What Happens if My Employee Commits Food Stamp Fraud?

As an employer, you certainly don't want any of your workers engaging in illegal activity like food stamp fraud. But what exactly happens if you discover an employee has committed fraud involving Supplemental Nutrition Assistance Program (SNAP) benefits? What are your responsibilities and liabilities as their employer? This article covers key questions around employees and food stamp fraud, including:

• What constitutes SNAP fraud?
• What penalties do employees face?
• Could the company be implicated?
• How to discourage and detect fraud
• Proper response if fraud is discovered

Understanding these issues will help you avoid problems and protect your business if an employee tries to abuse SNAP.

What Is Considered SNAP Fraud?

SNAP fraud involves intentionally breaking rules to obtain more benefits than entitled or misuse benefits. Common fraud includes:

• Lying on applications about identity, income, expenses
• Not reporting changes in household status
• Trading benefits for cash or non-food items
• Using another person's EBT card without authorization
• Purchasing restricted items like alcohol, tobacco, household supplies

Fraud also occurs when retailers allow purchases of ineligible items with SNAP benefits. Employees may engage in fraud for personal gain or be recruited by criminal rings exploiting the program.

Penalties for SNAP Fraud

Intentionally committing SNAP fraud can lead to prosecution. Potential criminal penalties include:

• Fines up to $250,000
• Jail time from 1 to 20 years
• Permanent disqualification from SNAP
• Repayment of fraudulently obtained benefits

Even unintentional errors can result in SNAP disqualification if the recipient doesn't correct them. Prosecution focuses on clear evidence of intentional deceit and misuse of benefits.

Company Implications

Employers are generally not criminally liable if an employee commits SNAP fraud. The worker would face individual prosecution. However, companies can suffer other consequences like:

• Reputational damage if fraud is publicized
• Investigation disruptions
• Lost work time managing disciplinary process
• Potential civil liability in egregious cases

It's in the company's interest to deter fraud through training and oversight. Taking swift action if fraud occurs helps minimize damage.

Discouraging SNAP Fraud

Here are some tips to discourage employees from attempting SNAP fraud:

• Train all staff on SNAP program rules and fraud risks
• Remind employees of duty to follow laws and company policies
• Encourage reporting of suspected fraud to management
• Let workers know fraud will result in termination and prosecution
• Watch for suspicious patterns like large SNAP purchases

Clear anti-fraud policies and training create a culture of compliance. Ongoing oversight also helps deter misuse of benefits.

Detecting Potential SNAP Fraud

Signs an employee may be committing SNAP fraud include:

• Drastic improvements in lifestyle without clear income source
• EBT card that belongs to someone else
• Purchasing obviously ineligible items like lobster or filet mignon
• Trading SNAP benefits for cash
• Providing different information on company forms versus SNAP application

Many retailers have sophisticated fraud monitoring that detects suspicious patterns. But managers should also watch for red flags in employee behavior.

Responding to Suspected SNAP Fraud

If you suspect an employee is committing SNAP fraud, take these steps:

• Document any evidence supporting your suspicions
• Consult legal counsel on appropriate investigation methods
• Interview the employee to get their side of the story
• If fraud confirmed, immediately terminate employment
• Report details to SNAP fraud hotline

Moving quickly sends a message that fraud will not be tolerated. Strictly follow employment laws regarding fair treatment and termination processes.

After Fraud is Confirmed

Once SNAP fraud by an employee is established, you must:

• Cooperate fully with investigators
• Preserve any evidence that could aid prosecution
• Consider if internal controls need strengthening
• Be prepared to show how you addressed the situation

Transparency and compliance with the investigation protects the company from appearing complicit. Review policies to prevent future fraud incidents.

Maintaining Program Integrity

SNAP provides essential support that enables many low-income families to afford groceries. While rare, any fraud undermines the program's integrity. That's why deterring misuse through training and oversight is so important. No employer wants to deal with the hassle and risks of employee fraud. Make sure your workers understand you maintain zero tolerance for illegal actions like SNAP benefit abuse. With proper precautions, you can avoid significant problems down the road.  

References

SNAP Fraud Prevention - USDA Food and Nutrition Service Oakland Man Sentenced To Five Years In Prison For $15 Million Food Stamp Fraud | USAO-NDCA | Department of Justice Legal Responsibility for an Employer for Employee Committing Fraud | Small Business - Chron.com SNAP Fraud and Abuse - Eat Smart, Move More South Carolina