Mar 21, 2024

Trafficking – EBT PATTERNS

Food Stamp Fraud: A Serious Crime with Consequences

The Reality of SNAP Benefit Fraud

It used to be easy for babysitters to collect payments for children in their care while their parent collected benefits in a neighboring state. It was easy to collect for three children when you only had two. Even if your worker recognizes you and is familiar with your case, your worker has never been to your home. The worker doesn’t know which ones are really your children. It’s easy to collect extra money.

Considering the Consequences

If you exchange your food stamps for money or collect more benefits than you are entitled to, you should wonder what will happen to your children if you get arrested.

Food Stamp Fraud

Major Trafficking Case in Brushton, New York

Thirty people in Brushton, New York, were arrested for food stamp fraud at the Old Time Butcher Block Store. The store’s owner Dennis Sauve was also arrested. New York state police reported that the individuals used their **EBT benefits** to buy alcoholic beverages. Sauve (45) was charged with third-degree grand larceny for perpetrating the fraud. According to New York law §155.35, third degree grand larceny is a **class “D” felony** requiring two to seven years in prison.

Retail Store Fraud Statistics

Most food stamp fraud is committed by retail stores, not by food stamp recipients. The 30 arrests were the result of a thorough investigation by the USDA, the New York office of Temporary Disability Assistance, and the Franklin County District Attorney’s office.

Small Stores

The U. S. Department of Agriculture reported, on June 2, 2017, that the vast majority of food stamp fraud occurs in small stores.

Recent Program Participation Trends

New retailers participating in the Supplemental Nutrition Assistance Program (SNAP) increased **40 percent** during the last five years. Most electronic benefit transfer (EBT) payments are spent in large chain supermarkets. Less than 0.5 percent of all food stamp fraud occurs where 82% of the benefits are spent.

Omissions

Unreported Changes in Household Status

Failure to report a decrease in rent or an additional person with income added to your household is fraud. Maybe, it’s an honest mistake. Agencies income average, and your sister’s grown child only stayed with you for the summer while he was out of college. You had another mouth to feed. The extra money didn’t go far. Maybe these omissions are excusable or only result in a temporary reduction in your benefits. Food stamp fraud less than $100 per month is a **misdemeanor**.

Fraud

If you use your benefits to purchase products other than food, you commit welfare fraud.

Trafficking Schemes

A small retailer can charge you food stamps for food even if you really purchased gasoline. These small retailers tend to manually enter grocery codes for fraudulent purchases rather than scan a product’s bar code. If you exchange your food stamps for money to pay a bill, you are guilty of fraud. Exchanging food stamps for money or nonfood items is called trafficking.

Repayment of $5 Million

Seven Rock Hill, South Carolina, women pled guilty to food stamp fraud and were ordered to repay $20,000 by December 2017.

Individual Restitution Amounts:

• Jatonica Williams, (31), owes $5,238. • Dequitta White (31) owes $3,070. • Labrecia White (24) owes $2,962. • Shenisa Davis (36) owes $2,549. • Victoria Sanders (25) owes $2,234. • Kimberly Johnson (28) owes $2,195, and • Brooke Rogers (27) owes $2,134.

Merchant Consequences

Three merchants involved in the $5 million food stamp trafficking case may have thought they were helping the poor, but they face **five years behind bars**. They have to repay the $5 million. Their sentences may be reduced by the federal court if they testify against food stamp recipients who used their benefits illegally.

Sale of EBT Cards

Illegal food stamp cards have been openly sold on Craig’s list and Facebook.

Joint Responsibility for Fraud Prevention

Elimination of food stamp abuse is the joint responsibility of the federal government and the state governments administering the programs. The USDA Office of the Inspector General investigates criminal violations of the Food Stamp program. Unlawful possession or use of food stamp cards in excess of $100 is a **felony**.

Replacement Cards

Only **21%** of all recipients ever ask for replacement cards.

New Investigation Requirements

In April 2016, the USDA finalized a rule requiring a trafficking investigation when a recipient reports a lost or stolen cards. An excessive number of replacement EBT cards is an indication of fraud. It probably means the recipient is exchanging the benefit card for money, but it requires investigation.

Federal Trafficking Rules

The Federal Food and Nutrition Service (FNS) amended SNAP regulations, 7 CFR 274.6, to give states the authority to refuse to replace EBT cards. Furthermore, the FNS expanded its definition of “trafficking” to include buying or selling snap benefits in person or online through social media sites. The FNS now requires states to monitor the replacement of food stamp cards.

Investigations

State Agency Requirements

Under the new regulations, state agencies must initiate an investigation into the need for a replacement card. The recipient must provide a written explanation for the need for a replacement card.

Fraud Detection Systems

The household’s purchases are flagged as potential food stamp trafficking in the FNS fraud detection system. Household or individual is defined in Rule 7 CFR 273.16(b)(11). The law denying an individual a replacement card adversely effects all members of a household, which is not the intent of the new regulations.

Obama Administration Initiatives

The new snap regulations were enacted by the Obama Administration to reduce waste and to fight fraud, abuse, and misuse of federal assistance programs.

Proposed Regulations

The new regulations expended the definition of food stamp fraud.

Enhanced Merchant Penalties

A proposed new law will make it possible to **permanently disqualify** a merchant guilty of food stamp trafficking. The proposed regulations give the USDA the authority to immediately suspend payments to the retailer suspected of fraud. Proposed new regulations give the USDA the authority to attach a monetary fine to the merchant’s disqualification.

Trafficking – EBT PATTERNS