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Violations Involving SNAP and EBT Card

May 14, 2020 Uncategorized

Violations Involving SNAP and EBT Card

The agency that oversees the USDA Supplemental Nutrition Assistance Program (SNAP) is the Food & Nutrition Service (FNS).  The FNS handles all matters regarding retailer licensing and SNAP violation enforcement.  At times, EBT Violation charges come in against Indian grocery store proprietors by the FNS in a letter.  They send all their violation and decision letters by UPS overnight mail.  In the event that you receive such a letter at your store, you have a mere ten (10) days from the date of delivery to respond to the letter.  If you fail to respond, this could result in a permanent disqualification for your business and the loss of an important income stream.

All food stamp fraud letters that are sent out by FNS will detail allegations of various categories of SNAP violations.  These include:

  1. Trafficking in SNAP benefits; 
  2. Selling  forbidden products; 
  3. Using EBT benefits to pay credit; and 
  4. Reciprocal disqualifications from WIC.  

A charge letter from the FNS usually contains language saying that FNS “has compiled evidence that your firm has violated the Supplemental Nutrition Assistance Program (SNAP) regulations.”  You can see more about the SNAP violation regulations here.

Fact: 90% of Unrepresented Stores get Disqualified.

Trafficking in Benefits: a Major SNAP Violation

Topping the list of worst  SNAP violations that can come in a SNAP charge letter is benefits trafficking.  A blanket definition of trafficking is an exchange of cash for EBT benefits. This could be executed in various modes, including the sale or purchase of an EBT card or disbursing cash back on a SNAP purchase. Relatively recently, fraud investigations for trafficking started to cast a spotlight on retailer purchases of inventory that was purchased first using benefits.  This falls under the category of trafficking and routinely gets retailers permanently disqualified.

Trafficking charges can be brought in the discovery of two different versions of documented proof: 

  1. Transaction pattern/categories or
  2. Affidavits of eye witnesses.  

Frequently, SNAP violation charges are based upon a statistical analysis.  Generally, the language in USDA letters is as follows:

  “Analysis of the records reveal Electronic Benefit Transfer (EBT) transactions that establish clear and repetitive patterns of unusual, irregular, and inexplicable activity for your type of firm.”  The letter arrives with a set of attachments listing all the transactions in each category.  The categories include:

Multiple Transactions in a Short Time

“In a series of Supplemental Nutrition Assistance Program EBT transactions, multiple purchase transactions were made within a set time period.”  In this category is any grouping of transactions occurring from multiple households over a limited amount of time that can raise suspicion.  In short, the USDA may believe that this is a red flag that a SNAP violation has occurred as there is no good reason for why your store conducts transactions so rapidly.

Multiple Transactions from the Same Household

“In a series of Supplemental Nutrition Assistance Program (SNAP) EBT transactions, multiple transactions were made from the accounts of individual SNAP households within a set time period.”  For the USDA, seeing this leads them to the conclusion that a SNAP violation took place due to the frequency of purchases from the same household.  Mostly, the USDA is of the belief that it is abnormal for a head of household to repeatedly shop in a small grocery store in a short space of time.

Repeated Dollar Values

What used to be known as “same-cent transactions”, transactions in this category have been recently revised.  “In a series of Supplemental Nutrition Assistance Program (SNAP) EBT transactions, there were a large number of transactions in repeated dollar values.”  When they evaluate the amounts of your transactions, the USDA can come to perceive that you or someone working at your store has committed a SNAP violation.  The fact is that such transaction patterns often end up simply being an indication of how your store operates its business, but the USDA would never know this first hand.

Large Transactions

“In a series of Supplemental Nutrition Assistance Program (SNAP) EBT transactions, your store conducted EBT transactions that are large based on the observed store characteristics and recorded food stock.”  This category, previously classed as “excessively large transactions,” comprises a list of transactions that get flagged because they are uncharacteristically  high dollar amounts.  Absurdly, this group can include purchases that were flagged for as low as $30 or less.

Depletion of Household Benefits

“In a series of Supplemental Nutrition Assistance Program (SNAP) EBT transactions, the bulk of SNAP households’ remaining benefits were depleted within short time frames.”  This set of transactions looks into what percentage of a cardholder’s total benefit funds they spend at your place of business, and when an EBT card balance is zeroed out in their transactions at your store, this raises a flag.

Manual Transactions

In this category, which is at present rather infrequent in SNAP violation cases, lies a selection of transactions that took  place where an EBT card number was manually entered rather than swiped.  This allows the USDA to conclude that if the number was manually entered, then it is possible, if not likely, that the EBT card was not physically present at the time of purchase and that the transaction could potentially have been a SNAP violation.


Handling th SNAP Violation Letter

Snap Violation cases are very weighty.  Although the letter you receive may appear to be benign, the USDA’s end game is disqualification of your business.  You could get slapped with a term disqualification, or under some circumstances, a permanent disqualification.  Contacting the program specialist is an option, but before you do so, please refer to our Guide on What Not to Say to the USDA and read it thoroughly.  You can learn from them what information they need, but they will likely in turn ask that you “submit any information that you think might help explain those transaction patterns.”  Do bear in mind that the specialist will neglect to tell you that there is a very specific set of documents and responses that they require from you, and if you don’t hand those in, then you will lose your case.

Our lawyers boast many years of SNAP violation defense cases.  This wealth of experience gives us an edge over other firms.  We have done dozens of depositions of USDA officials, section chiefs, program specialists and investigators. Because of this, we can tailor your cases to meet the questions the Department has about your business.  We can sift through all the information to assist you in deciding what is helpful, what may be detrimental, and how to present the strongest possible case for your licence.  Our SNAP violation defense process is the best in the business. We are very pleased to be considered as an exemplar in matters ranging from administrative actions to cases before the United States Supreme Court.

Hurry!  The longer you delay in getting a professional involved, the more of an uphill climb it is to prevail in your case.  You can get a free consultation any day of the week (including weekends).  To begin the process, fill out the form below or give us a call on our toll free number.



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