Penalties For Food Stamp Fraud

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Food stamp fraud is a broad term that describes a number of different crimes related to abuse of the food stamp system. Food stamps refer to benefits under the Supplemental Nutrition Assistance Program(SNAP), which is a cooperative program between the federal government and the states to help poor people stave off hunger. This is a means-tested program, which means that people can only receive benefits if their income level falls below a certain threshold. With this in mind, the penalties assessed for food stamp fraud will typically depend on how the fraud has taken place and who the offender happens to be.

Fraud by retailers
The federal government has the ability to go after people who abuse food stamps. While the feds can pursue individuals for defrauding the United States, they will typically only pursue retailers that engage in fraud. Some grocery and convenience stores have been caught paying customers pennies on the dollar for their benefits, giving those people cash in exchange for their SNAP-issued debit cards. Given that federal law makes it a crime to exchange food stamps for cash benefits, those businesses caught engaging in this can find themselves in hot water.

Typically, a business charged by the feds for this kind of fraud can see its executives face serious criminal consequences. The business itself can face millions of dollars in fines and restitution, depending on the scale of the fraud. Executives involved can receive prison sentences of anywhere from a couple of years to five or six years in many cases. Given the broad discretion in federal sentencing, it is difficult to nail down a specific range in this regard.

Fraud by individuals
Individual food stamp recipients are often accused of fraud for various prohibited activities. One of the most common is selling or trading their benefits for drugs, money or other items. When this happens, it is usually pursued at the state level, where it is a crime because the state provides a part of the funding for the benefits. Whether a person will be charged with a crime depends on the amount of the fraud.

Generally speaking, food stamp fraud involving more than $100 in benefits is considered a felony. This means that a person undertaking the fraud may end up with prison time as a result. Misdemeanor charges follow for fraud under $100. This will not usually lead to jail time, but it can lead to fines and other negative consequences.

Likewise, there are some times when food stamp fraud will actually not lead to any sort of criminal sanction. Rather, it will lead to an administrative penalty in which a person is forced to give up his or her benefits for a certain period of time. First offenses, including lying on an application about one’s income, can lead to a one-year revocation of benefits. The suspensions get longer for the subsequent offenses. Conduct must typically be quite egregious to generate a criminal penalty for an individual found defrauding this system.