The National Merchant Association (NMA) urges retailers to enroll in their Electronic Benefit Transfer (EBT) program to “accept those cards today!” The NMA calls EBT cards “the source for government-issued benefits.” NMA experts say social security benefits will be on the EBT cards of the future. “You should expand your customer base by enrolling in our EBT program” now says the NMA. Food stamps, Women Infants Children (WIC), and Temporary Assistance to Needy Families (TANF) are electronically loaded on the EBT card. A personal identification number (PIN) is required to complete its debit card transactions. The EBT card is run through an electronic payment system which transfers the card holder’s government benefits to a retailer. EBT technology varies from state to state. EBT simplifies accounting and reduces labor costs by electronically recording transactions. Detailed electronic transaction records reduce food stamp fraud. The NMA helps businesses thrive.
Expanded Customer Base
Your expanded customer base receives their funds from the United States Department of Agriculture, the New York Office of Temporary and Disability Assistance, and the local New York Department of Social Services. Intentional Program Violations (IPV) carry penalties, which range from disqualification and suspension of funds to criminal prosecution and fines. Fraudulent transfer of food stamp benefits is an intentional program violation and a violation of 18 N.Y.C.R.R. § 359.3(b)(1)-(2).
Recipients are equally responsible for intentional program violations. Recipients may not in the process of obtaining or using food stamps:
Recipients may not fraudulently use food stamps according to 18 N.Y.C.R.R. § 359.3(b)(1)-(2). Individuals may not fraudulently acquire, transfer, or possess food stamps.
Attendance at the IPV hearing is necessary if the intentional violations were a misuse of cash assistance. Attendance at an IPV hearing is not necessary if the recipient intentionally violated food stamp laws. Recipient or merchant, you have a right to an interpreter and an attorney.
Administrative Disqualification Hearing
An administrative disqualification hearing under 18 N.Y.C.R.R. § 359.5(e)begins with an evidence packet. State employees who will appear at the hearing are listed with their titles on the evidence packet. Penalties are never reduced. Penalties are strictly specified by statute. Your evidence packet lists:
Only a lawyer familiar with administrative procedures is capable of winning a food stamp administrative disqualification hearing. The agency must present clear and convincing proof, and all rules of service, evidence, and procedure must be followed. You need an experienced lawyer capable of representing you in both agency and criminal court proceedings. Your lawyer will strive to reduce your income through exclusions and application of expenses involved in producing your income. You may need further representation in civil court. You can be sued or compelled to make restitution.
A discrepancy between individual and household demographics or incomes may contribute to a determination of food stamp fraud. Unreported child support, unreimbursed medical expenses, and greater than legally permitted rent or daycare expenses contribute to determinations of food stamp fraud. Incarcerated felons may not continue collecting food stamps to help support their family. Excessive or repeated need for food stamps may also trigger an investigation. If you are between 18 and 50 years old, you are expected to work.
Penalties for Food Stamp Fraud
Penalties for first, second, and third violations are disqualification for 12 months, 24 months, and permanently, respectively. Criminal prosecution may follow the administrative hearing. Longer disqualifications apply to trafficking especially if food stamps were used to purchase guns or controlled substances.
Willful violations of food stamp laws are a class A misdemeanor unless the value of the fraud exceeds $1,000. Food stamp fraud over $1,000 is a class E felony. Fraud over $3,000 and $50,000 are class D and C felonies, respectively.
Social services refers violators to the district attorney’s office for prosecution. New York City sends all fraud cases greater than $3,000 for prosecution. Criminal court judges have the authority to reduce disqualification periods by statute 7 C.F.R. § 273.16(g)(2)(i). Upon referral for prosecution, the New York Department of Social Services no longer has any involvement in the case.
Individuals may be able to defer adjudication of their criminal fraud cases by signing a disqualification agreement under law 7 C.F.R. § 273.16(h); 18 N.Y.C.R.R. §359.1(e). It is not advisable to take a disqualification determination into criminal or civil court. Criminal sentences as prosecuted by the district attorney are severe compared to agency determinations with repayment options and disqualification periods.
If you are an employer whose employees committed food stamp fraud without your knowledge, you case is more complex. The charges against you are serious, and you only may be able to repay all the money you diverted illegally.
A possible defense against IPVs is a family member who has a form of mental illness. Another viable defense is that the violations occurred while caring for a delicate minor or disabled child.
Income reduction is a possible defense for fraud. It may be possible to get a sentence or penalty reduced in the prosecutor’s office. The prosecutor’s office can decline to prosecute despite a referral from the administrative hearing.
Administrative Law Attorney
If you’re a food stamp recipient who received a notice of an administrative disqualification hearing, you need the services of our food stamp administrative law attorney. If you’re a merchant who’s losing money because your food stamp payments have been suspended and you are disqualified from accepting food stamps, you need an experienced administrative law attorney.
Call our food stamp administrative law attorney for a free initial consultation. We strive for the best possible solution to our clients’ food stamp fraud problems. We represent clients in administrative hearings, and in criminal and civil state and federal courts. We’re available 24 hours per day, everyday.
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