SNAP Trafficking Lawyers

The Montgomery Alabama SNAP Retailer

On January 19th, 2023, a successful brand-name convenience store and gas station in Montgomery, Alabama, received a letter from the United States Department of Agriculture (USDA).  The store was the anchor retailer for a small strip plaza, but more importantly, was the only store of significant size for miles.  That's not to say that there weren't other retailers nearby, but none were as well stocked as this store was.  So, the Supplemental Nutrition Assistance Program (SNAP) households that lived nearby would come to the store to make purchases.

That's why it was surprising for the store's owner to receive this letter from the USDA.  In it, the agency stated that an "analysis of the records, including a review of your store's characteristics, food stock, and store pricing gathered from visit(s) to the store, reveal Electronic Benefit Transfer (EBT) transactions that establish clear and repetitive patters of unusual, irregular, and inexplicable activity for your type of firm."

"Based on this information, we are charging your firm with trafficking."

Trafficking in SNAP Benefits

Trafficking?  The owner wondered what the store had done that warranted such a claim.  Certainly, none of his employees had violated the regulations.  The Charge Letter didn't have any attachments that indicated someone had witnessed trafficking, or had specifically committed a SNAP violation.  What in the world made the USDA think he was trafficking?

The Department had based its allegations on three ALERT Scan categories - groups of transactions that the Agency believes indicate the presence of trafficking.  This type of case, called an EBT Analysis, does not involve eye witnesses or an actual investigation.  Instead, all the USDA had done was look at his transactions and decide they didn't like them.

The ALERT Scans

The USDA uses a computer program called the Anti-fraud Locator using Electronic Retailer Transactions (or ALERT) system to evaluate every small retailer's EBT and SNAP transactions.  Any transactions at your store which meet certain scan criteria, turn into an ALERT flag.  There are a number of different "ALERT Scans" that the USDA looks for.  This retailer in Montgomery, Alabama was cited for three different ALERT Scan categories:

Scan A1: Same Cent Transactions

These transactions all end in the same number of cents.  In this particular case, 305 of the retailer's transactions greater than $20 ended in ".98" - causing the USDA to believe that the transactions were made up.

Scan B2: Close in Time Transactions

The USDA cited the retailer for having too many transactions that occurred within specific times from the same household.  The closest in time transactions were separated by thirty seconds, for an aggregate amount of nearly $120.  Though many of these transaction sets totaled only $78 combined, or were conducted on different days, the USDA believed it was suspicious that these customers shopped so often.

Scan F: Large Transactions

The government cited 600 transactions (ranging from $36 to $250) as being larger than what the store's observed inventory stock would support.  More than 500 of the transactions were less than $60.

SNAP Violation Letters

Since 2012, the lawyers of Metropolitan Law Group have handled thousands of food stamp and SNAP violation problems for grocery stores across the country.  When this retailer contacted our firm, we immediately noticed the differences in this case from the rest: the ALERT scan data was not particularly strong.  While the Agency cited a large number of transactions, the majority of the transactions didn't appear inconsistent with the neighborhood.

As required by the SNAP Rules, a retailer is not allowed to treat a SNAP household any differently than any other customer.  That means a retailer is not allowed to restrict how a participant uses their EBT card, or what food items they buy.  According to the program rules, as long as a customer has the EBT card with them, and enters a valid PIN into the terminal, the retailer must allow the transaction to occur.

So, faulting a retailer for the frequency that a customer shops, or the amount they purchase, is inconsistent with the rules.  Many stores can have unusual transactions if you track them over a long period of time.  So, ten transactions over $100 during the six-month Review Period used by the Agency, doesn't mean the retailer is trafficking.  Likewise, repeat customers and store habits of rounding transactions to a particular end cent, are not SNAP violations.

We knew we had a strong case to make to the USDA that our client didn't violate the rules, and shouldn't be issued a permanent disqualification.

Montgomery SNAP Violation Attorney

Some attorneys like to scare retailers that these "food stamps program violations" can end in criminal charges.  Though they're not technically wrong (it is possible for the USDA to bring criminal charges in some cases), it is extremely rare that the Agency will do so.  In the more than ten years Metropolitan Law Group has worked in the area, there has been only one criminal case based on an EBT Analysis.

Instead, our primary focus in this case wasn't just to prevent unlikely criminal charges, but instead to save the store.  The majority of this retailer's business came from SNAP households.  If he was permanently disqualified, it was likely he'd lose the entire store.  If the store was lost, then he and his family would lose their source of income and their biggest asset.

How We Won the Case

You can't win an EBT Analysis case by just sending a letter telling the Agency that you didn't traffick.  In fact, you wont even win if you send a letter, a signed petition from your customers, a letter from your local elected official and your profit & loss statements.

Winning a SNAP permanent disqualification case requires a retailer to know what the USDA isn't saying, and then answer the unasked questions.  As absurd as it seems, providing a complete explanation for every aspect of your business is necessary to eliminate any confusion.  Our fifty page brief in this case did just that: we told them everything about the store, its customers, its competition, its business practices, its inventory, its logistics - everything.  Our goal was to answer the unasked questions, and then answer the questions the USDA didn't even know they had at the beginning of the case.

In addition to hundreds of pages of exhibits, the USDA reviewed our brief and determined that the transactions identified by their computer program were legitimate purchases - not trafficking.  Our client's case was dismissed.

SNAP Violation Free Consultation

SNAP violation cases are difficult.  The success rate for unrepresented retailers is extremely low.  Cases where attorneys without experience represent retailers are only slightly better than when retailers try to defend themselves.  Accordingly, we recommend that you trust your store to our team of experts and professionals in the field of SNAP law.

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