How Do I Avoid Jail Time for SNAP Benefit Trafficking?

SNAP benefits are an important source of revenue for many retail businesses, including gas stations, convenience stores and specialty grocery stores. These federal food stamp benefits are a type of public assistance administered through the U.S. Department of Agriculture’s Food and Nutrition Service. The Supplemental Nutrition Assistance Program provides benefits for low-income households to buy certain eligible food items. SNAP recipients receive an EBT (electronic benefits transfer) card, which they may use to make eligible purchases. Businesses that are authorized to accept SNAP benefits must comply with detailed rules and regulations. One of the most common violations – food stamp trafficking – occurs when:

• A retailer exchanges cash for a recipient's SNAP benefits
• A retailer allows a recipient to purchase ineligible items, like alcohol or cigarettes, with SNAP benefits
• A retailer purchases SNAP benefits from recipients at a discounted rate to obtain reimbursement from the government

Often, store owners aren’t aware of this activity, but they can nonetheless be held accountable. The consequences for such violations can affect the entire business. There are three main penalties for SNAP violations enforced by the USDA:

1. Civil money penalties (fines)
2. Disqualification from the SNAP program
3. Criminal prosecution

The applicable penalty depends on the type of violation and the number of previous violations. The first intentional program violation (IPV) typically results in a 12- or 24-month suspension from the program, meaning retailers are unable to accept SNAP benefits during that period of time. However, if the violation involved accepting a transfer of public benefits in exchange for alcohol or weapons, the disqualification will likely be permanent. Criminal charges are also a possibility in cases involving intentional violations on a large scale. A conviction can lead to a sentence of up to 20 years in prison and steep criminal fines. In addition, in cases where program benefits are used to purchase controlled substances, serious drug trafficking charges may be tacked on. Read on for more information about the three most common types of penalties.

Civil Money Penalties

A civil fine is known as a “civil money penalty” under the Code of Federal Regulations, which authorizes the U.S. Department of Agriculture to enforce the law against food stamp trafficking. The actual amount of the civil fine depends on how much business your store does in EBT transactions as well as the number and type of SNAP violations alleged against you by the USDA. Important: If there is any good news here, it’s that the USDA’s authority to issue a civil fine – instead of disqualification – means you could preserve your future EBT revenue. This outcome depends on whether or not your business had the proper compliance program in effect. By taking proactive steps to properly train your employees and put a compliance program into place, you can help prevent violations in the first place and protect your business should a violation occur.

Disqualification

In general, the most damaging civil penalty for SNAP violations is permanent disqualification. Many retailers depend on EBT customers as a significant source of revenue. The inability to accept EBT transactions can put you at a significant disadvantage compared to your competitors. Some retailers even go out of business following permanent disqualification. Under the Code of Federal Regulations (7 C.F.R. § 278.6), the Food and Nutrition Service of the U.S. Department of Agriculture has the authority to disqualify any retailer from participation in EBT transactions, based on the retailer’s failure to comply with the Food Stamp Act of 1977. The following are examples of activities that could lead to permanent disqualification – even if you didn’t know about it:

• Trafficking SNAP benefits (exchanging SNAP benefits for cash)
• Selling firearms, ammunition, explosives, or controlled substances in exchange for SNAP benefits
• Selling alcohol or tobacco products in exchange for SNAP benefits
• Accepting SNAP benefits as payment for previously acquired merchandise
• Accepting SNAP benefits as payment for non-food items like household supplies

Temporary disqualification can also be extremely damaging to your business, depending on your cash position and the length of the disqualification. Under the Code of Federal Regulations, temporary disqualification can last anywhere from six months to five years. The length of time will depend on the type of violation, the weight of the USDA’s evidence against you and the number of prior SNAP violations.

Criminal Charges

USDA’s authority to issue a civil fine – instead of disqualification – means you could preserve your future EBT revenue. This outcome depends on whether or not your business had the proper compliance program in effect. By taking proactive steps to properly train your employees and put a compliance program into place, you can help prevent violations in the first place and protect your business should a violation occur.

What to Do If You Receive a Charge Letter

If you’ve received a charge letter from the USDA, or are under investigation for possible SNAP violations, or have recently been contacted by law enforcement in regard to your EBT transactions, contact a skilled defense attorney immediately. Because SNAP violations involve federal law, an experienced federal criminal defense lawyer can help you no matter where you are in the United States. A knowledgeable attorney understands the maze of regulations that govern public benefits under the SNAP program. They will fight for the best possible outcome in your situation. An attorney can also help put proactive compliance measures into place to protect your business down the road. Don't wait - call a federal criminal defense lawyer today if you are facing SNAP trafficking charges.

References

Penalties for SNAP and EBT Trafficking - Roberts Marcilliat & Mills PLLC SNAP Fraud Prevention - USDA Food and Nutrition Service Food Stamp Fraud | 7 U.S. Code § 2024 - Federal Criminal Defense Attorney No More Double Punishments: Lifting the Ban on SNAP and TANF for People with Prior Felony Drug Convictions | CLASP Errors and Fraud in the Supplemental Nutrition Assistance Program (SNAP) - FAS Project on Government Secrecy Lawyers For SNAP Dismissal of Trafficking Charges - Spodek Law Group