April 22, 2018

USDA Cracks Down On Food Stamp Fraud

The U.S. Department of Agriculture (USDA) is cracking down on individuals and businesses who commit food stamp fraud. The move is part of the Obama Administration’s effort to cut waste and fight fraud and abuse of federal programs, the agency said.

usdaartThe Supplemental Nutrition Assistance Program (SNAP) is the largest of USDA’s 15 nutrition assistance programs. In 2012, 22 million households were participants. Nearly half of all those receiving benefits are children

The new rule expands the legal definition of “trafficking” as it applies to benefits from the Supplemental Nutrition Assistance Program (SNAP). The term now includes the direct exchange of SNAP benefits for cash and other indirect methods of obtaining cash for SNAP benefits.  This would include the resale of items purchased with SNAP benefits and other schemes such as “water dumping,” which is buying beverages in containers with returnable deposits, dumping the contents and returning the containers to obtain cash refund deposits.

“Where there is a will to commit malfeasance, bad actors will try to find a way, and we must do everything we can to stay ahead of the curve,” said Agriculture Under Secretary Kevin Concannon. “[This] announcement reaffirms USDA’s ongoing commitment to cracking down on abuse and protecting taxpayers’ investment in this critical nutrition lifeline.”

The USDA is also seeking comment on a proposal that would authorize the agency to immediately suspend payments to retailers suspected trafficking violations. Under current rules, if a retailer is suspected of trafficking, the USDA must first conduct an investigation before it can suspend payments.

Nationwide, more than 238,000 retailers that are authorized to accept SNAP benefits. While most conduct their business without incident, there are some who try to game the system. Last year 1, 387 stores were permanently disqualified from the program.

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