SNAP Fraud Attorney in New York City

How SNAP Fraud Is Graded Under New York Law

Penal Law Article 158 (Welfare Fraud) tracks the dollar value of benefits alleged to have been wrongfully obtained:

• PL § 158.05, Welfare fraud in the fifth degree. Class A misdemeanor. Any amount.
• PL § 158.10, Fourth degree. Class E felony. Over $1,000.
• PL § 158.15, Third degree. Class D felony. Over $3,000.
• PL § 158.20, Second degree. Class C felony. Over $50,000.
• PL § 158.25, First degree. Class B felony. Over $1,000,000.

Prosecutors often add charges of offering a false instrument for filing (PL §§ 175.30, 175.35) and grand larceny (PL §§ 155.30, 155.35) to the same indictment. For non-citizens, welfare fraud is generally a crime involving moral turpitude with immigration consequences.

How We Build the Defense

1. 1

   Attack the Amount

   The grade of the case is the amount, so the agency's calculation is where we start. We push back on the inclusion of months that fall outside the statute of limitations, on whether the household was actually overissued for each month, and on whether the agency's own errors caused part of the overpayment. Because the Article 158 grades are set by dollar thresholds, what the calculation ends up showing bears directly on how the case is charged.

2. 2

   Attack the Intent

   Welfare fraud requires intent to defraud. Honest mistake, misunderstanding of the recertification questions, language barriers, and reliance on caseworker statements are all defenses. An overpayment can be accurate and still not be fraud.

3. 3

   Attack the Statements

   If the agency relied on statements made in an investigative interview, we challenge how the interview was conducted, whether the client was advised of the right to counsel, whether the statements were knowing and voluntary, and whether Miranda issues attach when the case is later referred to law enforcement.

4. 4

   Pre-Indictment Resolution

   Many alleged SNAP fraud cases never become indictments. A repayment agreement, a civil overpayment, and a Disqualification Consent Agreement can resolve the matter without a criminal record. Where the case is already with a District Attorney and charged as a misdemeanor in local criminal court, an adjournment in contemplation of dismissal under CPL § 170.55 or a plea to a non-criminal violation may be available. Neither is available on a felony indictment; there the routes are a reduction to a misdemeanor before or at disposition, or a motion to dismiss in the interest of justice under CPL § 210.40.

Retailer Trafficking: the Federal Side

SNAP retailer cases are a separate animal from recipient cases. The investigators are different, the statutes are different, and the consequences run on two parallel tracks: an administrative case at USDA-FNS that can shut the store down within weeks, and a criminal case at the U.S. Attorney's Office that can take years. Both have to be defended at once.

• How Retailer Cases Open

  Almost every retailer case begins inside USDA-FNS's Anti-Fraud Locator using EBT Retailer Transactions, known as ALERT. ALERT compares a store's transaction patterns against peer stores in the same category and flags anomalies. The recurring flags we see in the cover memo are:

  • High volume of even-dollar transactions ($10.00, $20.00, $50.00)
  • Repeated large totals inconsistent with inventory and shelf space
  • Multiple transactions on the same card within a short window
  • Manual entry of EBT card numbers instead of a swipe or chip read
  • Rapid back-to-back transactions across different cards
  • A few cards accounting for a large share of monthly redemptions
  • Average transaction size far above the category average

  An ALERT flag does not by itself prove trafficking. It triggers a deeper case file: undercover buys by FNS contractors, surveillance, inventory audits comparing wholesale purchase records against SNAP redemptions, and interviews of employees and customers. By the time the store owner learns about the investigation, much of this is already done.

• The Administrative Charge Letter

  The administrative case typically opens with a charge letter from the FNS Retailer Operations Division identifying transactions the agency considers trafficking under 7 C.F.R. § 278.2 and 7 C.F.R. § 278.6. The store has ten calendar days to respond. The default sanction for trafficking is permanent disqualification under 7 C.F.R. § 278.6(e)(1). The sanction runs against the ownership rather than the storefront: an owner who sells or otherwise transfers a disqualified store stays disqualified and is subject to a transfer-of-ownership civil money penalty under 7 U.S.C. § 2021(e)(1). Selling the corner store does not erase the sanction as to the seller.

• The Civil Money Penalty in Lieu of Disqualification

  A first-time retailer with no prior trafficking findings can request a civil money penalty (CMP) in lieu of permanent disqualification under 7 C.F.R. § 278.6(i). The request has to be made within ten days of the charge letter, and the store has to prove four things: an effective compliance policy and program existed before the violations, that policy was actually in effect when the violations occurred, the firm developed and instituted an effective training program, and ownership was not aware of, did not approve of, did not benefit from, and was not involved in the conduct. The proof is documentary, written policies dated before the violation window, signed employee training acknowledgments, and payroll records showing the implicated employee's status. Missing the ten-day window or missing one of the four prongs forfeits the CMP option entirely.

