Food Stamp Fraud Trafficking – Extending “CREDIT” to Customers

Food Stamp Fraud Trafficking – Extending “CREDIT” to Customers

In a metropolitan area the size of New York City, millions of people make their homes in the region. Those in need of financial assistance might seek to enroll in the food stamp program out of sheer necessity. Retailers often rely on the consistent stream of purchasing from food stamp recipients in order to stay in business. Payments through an EBT card are, for all intents and purposes, as good as cash.

Retailers do need to realize that food stamps and EBT payments are not cash. Food stamps — Supplemental Nutrition Assistance Program (SNAP) program benefits — are assistance dollars funneled to needy people through the government. The government program, all government programs, are created through detailed legislation. Additional regulations might be crafted to further ensure the management of the specific program. Violations of the rules and regulations of the program can lead to problems with the law. One sure way for a retailer to get in serious legal trouble is through extending credit with EBT payments.

Extending credit comes under the heading of SNAP trafficking, which is another name for SNAP fraud. Trafficking usually entails buying, selling, or otherwise bartering with SNAP benefits.

SNAP/food stamp fraud can be charged as a very serious crime. Those who engage in such fraud could face very significant legal consequences as the result of their own actions. Retailers might not think violating the rules of the program is a big deal. State and local officials think otherwise, which is why any type of food stamp trafficking may bring forth severe legal consequences.

Assuming that extending credit is not a major violation brings forth the old argument about the ignorance of the law. Not realizing the law has been violated means nothing when faced with charges. The charges can lead to personal financial ruin or even time in prison. Persons who violate SNAP laws and end up charged with food stamp fraud could suffer grave consequences from their actions. Anyone who is charged with fraud or trafficking positively must retain the services of a criminal defense lawyer who handles such cases.

Extending Credit and Trafficking Violations

The simple process of extending credit brings forth no problems when food stamps and EBT payments do not factor into the equation. If a shopper has limited funds, a retailer could accept an IOU for payment at a later date. The customer could take home $200 in groceries with the agreement to pay, in cash or with a credit card, the $200 once his/her paycheck arrives. This would be a simple customer-seller agreement that violates no rules.

Selling on credit, however, is barred under food stamp regulations for a number of reasons. Selling on credit with the express agreement to pay the debt with an EBT transaction, in fact, is a violation of the law.

Per the United States Government Accountability Office, extending credit for SNAP benefits EBT purchases violates the rules of the program and can lead to a retailer being disqualified from the program. Although the ability to appeal the violation is possible, overturning the decision on appeal might prove incredibly difficult if the retailer clearly has violated the rules.

Ultimately, the rules state food stamp items must be both eligible items under the program and purchased in real time. Retailers who extend credit are violating the terms of the latter. Also, by extending credit, the government finds it difficult to determine compliance with the former. This creates further problems that become resolved through disqualifying the retailer from the program.

Far more serious violations take place when the retailer charges interest when extending credit with interest or an added processing fee.

In order to violate the law by accepting interest or processing fees, fraud becomes necessary. If $10 in food is purchased on credit and the retailer adds a $2 fee, the retailer must claim the added $2 is a purchase for food when it is not. The $2 is, in essence, an interest payment. Improper billing associated with food stamps benefits could be the charged under the statute related to “unauthorized use of food stamp benefits.”

Penalties for Food Stamp Fraud

The penalties for retail food stamp fraud on the civil and federal level depend upon the particulars of the case and the type of fraud involved. In terms of administrative actions, a retailer could face disqualification for up to five years for a first offense, 10 years for a second offense, and a permanent ban for the third offense. With each offense comes a possible assessment of a $100,000 civil penalty for each violation.

The administrative penalties might not be anywhere near the worst problems a retailer may face. Criminal charges leading to jail time and asset forfeiture are possible. Depending on the circumstances, food stamp/welfare fraud charges could be on the state or federal level.

Retaining Strong Defense Counsel

Anyone investigated or charged with food stamp trafficking or other forms of food stamp fraud would find it best to hire an attorney who understands the proper way to defend against such charges.

The attorney could mount a strong defense against those who are falsely charged or might work a plea bargain agreement for someone who has never been in serious trouble with the law before. Ultimately, the particulars of each individual case determine how a defense attorney may proceed. In all situations, hiring experienced counsel would be in the best interests of the accused.

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