She probably wasn’t even breaking any rules... lol. Plus if you won a million bucks in the lottery, its not considered ‘income’ and you can still get food stamps and stuff.
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Living in a high end neighborhood is not exactly a crime. If she bought the home with public housing vouchers - and truthfully reported where she was living, the feds and state government don’t have a legal leg to stand on. If it was legal to buy her home and no one objected, they can’t say she broke the rules now.