What is Considered SNAP Fraud and Abuse?

What is Considered SNAP Fraud and Abuse?

The Supplemental Nutrition Assistance Program (SNAP), formerly known as food stamps, provides crucial assistance to low-income families struggling to put food on the table. While the vast majority of SNAP recipients use their benefits appropriately, some engage in fraud and abuse that hurts the program.

This article will explain what is considered SNAP fraud and abuse, who commits it, penalties they may face, and how to report suspected violations. We’ll also look at some real-world examples to understand how SNAP fraud happens in practice.

Types of SNAP Fraud

There are a few main ways that people can commit fraud and abuse within the SNAP program:

• Trafficking – This involves exchanging SNAP benefits for cash or non-food items, which is prohibited. Both retailers and individual recipients can traffic benefits.
• Application fraud – Lying on applications about income, assets, identity, household size, etc. to get more SNAP benefits than entitled.
• Duplication – Applying for benefits in multiple states at the same time to get double benefits.
• Resale – Purchasing items with SNAP, then reselling them for cash.
• Dumping – Purchasing large amounts of stock or inventory using SNAP benefits, then discarding the items.

Some key things to know:

• Trafficking is considered the most serious form of SNAP fraud.
• Unintentional errors are not fraud – fraud requires knowingly violating rules.
• While fraud does occur, it represents a very small percentage of SNAP activity.

SNAP Fraud by Retailers

Some dishonest retailers commit SNAP fraud in a couple main ways:

• Trafficking – Exchanging cash for SNAP benefits. This may involve practices like:
  • Giving a customer $50 cash for $100 in SNAP benefits.
  • Allowing customers to purchase ineligible items like alcohol, tobacco, or household supplies with SNAP benefits.
• Falsifying applications – Lying on their application to be authorized to accept SNAP. For example, concealing past disqualifications or convictions.

When caught, retailers can face tough penalties like:

• Fines up to $100,000 per violation
• Permanent disqualification from SNAP
• Forfeiture of assets involved in the fraud
• Jail time in severe cases

SNAP Fraud by Recipients

There are also ways that individual SNAP recipients can commit fraud, such as:

• Trafficking – Selling SNAP benefits for cash, drugs, or other ineligible items.
• Application fraud – Lying about income, assets, identity, household size, etc. to get extra benefits.
• Duplication – Applying for benefits in multiple states at the same time.
• Resale – Purchasing items with SNAP, then reselling them for cash.

If caught, recipients may face consequences like:

• Repayment of improper benefits
• Disqualification from SNAP for 1 year to permanent
• Fines up to $250,000
• Jail time up to 20 years (for trafficking $5,000+ in benefits)

Real-World Examples of SNAP Fraud

To understand how SNAP fraud happens, let’s look at some real cases:

Example 1: Retailer Trafficking

A small corner store engaged in trafficking by allowing customers to purchase cartons of cigarettes and cases of beer with their SNAP benefits. They would ring up the purchases as “bread” and “milk” to hide the fraud. This went on for over 3 years before being caught, defrauding SNAP of $1.2 million.^[1]

Example 2: Recipient Application Fraud

A SNAP recipient failed to report all household income on her application, including her spouse’s full-time salary. By omitting this income, she received $8,400 more in SNAP benefits over 1 year than she was entitled to. She pled guilty to SNAP fraud and was ordered to repay the money.^[2]

Example 3: EBT Card Trafficking

An individual sold his EBT card and PIN to undercover investigators on two occasions for cash, which is prohibited trafficking. He claimed he needed cash to pay bills. As a result, he lost SNAP eligibility for 12 months and had to repay $300 in illegally obtained benefits.^[3]

Reporting Suspected SNAP Fraud

If you suspect SNAP fraud, you can report it by:

• Contacting your state SNAP agency – they investigate recipient fraud.
• Calling USDA’s Inspector General hotline at (800) 424-9121 or submitting a complaint online – they investigate retailer fraud.

You can report anonymously. Provide as much detail as possible about the suspected violation.

SNAP Fraud Hurts the Program

SNAP fraud and abuse divert funds from families who critically need help buying groceries. While not widespread, any fraud undercuts the program’s integrity and effectiveness. Being aware of common SNAP violations and reporting suspected fraud protects this vital assistance for the Americans who rely on it.

If you have any other questions about SNAP fraud, your local SNAP agency can provide more information and guidance.

References

1. What is Considered SNAP Fraud and Abuse?

   The Supplemental Nutrition Assistance Program (SNAP), formerly known as food stamps, provides crucial assistance to low-income families struggling to put food on the table. While the vast majority of SNAP recipients use their benefits appropriately, some engage in fraud and abuse that hurts the program.

   This article will explain what is considered SNAP fraud and abuse, who commits it, penalties they may face, and how to report suspected violations. We’ll also look at some real-world examples to understand how food stamp fraud happens in practice.

   Types of SNAP Fraud

   There are a few main ways that people can commit fraud and abuse within the SNAP program:

   • Trafficking – This involves exchanging SNAP benefits for cash or non-food items, which is prohibited. Both retailers and individual recipients can traffic benefits.
   • Application fraud – Lying on applications about income, assets, identity, household size, etc. to get more SNAP benefits than entitled.
   • Duplication – Applying for benefits in multiple states at the same time to get double benefits.
   • Resale – Purchasing items with SNAP, then reselling them for cash.
   • Dumping – Purchasing large amounts of stock or inventory using SNAP benefits, then discarding the items.

   Some key things to know:

   • Trafficking is considered the most serious form of SNAP fraud.
   • Unintentional errors are not fraud – fraud requires knowingly violating rules.
   • While fraud does occur, it represents a very small percentage of SNAP activity.

   SNAP Fraud by Retailers

   Some dishonest retailers commit SNAP fraud in a couple main ways:

   • • Trafficking – Exchanging cash for SNAP benefits. This may involve practices like:
       • Giving a SNAP recipient $50 cash for $100 in SNAP benefits.
       • Allowing customers to purchase ineligible items like alcohol, tobacco, or household supplies with SNAP benefits.

   When caught, retailers can face tough penalties like:

   • • • Fines up to $100,000 per violation
       • Permanent disqualification from SNAP
       • Forfeiture of assets involved in the fraud
       • Jail time in severe cases

   SNAP benefits are intended to be used to purchase food items for home consumption. There are restrictions on what can and cannot be purchased with SNAP benefits.

   According to the USDA, households generally CAN use SNAP benefits to buy[1]:

   • • • Fruits and vegetables
       • Meat, poultry, fish
       • Dairy products
       • Breads and cereals
       • Snack foods and non-alcoholic beverages
       • Seeds and plants that produce food for the household

   Items that CANNOT be purchased with SNAP benefits include[2][3]:

   • • • Alcoholic beverages
       • Tobacco products
       • Vitamins, medicines, supplements
       • Prepared hot foods
       • Pet food
       • Household supplies, hygiene items

   SNAP benefits are intended to supplement a household’s food budget. Most households spend additional cash to fully meet their food needs[4].

   Banning certain items like soft drinks with SNAP is unlikely to change buying habits, since households can just use cash for restricted items[5]. There are better ways to promote healthy eating among SNAP recipients[6].