SNAP Fraud and Trafficking
If your grocery store or convenience store has been accused of food stamp fraud, then you need an experienced lawyer to represent you. Violations of the SNAP rules in New York carry significant penalties for retailers. If you’ve received a Letter of Violation from the USDA, you must contact a lawyer immediately to fight the charges - you have less than 10 days to put together a defense and respond before you get shut down.
Types of Food Stamp Fraud for Retailers
The United States Department of Agriculture (USDA) provides food stamps through its Supplemental Nutrition Assistance Program (SNAP). SNAP no longer provides actual food stamps, but deposits a certain amount onto an electronic benefit transfer (EBT) card.
The most common type of retailer food stamp fraud is trafficking. This is when you purchase a customer’s SNAP benefits for cash or other items.
If a store employee charges the customer for a fake transaction, or charges them for more than they should pay for an item, in exchange for cash back, the store owner faces permanent, total disqualification from the SNAP program, as well as huge fines and possible criminal convictions and jail time. See recent cases:
https://www.justice.gov/usao-md/pr/nine-retailers-arrested-food-stamp-fraud
http://www.sun-sentinel.com/local/broward/fl-food-stamp-fraud-miramar-20161024-story.html
A common type of food stamp fraud is allowing the customer to purchase ineligible items. The USDA provides information on items that are and aren’t eligible for SNAP purchases. SNAP benefits can be put towards most common household foods, but the customer can’t use them for alcohol, tobacco products, non-food items, hot foods and medicines.
If you allowed a customer to purchase something on that list, then you’d be committing fraud, and without a lawyer to fight your case, you can be kicked out of the SNAP programs and have to pay fines.
Many store owner who receive a letter of Violation are surprised to learn that extending credit to customers - i.e., letting them pay the store back later - will result in a suspension or termination from the program. Many owners make the mistake of admitting to giving credit to customers, thinking that it’s a defense, and end up losing tens or hundreds of thousands of dollars.
Penalties of Food Stamp Fraud for Retailers
There are serious penalties involved if you’re convicted of food stamp fraud. Your penalties will depend on the specific offense and the monetary value of the goods involved.
If you’re found guilty of trafficking, a court in New York can fine you up to $100,000 per instance of trafficking. By the time the USDA has finished its investigation, they have often documented hundreds of transactions that they claim are violations, more than enough to bankrupt any store.
If you sell ineligible items for SNAP benefits, the amount you’re fined will depend on the value of the items and the amount of transactions, as well as the report of the undercover investigator. Another issue with food stamp fraud is that it can lead to you getting disqualified from the SNAP program, either permanently or temporarily. If your store is in a low-income area with a large number of people who receive SNAP benefits, then this can result in a significant loss of income.
How long can you expect a disqualification to last?
Any convictions for trafficking - exchanging SNAP benefits for cash - or selling either guns or controlled substances will lead to a permanent disqualification. Selling tobacco products or alcohol to customers paying with SNAP benefits could earn you a three to five-year suspension. Sale of any other ineligible non-food products could bring a six-month to three-year disqualification.
These aren’t just penalties that no one ever gets, either. In 2015, the owners of Big Boys Food Market pled guilty to food stamp fraud. For the period from April of 2012 to May of 2013, the two brothers who owned the market were found to have exchanged almost $148,000 worth of SNAP benefits for cash.
Even though they cooperated by pleading guilty, the brothers were still sentenced to each make full restitution to the USDA for the $147,658.28 they fraudulently took from the program. One of the brothers received a 12-month prison sentence, and the other received two years of probation along with a five-month sentence for home detention.
Hiring a Grocery Store Food Stamp Lawyer
The best move you can make if you’re dealing with a food stamp fraud accusation is getting in touch with a qualified grocery store food stamp lawyer who can prepare the most effective defense for you.
Your business could be at stake. Considering penalties for food stamp fraud in New York can reach $100,000 and result in jail time, a conviction will be a serious issue for you. That’s not even considering the damage a SNAP disqualification can do to your store’s earning potential if you have quite a few customers who pay for items using their EBT cards.
SNAP is America’s Supplemental Nutrition Assistance Program. It is commonly referred to as “food stamps”. SNAP is a $70 billion government program that ensures hungry low-income Americans can eat. Approximately 44 million Americans collect food stamps. Most food stamp recipients are women, children, elderly, disabled and unemployed. SNAP awards eligible low-income households by placing funds onto the recipient’s SNAP card.
An average household receives approximately $281 monthly while an individual receives $133 a month.The USDA’s rules may encourage SNAP fraud. Recipients cannot buy products that are popular among lower income people such as liquor, tobacco products, toiletries, prepared hot foods, medications and household items with the food stamps. They must buy groceries which consist of fruits, vegetables, meat, seafood, poultry, cereal and bread.
What is SNAP fraud?
Swapping the value of the food stamp’s card for cash, drugs or anything other than groceries is SNAP fraud.
Fraud is suspected by individuals, SNAP program workers, and retail store owners who exhibit the following characteristics:
• Benefits awarded to people who are deceased
• Excessive balances
• High requests for a new debit SNAP card
• High number of new accounts created
• High number of fraudulent accounts
• Large purchases
• Even-dollar purchases for the same retailer
• Number of out-of-state purchases are high
• Multiple transactions conducted in an hour
In fiscal year 2011, the United States completed nearly 798,000 fraud investigations, resulting in over 46,000 disqualified individuals and collection of over $72 million in fraud claims.
SNAP’s fraud rate, however, has been declining for the last thirty four years. It has decreased to 1 cent in 2006 from 4 cents in 1993 and has decreased from a 3.5% fraud rate in 2012 to less than 1.5% today.
Fraud was greatly reduced because SNAP recipients receive an Electronic Benefits Transfer (EBT) card containing the funds awarded instead of the original paper stamps. The paper stamps encouraged fraud because the stamps were easy to counterfeit and even harder to track. The EBT card today is more secure because it requires a PIN to use and eliminates the exchange of cash during purchases.
The USDA is continuously upgrading their policies, procedures and technology to implement new tools that can identify, track and convict those suspected of fraud.
Penalties for SNAP fraud
The severity of the penalty depends on the severity and dollar value of the fraud. The penalties for retailers can reach in the MILLIONS of dollars. For workers, embezzlers have been sentenced to up to 10 years in jail.
Your lawyer will be able to assess your situation and the case against you to set up your defense. If a plea deal is a possibility, your lawyer can negotiate with the prosecutor and get the most favorable terms for you. Contact a Dusenberry & Dusenberry right away to give yourself the best chance at fighting your case.
Please call 718-625-1777 for a FREE TELEPHONE CONSULTATION!
Matthew Dusenberry is a DWI, Criminal Defense and State and City Store License Defense Lawyer in Brooklyn, New York.
Harry Dusenberry has practiced Criminal Defense and DWI Law in New York City for over 40 years.
Law Office of Dusenberry & Dusenberry, 107 Smith Street, Brooklyn, NY 11201. 718-625-1777.
Web: Dusenberrylaw.com
