30 May 18

Food Stamp Fraud Trafficking – Extending “CREDIT” to Customers

| by

Last Updated on: 9th August 2023, 12:16 am

The USDA or United States Department of Agriculture runs the government issued SNAP program that many call the Food Stamp Program. When started, this program issued paper checks that were called “vouchers” to the eligible participants in the program every month. The participants would then have to take these vouchers to the grocery store to purchase the allowed foods and beverages. This program is intended to help very low income individuals and families. New York City has many retailers that participate in this benefit program by providing the eligible food products that customers buy with their snap benefits.

Like any government program, this one had some fraud cases that were uncovered early on. The agency opened up a fraud investigating unit that very aggressively tracks and thoroughly investigates abuse and fraud reports and suspicions. To combat the fraud, the program initiated an electronic system that replaced the easily counterfeited vouchers with an electronically loaded debit style card that works just like ones from a bank. Now, fraud investigators can digitally trace transactions thought to be fraudulent in order to build fraud cases against the perpetrators. This could be an individual person that doesn’t report all of their monthly income in order to qualify for the benefits.

The investigators can also catch retailers that allow snap participants to get cash for their SNAP dollar benefits. To do this, savvy retailers cook their books to make it look like the participant purchased food products. Other fraud concerns retailers that do not request the proper identification. Individuals that are not eligible to get snap benefits can then use or cash in the benefits from someone else’s card. Criminals often run scams where they apply for benefits using a dead person’s identity information or some other ruse. Another abuse of benefits involves retailers allowing snap benefits to be used when buying ineligible items like cigarettes, alcohol and even drugs.

There are many confusing rules that participants including retailers must follow to be in compliance. Store owners must train their clerks on which items can be bought with snap benefits, and which cannot. A juice might be on the eligible list, but another soda drink may not be. Some are easier than others to remember. The government doesn’t want needy individuals to waste more money purchasing foods prepared by a store and sold hot. However, they might be allowed to purchase some store made cold items.

Another ruse that unscrupulous retailers can use is to extend “credit” to customers, then taking the benefits when the card is loaded the next month. This is considered illegal. While a customer could do this with their own money, they can’t with government issued benefits intended for food purchases. The agency investigators flag stores that have unusual patterns of retail sales with snap benefits. Often, investigators will partner with local law enforcement to do undercover sting operations where police or their decoys pretend to be snap participants. The agency gives the police decoy SNAP benefits that are used to catch illegal SNAP violations and fraud.

Some honest retailers could get caught up in this issue due to various reasons. Mistakes can happen, such as a clerk allowing snap benefits to be used without requiring ID. Another scenario has another clerk ringing up a banned item to be paid for with snap benefits. The store owner could be totally unaware. Some clerks do this to steal some of the cash for themselves leaving their employer vulnerable if investigators are alerted to their store. A retailer that has been notified by the government that they are suspected of snap violations needs to consult with a knowledgeable attorney straight away.

Food stamp trafficking is a real crime that carries hefty monetary fines and stiff jail sentences. Any fraud of $100 or more is considered a felony crime with long years of jail time if convicted. A competent lawyer that specializes in these cases, like NYC criminal Attorneys working at Spodek Law Group, are able to help. Call them first for a free consultation appointment to discuss the specifics of your case. Log onto to read more about Food Stamp Fraud Trafficking crime details and what can be done in your defense.

Food Stamps and Relevant Business Practices

Understanding Food Stamps in New York

Sometimes, people in New York rely on the assistance of food stamps so that they can feed their families. Grocery stores and many other retailers that sell food that can be purchased with food stamps rely on the customers who have these benefits so that they can stay in business, especially in low-income areas. Most recipients and businesses see food stamps as a form of a cash payment, but the government sees the benefits as strictly for the purpose of purchasing food for the family instead of using the benefits to buy alcohol, toiletries, and tobacco.

Regulations Surrounding Food Stamp Benefits

There are regulations that states have to follow in order for people to receive food stamp benefits. The recipients of the benefits also have to follow strict regulations that include reporting any income changes, especially if the income amount increases, and reporting whether someone moves into or out of the home as these changes can impact the amount of the benefits received each month.

One of the ways that businesses can get in trouble is to treat food stamp benefits like cash, offering credit to recipients like they would if customers had a credit or debit card. This is called food stamp trafficking. It’s also classified as food stamp fraud.

Consequences of Food Stamp Trafficking

Any business that takes part in trafficking could risk losing the ability to accept food stamps from customers. If there is evidence that trafficking has taken place for a significant amount of time, then the business could be closed until the proper penalties have been satisfied. Businesses that claim that they didn’t know offering credit in exchange for food stamps shows ignorance of the laws of the state and is often not a defense that can be used if the business is suspected of fraud.

Seeking Legal Support in Cases of Trafficking or Fraud

If a business is charged with food stamp trafficking or fraud, then the best option is to seek the assistance of an attorney. Offering credit not associated with food stamp benefits usually isn’t an issue for businesses. Businesses can offer IOU options to customers who are unable to pay for all of the merchandise that they want or need. However, this is left to the discretion of the business. If a business extends credit options with a food stamp card instead of a credit or debit card or cash, then this is an illegal act. Aside from being banned from participating in the food stamp program, the owner of the business could face time in jail.