Last Updated on: 27th July 2023, 06:30 pm

Understanding Civil Money Penalties: How to Protect Your Business and Stay Compliant with SNAP

As a nationwide law firm, Spodek Law Group and Attorney Todd Spodek understand the importance of complying with government assistance programs, such as the Supplemental Nutrition Assistance Program (SNAP), which helps low-income individuals and families purchase nutritious food. Any retailer found in violation of SNAP regulations can face serious consequences, including suspension or disqualification from the program. Fortunately, there is an alternative – a civil money penalty. In this article, we will explore what a civil money penalty is, how it is calculated, and how you can protect your business from facing suspension or disqualification from SNAP.

What is SNAP?

SNAP, or the Supplemental Nutrition Assistance Program, is a government assistance program that helps individuals and families with low income purchase healthy food. This program, also known as food stamps, provides monthly supplemental assistance to purchase nutritious foods, but it does not cover non-food items such as toothpaste or shampoo. Initially developed in the 1960s to help those still struggling after the Great Depression, the program has evolved over time to include electronic debit cards instead of paper stamps, which allows the governing body, the USDA, to better trace transactions and prevent fraud.

What is Considered Food Stamp Fraud?

Food stamp fraud occurs when a user or retailer misuses the program. The most common types of fraud include trafficking, where SNAP benefits are exchanged for cash, false application where an individual lies on their application to receive more benefits than they are entitled to, and retailer lying on a SNAP application, which is not allowed if they have been disqualified from the program for abusing it in the past.

What are Civil Money Penalties?

A civil money penalty, also known as CMP, is a punitive fine imposed on an entity that has profited from an unethical activity, and it can be given to both businesses and individuals who violate SNAP regulations. Receiving a charge letter or a SNAP violation letter means you have 10 days to apply for the issuance of a CMP. If you fail to apply for the penalty, you will be automatically suspended from the assistance program. By paying the CMP, you can remain part of the assistance program. These fines are all instituted by the USDA and may not exceed $59,000. The penalty that a particular retailer faces will be calculated by the USDA by reviewing the retailer’s EBT transaction data.

Who Qualifies for a Civil Money Penalty?

While paying a penalty may not be ideal, it can save you from disqualification or suspension from SNAP. To be eligible for a CMP, a retailer must meet the criteria outlined in Section 278.6(i) of the SNAP Regulations, and all of this must be supported by physical or electronic documentation. The criteria include having a compliance policy in place, a written training program for employees, logs of policies and their updates, and ensuring that managers and owners did not benefit directly from the alleged SNAP violations that occurred.

How is the Civil Money Penalty Calculated?

The CMP is calculated following specific guidelines in the SNAP regulations, and it varies from retailer to retailer, as business-specific information is included in calculating the penalty. Generally, you can expect to pay at least the amount of money that you gained during the unethical practices that were performed at your business.

Protect Your Business and Stay Compliant with SNAP

If you receive a charge letter, it’s essential to act quickly and apply for the issuance of a CMP within ten days. Failure to do so will result in suspension or disqualification from the program. To protect your business, ensure you have a compliance policy in place that is updated regularly, logs of policies and their updates, a written training program for employees, and ensure that managers and owners did not benefit directly from the alleged SNAP violations that occurred.

At Spodek Law Group, we understand the complexities of government assistance programs like SNAP, and we have extensive experience helping businesses navigate the legal issues that come with participation in these programs. Our team of experienced attorneys can help you understand your legal obligations and help you avoid costly penalties.

When you work with us, we’ll provide you with personalized legal advice and support that is tailored to the specific needs of your business. We’ll help you develop compliance policies and training programs, and we’ll work with you to ensure that your business stays compliant with SNAP regulations.

In conclusion, understanding civil money penalties and how they are calculated is essential for any retailer that participates in the SNAP program. By complying with SNAP regulations and having a strong compliance policy in place, you can protect your business from facing suspension or disqualification from the program. At Spodek Law Group, we have the knowledge and experience to help you navigate the legal complexities of SNAP and protect your business from costly penalties. Contact us today to learn more about how we can help you stay compliant with SNAP regulations.