welfare department shall abide by the confidentiality requirements in Section 10850 and the requirements and protections in the California Right to Financial Privacy Act under Chapter 20 (commencing with Section 7460) of Division 7 of Title 1 of the Government Code.

6. (6) The county shall make a referral for welfare fraud investigation when there is reason to believe that fraud exists. Fraud exists when a person, on behalf of himself or herself or others, has done any of the following:

   1. (A) Knowingly, and with intent to deceive or defraud, made a false statement or representation to obtain benefits, to obtain a continuance or increase of benefits, or to avoid a reduction of benefits.
   2. (B) Knowingly, and with intent to defraud, failed to disclose a fact which, if disclosed, could result in a denial, reduction, or discontinuance of benefits.
   3. (C) Accepted benefits knowing he or she was not entitled to those benefits, or accepted any amount of benefits knowing the amount of benefits received was greater than the amount to which he or she was entitled.
   4. (D) Made any statement which he or she did not know to be true with reckless disregard of the truth, for the purpose of obtaining, continuing, or avoiding a reduction or denial of benefits.

7. (7) The county shall make a referral for fraud investigation when there are reasonable grounds to believe that fraud, as specified in paragraph (6) exists. Reasonable grounds exist when one or more of the following criteria exists:

   1. (A) An overpayment or overissuance of benefits, or both, may result from an applicant’s failure to report information pertinent to eligibility or benefits.
   2. (B) A questionable situation exists and the applicant or third party acting on behalf of the applicant will not cooperate in providing necessary verification of information which would affect the applicant’s eligibility or the amount of benefits for which the applicant is eligible.
   3. (C) The county welfare program staff person finds conflicting information which could affect the applicant’s eligibility or the amount of benefits for which the applicant is eligible, and any further action on the part of that staff person could jeopardize the investigator’s ability to investigate.
   4. (D) The county is made aware of any situation involving the applicant that could involve embezzlement, collusion, conspiracy, trafficking, black marketing, or any other general program violations.
   5. (E) The county is made aware of any situation in which the applicant may have forged, may have caused the forgery of, or is using a forgery of, any warrant or authorization to participate which has been negotiated.
   6. (F) The county welfare program staff person has received an allegation of fraud with respect to the applicant from any governmental agency.
   7. (G) The county has received a complaint containing facts which allege that a crime involving a public social services program, including, but not limited to, fraud, perjury, trafficking, or embezzlement may occur.