Alleged Violation of Supplemental Nutrition Assistance Program (SNAP)? Seeking a Civil Monetary Penalty in Lieu of Permanent Disqualification

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Accepting SNAP benefits allows a retailer to provide staple foods to members of the community who would be otherwise unable to afford basics.  Being licensed to accept SNAP benefits also comes with the responsibility of ensuring that all SNAP regulations are followed.  This includes ensuring that employees do not allow customers to use SNAP benefits for unauthorized items, such as ready to eat food items that can be consumed on the premises, household goods, and alcohol.  The other violation that retailers must avoid is trafficking, which is the exchange of money for food stamps.

The Food Nutrition Service (“FNS”) often sends undercover investigators to check for violations at stores that accept SNAP benefits.  If a violation is found, a charge letter is sent to the retailer, which will provide the retailer with the alleged violations, the sanction being imposed, and a procedure to respond to the charges.

More often than not, the sanction is a disqualification of the retailer from accepting SNAP benefits.  For charges of trafficking, the disqualification is permanent.  However, the charge letter provides information to the retailer about how they can qualify for a civil money penalty (“CMP”) instead of being permanently disqualified.

In order to qualify for a CMP, the retailer must show evidence of proper training of the employees of the business in SNAP benefit regulations.  7 CFR § 278.6(i) provides that the following criterion must be met:

  • Criterion 1.The firm shall have developed an effective compliance policy as specified in § 278.6(i)(1); and
  • Criterion 2.The firm shall establish that both its compliance policy and program were in operation at the location where the violation(s) occurred prior to the occurrence of violations cited in the charge letter sent to the firm; and
  • Criterion 3.The firm had developed and instituted an effective personnel training program as specified in § 278.6(i)(2); and
  • Criterion 4.Firm ownership was not aware of, did not approve, did not benefit from, or was not in any way involved in the conduct or approval of trafficking violations; or it is only the first occasion in which a member of firm management was aware of, approved, benefited from, or was involved in the conduct of any trafficking violations by the firm.

(emphasis added)

It is important that enough evidence be provided to qualify for a CMP rather than a disqualification because choosing a CMP as a sanction over disqualification is upon the discretion of FNS.  The decision is made based on evidence provided by retailer of the above factors.  The more evidence that can be provided that retailers are effectively training employees and an effective compliance policy, the more likely the FNS is to issue a CMP rather than a disqualification.  Rincker Law, PLLC is prepared to help retailers respond to a charge letter from FNS and build a case for a CMP in lieu of permanent disqualification.

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