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retail food stamp trafficking

March 21, 2024 Uncategorized

Over the crourse of American history, government officials have developed a basic safety net. This safety net is designed to offer American citizens the help they need in order to meet their basic needs. One basic need that all humans have is making sure they are fed. For needy families everywhere, it can be hard to make sure that everyone has enough to eat. Enter the government. Government officials during the Great Depression developed a program designed to help eliminate hunger in the United States. The goal of this program is make sure that no one goes hungry in America. As such, the people who use it must adhere to certain kinds of rules. These rules aim to make sure that all food stamps are only spent on food rather than anything else instead. Recipients can buy things like bread, cereal, fruit, vegetables, and meat and dairy products. They are not allowed to purchase items such as pet food and soap.

Food Stamp Fraud

Sometimes, people may use food stamps for other purposes. This is known as food stamp fraud. Food stamp fraud can take varied forms. For example, someone may choose to use their food stamps in an attempt to use them for things that are not covered under this program. While it may be tempting to do that, someone who is needy and can’t afford essentials can often find help in other ways from organizations dedicated to serving the needs of the poor.

Another form of food stamp fraud is what is known as food stamp trafficking. When people engage in food stamp trafficking, they agree to sell the food stamps to another party in turn for cash that the person uses to buy items that are not covered under the program such as alcohol or food they consume on the premises. In many instances, this second party that takes the food stamps from them is usually a retailer selling food and other items. They take the food stamps and redeem them from the government and then use the funds to buy additional merchandise to sell.

Modern Methods

As the food stamps program has grown, so has the method used. In previous decades, food stamps were literally paper. This would make it hard for officials to track fraud. Today, when people get food stamps they get a card that resembles many other similar cards such as credit cards. When people use the card, they are given the opportunity to see how much they have paid and how much they have left. In doing so, the system has made it easier to see if there’s any evidence of food stamp misuse. It’s possible to see how the funds are used in great detail. They are able to see what each person buys, where they buy it and how much they are spending on food each time. As people use the cards, they are monitored closely. If there’s any indication that there may a problem, patterns can indicate possible fraud.

Potential Penalties

Those who engage in this kind of food stamp fraud can face all sorts of potential legal problems. People who sell less than a hundred dollars worth of food stamps can be convicted of what is known as a misdemeanor. They can be fined and may be sent to prison. People who engage in larger amounts of food stamp trafficking or do so on more than one occasion may face all sorts of additional fines and the increased possibility of jail time. Both merchants and those who use food stamps may be at risk of such accusations and any possible penalties that come with them.

This is why it is ideal to have help from lawyers who understand the system and can make sure that all evidence is brought out. They will speak to the investigators on the person’s behalf. They will also speak to any legal officials and help explain what really happened. A lawyer can also help make sure that the person who is accused has all legal means at their disposal in order to potential penalties that may include being permanently disallowed from ever using this form of federal assistance.

Don’t deal with retail food stamp trafficking alone. Speak to the Spodek Law Group today.

What is food stamp “trafficking”?

Trafficking is the sale of food stamps for money or non eligible items. A food stamp recipient commits trafficking when they use their food stamps to buy ineligible items or for in exchange for cash. A retail store commits trafficking when they exchange cash for food stamps, or when they sell ineligible items.

Trafficking is defined in section 802 of title 21 of the United States Code. The definition is found in §271.2 which states “Trafficking means the buying or selling of coupons, ATP cards or other benefit instruments for cash or consideration other than eligible food; or the exchange of firearms, ammunition, explosives, or controlled substances, as defined in section 802 of title 21, United States Code, for coupons.”

If you are a retailer you face harsh consequence if you are found to be trafficking food stamps. The agency which investigates food stamp trafficking is the United States Department of Agriculture, Food and Nutrition Service. The USDA FNS investigates retailers that accept snap benefits in several ways.

If a retailer is found to have committed trafficking, the penalties are severe. The FNS may permanently disqualify a retailer for trafficking, and they often do matter of factly without further investigation. For many retailers, disqualification from the snap program is detrimental to their business. Some store simply go out of business if they are unable to accept snap because they can’t compete with stores that do.

Section 278.6 of Title VII of the United States Code governs the penalties for retail stores for trafficking. FNS may disqualify any retail store from participation in the program if the store is found to have violated the Food Stamp Act of 1977. The FNS gathers evidence of a violation by making on site visits to the store, a review of redemption data (particularly inconsistent redemption data), and a review of transaction reports from EBT systems.

If a retail store is disqualified, disqualification is for a period of 6 months to 5 years for the store’s first sanction. If the store is sanctioned a second time, then the period of disqualification is 12 months to 10 years.

The law states that a store found to have committed trafficking will be permanently disqualified from participation in the program.

If a store is disqualified and wants to be reinstated at the end of the disqualification period, the store must file a new application for participation under  §278.1. FNS will review the application as a new application in order to make a determination about whether authorization to participate in the program will be available.

FNS has the discretion to impose a civil monetary penalty (CMP) in lieu of a disqualification.  FNS may impose a civil money penalty of up to an amount specified in §3.91(b)(3)(ii) of this title for each violation in lieu of a permanent disqualification for trafficking, as defined in §271.2. For a retailer, the CMP is the best case scenario because the alternative is permanent disqualification.

When FNS has gathered enough evidence of a program violation or trafficking, the USDA FNS will send the retail store a charge letter. The charge letter will state the violations or actions which FNS considers to be the grounds for disqualification or grounds for the imposition of a CMP. The letter must specify the actions which constitute the violations. The charge letter will inform the retailer that they may respond within 10 days of receiving the letter. The response can be either in writing or orally, by phone.

The retailer must  submit to FNS a response which offers information and evidence regarding the violations or actions. Any explanation of the circumstances will be helpful to a retailer’s case.  The store must send the response to the officer who sent the charge letter.

When a retailer is accused of trafficking, the USDA FNS will send a specific charge letter which details evidence of trafficking. The trafficking charge letter states that the retailer must notify FNS if they wish to be considered for a civil monetary penalty instead of permanent disqualification. This request must be made within 10 days of the letter, and there are no extensions allowed for this. If the retailer does not make a request for CMP within 10 days, or fails to make the request at all, the retailer is barred from getting a CMP in lieu of disqualification.

If the retailer is disqualified, disqualification is effective upon receipt of the notice of determination, even if a request for review is filed. If the administrative or judicial review under part 279 reverses the disqualification, the retailer has no recourse for the value of the loss of sales or revenue during the period of disqualification.

Retailers who request and are determined to be eligible for a civil money penalty in lieu of permanent disqualification for trafficking can continue to  participate in the program pending review and shall not be required to pay the civil money penalty pending appeal of the trafficking determination action.

Retailers that request a CMP in lieu of a permanent disqualification for trafficking must submit to FNS information and evidence stated in §278.6(i), that establishes the firm’s eligibility for a civil money penalty in lieu of a permanent disqualification in accordance with the criteria included in §278.6(i). This information and evidence shall be submitted within 10 days of the charge letter for trafficking.

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