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An Overview of Food Stamp Fraud

April 20, 2011, by The McKellar Law Firm, PLLC

Food Stamp Fraud, which is now known as fraud related to the Supplemental Nutrition Assistance Program (SNAP), is an economic crime that is increasing rapidly in regards to the number of federal prosecutions. SNAP is administered by the U.S. Department of Agriculture and often violations of SNAP regulations result in civil penalties, such as monetary fines and/or suspension from the SNAP program.

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Criminal prosecutions can occur though, as illustrated by these two recent cases:

1. Earlier this month, an Oregon grocery store owner was indicted for with fraud under the Supplemental Nutrition Assistance Program. Prosecutors allege that the defendant was purchasing Electronic Benefit Transfer (EBT) cards from participants in the food stamp program, and paying them approximately half the value of the cards in cash. Both federal and Oregon state law prohibit exchanging or redeeming food stamp benefits for cash.

2. Last month, 13 people were indicted in Kansas for various charges, including conspiracy to defraud the government, wire fraud, and food stamp fraud. Prosecutors claim that defendants at two grocery stores were responsible for 2,600 fraudulent transactions, which resulted in almost $600,000 in stolen benefits.

Food stamp fraud is primarily addressed at 7 U.S.C. § 2024 and is covered in the United States Sentencing Guidelines under the Theft and Fraud crimes of USSG § 2B1.1. Per the statute, if the amount of loss is greater than $5,000, the crime is a felony, punishable by up to 20 years.