02 Aug 17

Retail Food Stamp Fraud Investigated by the USDA

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Last Updated on: 9th August 2023, 05:36 pm

Retail food stores are expected to comply with USDA laws and regulations relating to food stamps. Failure to do this can lead to investigations and disqualification from the food program. Government food programs are created to help needy families and individuals. Beneficiaries of these programs are given an Electronic Benefits Transfer (EBT) card to help the USDA keep track of the purchases. Retailers who use these programs for their own selfish benefits can receive a fraud charge letter. If your retail store has been charged, it is wise to consult with a violations lawyer. You also need to understand the investigation process so as to take appropriate action.

Initiating the Investigation

The USDA will begin their investigations once they discover inconsistent information. This can be through one of their computer match systems, or from their quality control department. A tip from the public can also trigger an investigation on your store. When the investigations begin, you will receive a charge letter. They may also visit your store or call you to answer some questions. For instance, if your store has been reporting low profits, yet you are still able to cater for your monthly bills, you will have to provide an explanation. If not, they will assume that you have unreported income. It is advisable to consult with your lawyer to learn how best to answer these questions.

The USDA had computer programs in every state to determine the eligibility of the applicants and retailers. The program has been linked with other databases such as the child support office, Bureau of vital statistics, the unemployment office and prison systems. An agent is able to know when one of their beneficiaries loses their job or goes to prison. Any discrepancy is immediately reported, and an investigation is initiated.
It is important to note that just because you have received a charge letter does not mean that you are in violation. There are times when there could be a computer error in your system or even a human error. Once you receive a charge letter, the USDA expects you to respond in 10 days. If you fail to do this, they will make a ruling based on the evidence presented. They could ask that you pay a fine or disqualify you from the program. A lawyer will guide you on how to respond and the documents to present in your defense.

Gathering information

The USDA cannot prosecute you without sufficient evidence that you provided fraudulent information or you knowingly deceived them. They will carry out their own investigations. They can make visits to your store or ask that you provide documents to verify your source of income. Over the years, the USDA has invested in technology to track down violators. One of this is the electronic audit trail. This technology is used to track and identify suspicious activity. They also monitor the EBT systems using the anti-fraud locator. The USDA also employs over 100 investigators and analysts across the country. The team is tasked with monitoring the systems and checking for any suspicious activities. This team also works closely with the police and detectives.

Findings and hearing

When determining whether you are guilty of fraud, there are certain aspects that the USDA will consider. The most crucial one is whether the retail store has a compliance policy. This needs to be in writing and easily accessible to all employees. The compliance policy needs to have been in existent before the USDA issued a charge letter. If you draft a compliance policy after the charge letter, the USDA will view this as an admission of guilt. The USDA may be lenient on stores that have a compliance training program for their employees. The training programs should include how to treat the EBT payments, SNAP and other food program regulations. When deciding on the penalty to issue, the department will consider if the store management was aware and if they benefited from the food stamp violations. Food stamp fraud involvement by the management may result in permanent or temporary disqualification.

If the USDA has sufficient evidence that you committed fraud, they may request that you attend a hearing. At this stage, the violation lawyer should have prepared a case. There are several defenses and strategies that can be used in your defense.

Defenses against retail food stamp charges

When you respond to the charges made against you and the department still holds that you are in violation, the lawyer can initiate an administrative appeal. This appeal is made when the USDA has already issued a letter stating that they will either fine the retail store or disqualify it from the program. Once you receive this letter, you have 10 days to communicate that you intend to make an appeal. Failure to appeal may lead to a penalty, and the store will have to comply with the decision made by the department. When you challenge the decision, the lawyer will present evidence to defend your store. The lawyer will also challenge the decision made by the department in his defense.

If the USDA still insists that you are in violation, the case moves to the judicial review stage. The review is conducted at the Federal District Court. The judicial appeal is conducted like a normal trial case. The lawyer will present his case, and the USDA will provide their evidence. When enlisting the services of a violation lawyer, it is important to ensure that they have trial experience. They will be going up against qualified USDA agents, and they need to make a good case. Remember that the department will also hire their service driven lawyers to defend their claims. It is therefore in your best interest to ensure that you seek legal expertise from a qualified and experienced violation lawyer.

Retail stores rely on revenue from EBT transactions to carry on with their daily operations and to meet their financial obligations. A disqualification could mean losses in terms of revenue. This is why retail owners who receive a charge letter from the USDA should strongly consider the expertise of a violation lawyer.