Transfer of Ownership Civil Money Penalty – TOCMP

The United States Department of Agriculture (USDA) has the authority to impose civil money penalties on retailers who sell or transfer a store that has been permanently disqualified from the Supplemental Nutrition Assistance Program (SNAP). This means that if a store owner is permanently disqualified from participating in SNAP, they will be fined a civil money penalty when they sell or transfer the store.

Legal Basis for Civil Money Penalties

The Food and Nutrition Act of 2008, as amended in 7 USC Section 2021 and Section 278 of Title 7 of the Code of Federal Regulations (CFR), grants the USDA the power to impose civil money penalties. According to Section 278.6(f)(2) of the CFR, if a retail food store that has been disqualified is sold or ownership is transferred, the person or legal entity selling or transferring ownership will be subject to and liable for a civil money penalty.

Calculation and Payment of Civil Money Penalties

If you sell or transfer ownership of your store after disqualification, you will be liable for a civil money penalty as outlined in SNAP regulations Sections 278.6(f)(2), (3), and (4). The amount of the penalty will be calculated based on SNAP regulations at 278.6(g).

You have the option to pay the penalty in one lump sum or in installments. To arrange a payment plan, you can contact the Centralized Receivables Service at the USDA by calling 1-855-549-4285. Payments can be made online using credit cards, bank checking or savings accounts. Alternatively, you can mail a check to USDA – FNS, SNAP – RETAILER/WHOLESALER, P.O. Box 2411, Oshkosh, WI, 54903.

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Legal Scenario: What Would You Do?

Scenario

You recently purchased a convenience store only to discover that the previous owner had been permanently disqualified from SNAP, and now the USDA is threatening to impose a Transfer of Ownership Civil Money Penalty against you for tens of thousands of dollars. You had no idea about the store's SNAP disqualification history when you signed the purchase agreement.

Can the USDA really fine me for buying a store that was previously disqualified from SNAP, even though I had nothing to do with the violations?

Attorney's Answer

Under Section 12(b)(3) of the Food and Nutrition Act and 7 CFR § 278.6(f), the USDA can impose a Transfer of Ownership Civil Money Penalty on any person who sells or transfers ownership of a store that has been permanently disqualified from SNAP. The penalty can be substantial, often reaching up to the full value of the SNAP benefits that were trafficked. However, you may have grounds to challenge the penalty by demonstrating that you were a bona fide purchaser without knowledge of the disqualification, or by contesting the calculation of the penalty amount through an administrative review under 7 CFR § 279. An experienced attorney can file a request for review with the USDA Administrative Review Branch and, if necessary, pursue judicial review in federal district court under 7 USC § 2023.

This is general information only. Contact us for advice specific to your situation.

The penalty must be paid in full or a payment plan must be established within 15 calendar days of receiving the notification letter. If the penalty is not paid, the USDA may disclose information about the retailer to the public.

Disclosure of Retailer Information