The penalties for food stamp fraud vary among states. The penalties also differ according to the amount of the fraud and the criminal history of the party found to have committed fraud. The penalties are higher if the fraud involves applying for benefits while using a false identity.
Understanding the Terms
The food stamp program is called Supplemental Nutrition Assistance Program, or SNAP. Many states make the funds available through an Electronic Benefit Transfer, or EBT, card. Food stamp fraud can involve many different types of actions, including purchasing nonfood items with food stamps and using food stamps to buy food previously bought on credit. Since food stamps are a type of welfare benefit, food stamp fraud is charged as welfare fraud.
Details of Food Stamp Fraud
Each instance of food stamp fraud can be charged as a separate offense. The penalties are severe when a party is engaged in a scheme with other individuals or has defrauded the state program to a great extent. When the fraud is by an individual and involves a small amount, a state will usually prosecute the offense. When the fraud is by a business and involves a conspiracy to defraud, the federal government may prosecute the offense.
State law determines which acts are misdemeanors and which are felonies. In California, making a false statement can be charged as a misdemeanor, and filing a fraudulent application can be charged as a felony. The penalty for a misdemeanor for welfare fraud is punishable by up to one year in jail and a fine up to $1,000. The penalty for a felony for welfare fraud is up to three years in jail and a fine up to $5,000.
Read More: How to Appeal a Food Stamp Denial
Repayment and Program Bans
In addition to criminal charges, a party who steals food stamps may be banned from participating in the program. In Georgia, the state bans first-time offenders for one year. There is a two-year ban for a second offense. A third violation incurs a permanent ban. The party may also be required to pay back overpayments she was not eligible to receive.
Examples of Food Stamp Fraud
Food stamp fraud can be committed by individuals, households, businesses and state workers. Markets can engage in food stamp fraud by illegally selling SNAP benefits. In December 2019, a federal grand jury indicted the owner of a market in eastern Kentucky for food stamp fraud totaling over $2 million. The owner’s wrongful acts involved numerous instances of buying food stamps for cash at a discounted rate.
Also in December 2019, an Ohio business that delivered meat was found to have engaged in a conspiracy that involved up to $8.5 million in fraudulent SNAP benefits. The business illegally processed benefits by giving credit and gift cards in exchange for access to a family’s benefits. The company completed these transactions without the recipients’ knowledge or consent.
State workers and state agencies can engage in food stamp fraud by intentionally distributing food stamps and EBT cards to recipients who are ineligible to receive them. Individuals can commit food stamp fraud by hiding income to get a larger monthly amount. An individual can also commit food stamp fraud by failing to mention the incomes of all of the people residing in a household.
Food Stamp Fraud Is Rare
A 2018 Congressional Research Report found SNAP fraud is relatively rare. In Georgia, 2016 data, the most recent data available in 2019, showed that cases of intentional fraud made up 0.2 percent of the 1.7 million recipients of food stamps that year. A party can help reduce food stamp fraud by reporting intentional program violations.
- U.S. Department of Agriculture, Food and Nutrition Service: Offenses Involving Federal Food Stamp Benefits
- Colorado Department of Human Services: Report fraud to the Colorado Department of Human Services
- South Carolina Department of Social Services: Fraud
- Florida Department of Children and Families: Report Public Assistance Fraud
- LSNC Guide to CalFresh Benefits: Fraud Claims
- U.S. Department of Agriculture, Food and Nutrition Service: How Can I Report SNAP Fraud?
- California Welfare and Institutions Code, Sections 10980- 10980: Chapter 9, Penalties
- New York State: Reporting Welfare Fraud
- Oregon Department of Human Services: Frequently Asked Questions About Reporting Fraud
- Congressional Research Service: Errors and Fraud in the Supplemental Nutrition Assistance Program (SNAP)
- Atlanta Journal-Constitution: Georgia recoups about as much money in food stamp fraud as it spends
- WKYT: Market owners charged in $2 million food stamp fraud
- U.S. Department of Agriculture, Food and Nutrition Service: What is FNS Doing to Fight SNAP Fraud?
Jessica Zimmer is a journalist and attorney based in northern California. She has practiced in a wide variety of fields, including criminal defense, property law, immigration, employment law, and family law.