Client Beats Rap from SNAP
â€” Early this week we received notification from the U.S. Department of Agriculture, Supplemental Nutrition Assistance Program
("SNAP") that a previously issued determination permanently disqualifying one of our clients from participation was being rescinded. In its place, new correspondence was issued indicating that their investigation was closed and that our client was immediately reinstated to the program.
"Not even a fine," explained Steven L. Simas
, owner of Simas & Associates, Ltd. "Such a turnaround is unprecedented in our many years of experience working with SNAP and WIC (i.e. this is the California equivalent, run by the Department of Public Health, Food and Nutrtion Services, Women, Infants and Children
["WIC"]) program is a fantastic result for our clients."
SNAP is the largest supplemental food program in the nation. It offers food and nourishment assistance to millions of eligible, low-income individuals and families. They are provided coupons or vouchers that can be redeemed at eligible vendors. Eligible vendors are typically found in economically-challenged communities, as was the client in our matter.
"The SNAP national payment error rate is at approximately 4%," explained Simas. "However, SNAP did not just magically achieve such a result. Rather, it takes an extremely aggressive stance on fraud, waste, and just mistakes. It is swift in taking in action. And no amount of abuse is too small. We have seen it suspend vendors in the past over two overcharges of a combined $9."
In this particular case, the client had a very unique business that served the entire state of California from a single location. The client acquired foods and ingredients that were particularly focused on their ancestral homeland, which is a small, but vibrant minority community in the state.
"In the initial Charge Letter," Lindsay Yoshitomi
, Associate Attorney at the Sacramento Office
, "our client was suspected of trafficking for 'repetitive patterns of unusual, irregular, and inexplicable' EBT transactions that occurred in a 6 month period in 2015. This included excessively large purchase transactions from recipient accounts, multiple transactions from individual benefit accounts in unusually short time frames, a majority or all of the individual recipient benefits being exhausted in unusually short time frames, and an excessive number of manual key entered EBT transactions.â€
However, Simas & Associates, Ltd. was able to prove that there was nothing particularly unusual about any of these activities. In fact, our client had sold and its customers had made purchases in the same pattern for over two years prior.
"Many of the items sold at our client's mart came from overseas, were rare, were considered delicacies, and thus, were expensive," explained Yoshitomi. "In addition, those purchasing using SNAP vouchers came from large households of 10-15 people from very long distances throughout the state. As such, they would buy a large amount of food to help feed the household for up to a month."
So, to disprove the allegations, Simas & Associates, Ltd. hired a private investigator to conduct its own investigation.
"The investigator reviewed the mart, interviewing employees, SNAP-using customers, and regular, cash-paying customers," explained Simas. "The investigator determined that the mart did not use a sophisticated point-of-sale system, employees echoed the position of the client, and customers - both cash and SNAP using - engaged in the behaviors as described by our client. For example, When asked about the quantities of products purchased, one customer told the private investigator that they buy 40 pounds of taro, 40 pounds of beef brisket, 22 pounds of lamb flap, 22 pounds of turkey tail, and a case of corned beef (there are 24 in a case) per visit. A cash paying customer similarly spent over $1,000 per month on â€œ2 cases of corned beef, 5 cases of chicken, 2 lamb flaps, and 4 bags of taro.â€
And the wholesale purchases by the mart reflected the overall cost of the underlying inventory. On an average month, it was in excess of $40,000.
Ultimately, an explanatory omnibus detailing the client, including the work of the investigator, months of receipts and invoices, and internal policies for following appropriate SNAP redemption protocol were submitted on behalf of the client in March 2016. This took extensive time from many members of the firm, including paralegals, Rachelle Allison-Lamb
and Julianne Allen
. Two months later, SNAP notified the law that they were walking back their previous decision.
"Again - unprecedented," exclaimed Simas. "Even though the rules are set up in its favor to exercise its discretion how it sees fit, SNAP will relent. However, it takes focus, determination, and evidence from multiple channels to do so. Our client's persistence that they did nothing wrong was also a great motivator to our team to ensure that justice prevailed. And in this case, I can definitely say that it has."
For more information on Simas & Associates, Ltd. and its health care law
and administrative hearing practice
please visit our website at www.simasgovlaw.com