What Happens if My Employee Traffics SNAP Benefits?

What Happens if My Employee Traffics SNAP Benefits?

If you own or manage a retail store that accepts SNAP benefits, it’s crucial to understand the rules around trafficking and the severe consequences for breaking them. Trafficking refers to exchanging SNAP benefits for cash or other ineligible items. This illegal activity undermines the purpose of SNAP to provide food assistance for those in need. If trafficking occurs in your store, you could face harsh penalties even if you were unaware of the conduct.

Types of Trafficking

There are a few common trafficking schemes to watch out for:

• A cashier gives a customer cash in return for charging their SNAP card. For example, a customer’s card is charged $100 but they receive $50 cash.
• A cashier allows customers to purchase ineligible items like cigarettes with their SNAP benefits.
• An employee buys SNAP-purchased items from customers to resell at the store. This is known as “indirect trafficking.”

Often owners are unaware of trafficking occuring in their stores. But under SNAP rules, you are liable for the actions of your employees. So it’s critical to take steps to prevent trafficking through training and compliance measures.

Penalties for Trafficking SNAP Benefits

If the USDA Food and Nutrition Service (FNS) finds your store trafficked SNAP benefits, you’ll face severe consequences:

Permanent Disqualification

Trafficking SNAP benefits almost always leads to permanent disqualification from the program. This means you would be permanently banned from accepting SNAP payments. For many retailers, this would destroy their business model. According to federal regulations, permanent disqualification applies for:¹

• Trafficking $500 or more in SNAP benefits
• Trafficking any amount after receiving a prior sanction
• Exchanging SNAP benefits for firearms, ammunition, explosives, or controlled substances

Civil Penalties

In addition to disqualification, FNS may impose a civil penalty or fine based on the store’s average monthly SNAP redemptions. Fines can reach $100,000 for trafficking violations.²

Criminal Charges

Trafficking SNAP benefits over $5,000 is a federal crime. First offenses may result in up to 20 years imprisonment and $250,000 in fines. Harsher penalties apply for subsequent offenses.³

Avoiding SNAP Violations

The best way to avoid trafficking violations and protect your business is through preventative action:

• Train employees on SNAP rules and trafficking. Have them sign an acknowledgement of policies.
• Conduct oversight like periodic reviews of inventory records and SNAP redemptions.
• Report suspicious activity to the USDA immediately.
• Install security cameras to deter and detect illegal activity.
• Perform regular audits on SNAP transactions.

If FNS does allege your store engaged in trafficking, consult with an experienced attorney right away. An attorney can help formulate defenses and negotiate the best possible outcome for your business.

SNAP Trafficking Defenses

There are several legal defenses that your attorney may raise to fight SNAP trafficking charges:

Lack of Evidence

FNS has the burden to prove trafficking occurred. If their evidence is weak or circumstantial, your attorney can argue there is reasonable doubt you violated SNAP rules.

Unauthorized Employee Conduct

If an employee trafficked benefits without your knowledge, you may avoid disqualification by proving you had an effective compliance policy and oversight system. However, the owner still may face civil fines.

Innocent Owner

If you purchased a store where prior owners engaged in trafficking, you may avoid disqualification under the “innocent owner” defense by showing you acquired the store in an arm’s length transaction and are preventing further violations.⁴

EBT System Errors

Trafficking allegations sometimes arise due to problems with the EBT system rather than intentional misconduct. Your attorney can argue the evidence stems from technical errors.

Get Legal Help Defending SNAP Violations

SNAP trafficking allegations can have devastating consequences for retail stores. If your business is accused of trafficking, contact an experienced attorney immediately to protect your interests. An attorney can help formulate defenses and negotiate settlements that avoid permanent disqualification whenever possible.