• Administrative Review and Federal Court Review

  If the store loses at the Retailer Operations Division, the next step is administrative review through the FNS Administrative Review Branch. After a final agency decision, judicial review is available in federal district court under 7 U.S.C. § 2023, but only by trial de novo on the trafficking finding, with a narrower review of the sanction itself. The thirty-day window to file is jurisdictional.

• Parallel Criminal Exposure

  The same conduct that supports administrative disqualification supports criminal charges under 7 U.S.C. § 2024, frequently paired with wire fraud (18 U.S.C. § 1343), mail fraud (18 U.S.C. § 1341), conspiracy (18 U.S.C. § 371), and money laundering counts when cash exchanges are routed through bank accounts. The investigating agency is USDA-OIG, often with IRS-CI on the money side. Federal sentencing runs under U.S.S.G. § 2B1.1, where loss is calculated as the full value of trafficked benefits, not the discount the store paid. The sophisticated-means enhancement at § 2B1.1(b)(10) is frequently sought where the scheme used manual card entry, structured redemptions, or other steps to avoid detection.

• Defending the Retailer Case

  • Inventory reconciliation. Wholesale invoices, distributor records, and shelf audits frequently show the store could in fact have sold the volume FNS calls suspicious.
  • Demographics and competitor data. ALERT compares stores within a category. Where the category is wrong (a small grocery coded as a convenience store, for example) the entire peer comparison is wrong.
  • Employee conduct. Where a clerk acted outside policy, the CMP analysis turns on whether ownership knew or benefited.
  • Undercover buy review. The FNS contractor reports are not always consistent with surveillance and receipts. We compare them line by line.
  • Coordinated criminal and civil defense. Statements made in the administrative case are usable in the criminal case. The reverse is also true. Sequence matters.

Federal Sentencing in Retailer Cases

If the case becomes a federal indictment, the central battleground at sentencing is the loss number under U.S.S.G. § 2B1.1. Loss in trafficking cases is computed as the full value of the SNAP benefits trafficked, not the discount the store paid out. A store that purchased $200,000 in benefits for $120,000 in cash is sentenced on $200,000, not $80,000. The loss table escalates quickly: $40,000 in loss adds six levels, $250,000 adds twelve, $550,000 adds fourteen. Sophisticated-means under § 2B1.1(b)(10), abuse-of-trust under § 3B1.3 where licensure was used to commit the offense, and role enhancements under § 3B1.1 are routine in larger retailer cases.

Loss litigation at sentencing is therefore where much of the case is decided. Inventory records, distributor invoices, and a defensible extrapolation methodology are how a store shows that ALERT-flagged transactions were legitimate purchases, and because the § 2B1.1 table advances in two-level steps, where the loss figure lands drives the guideline range. We retain forensic accountants in cases where the dollar exposure justifies it.

What Happens to the Store

An administrative permanent disqualification under 7 C.F.R. § 278.6(e)(1) ends the store's participation in SNAP. Under 7 U.S.C. § 2021(e)(1) the disqualification period continues to run against the person who sells or transfers the business, and that seller also faces a civil money penalty. A genuinely unrelated purchaser may apply for authorization in its own right, but FNS reviews transfers to relatives, employees, and related entities closely for whether the sale is a device to restore a disqualified owner's redemptions. The store can continue to operate but loses SNAP redemptions, usually the bulk of revenue in the bodegas and small groceries that are the typical targets. Where the store is part of a New York State licensed lottery or WIC vendor program, the SNAP disqualification often triggers parallel sanctions in those programs. Landlord lease terms tied to continued SNAP authorization can be an issue as well.

Recipient Cases We Also Handle

We defend recipient SNAP cases in parallel with these retailer matters, unreported income, unreported household composition, residency disputes, and EBT misuse allegations. The investigation-stage playbook is on our SNAP investigation attorney page, and the letter-stage walkthrough is on our received a SNAP investigation letter page. For the broader overview of charges and forums see SNAP fraud lawyer.

Beyond the Criminal Case

A SNAP fraud conviction creates collateral consequences that often outlast the sentence:

• Permanent ineligibility for SNAP in some circumstances
• Loss of Section 8 and other federal housing benefits
• Restrictions on Medicaid and other public benefits. See our Medicaid fraud attorney page
• Immigration consequences, including potential removal for non-citizens
• Professional licensing impact, especially for healthcare workers

If you have been charged with SNAP fraud, or believe a case may be referred to the District Attorney, call us at 212-233-1233 or email [email protected].