Federal Food Stamp Fraud Penalties

Welcome to Spodek Law Group. Our goal is to give you the reality of federal food stamp fraud penalties - not the sanitized version state agencies present, not the "just pay it back" fiction, but the actual truth about what happens when the federal government decides to make an example out of you.

Most people who end up facing food stamp fraud charges had no idea they were committing a federal crime. They thought they were dealing with a state welfare program, maybe some paperwork issues, worst case a letter saying they had to repay benefits. What they didn't understand is that the moment you exchange SNAP benefits for cash - what the government calls "trafficking" - you've crossed into federal territory. And federal territory means 7 U.S.C. § 2024. It means the FBI. It means USDA Office of Inspector General. It means sentences measured in years, not months.

The penalty structure under federal law is designed to escalate rapidly based on the dollar amount involved. For amounts under $100, you're looking at a misdemeanor with up to one year in prison and fines up to $1,000. Cross the $100 threshold and you're in felony territory - up to five years and $10,000 in fines. But here's the line that changes everything: $5,000. Once the government can prove you trafficked $5,000 or more in SNAP benefits, the maximum penalty jumps to 20 years in federal prison and fines up to $250,000.

The Federal Crime Nobody Expects

Here is the thing most people do not understand about food stamp fraud. It is not handled by your local welfare office. The Supplemental Nutrition Assistance Program is administered by the United States Department of Agriculture, which makes any fraud against it a federal matter. When you are accused of SNAP trafficking, you are not dealing with a state caseworker who might let you pay back benefits and move on. You are dealing with federal investigators who have been building a case against you for months, sometimes years, before you ever hear a word about it.

The USDA Office of Inspector General maintains a dedicated team of analysts and investigators whose entire job is identifying and prosecuting retailer fraud. They work in partnership with the FBI, the Secret Service, and local law enforcement agencies across the country. In Cleveland last year, an 11-month investigation involving the Secret Service, Ohio Investigative Unit, and USDA Food Nutrition Services resulted in a $100,000 fraud bust. In Boston in December 2025, federal prosecutors announced charges against two convenience store owners for trafficking nearly $7 million in SNAP benefits. That is the level of resources and attention they dedicate to these cases.

And it is not just retailers who face federal exposure. Recipients who sell their benefits for cash - even small amounts, even one time - can find themselves facing the same federal statutes. The law does not distinguish between the store owner running a sophisticated trafficking operation and the desperate parent who sold $200 in benefits to keep the lights on. Both face potential felony charges under 7 U.S.C. § 2024. Both face the same mandatory minimums. Both face the same life-altering consequences.

The Boston case is particularly instructive because it shows how the federal government approaches these investigations. The two store owners were operating convenience stores in Mattapan that were receiving up to half a million dollars in monthly SNAP redemptions. Normal stores in similar neighborhoods might process $20,000 to $50,000 in monthly SNAP transactions. The deviation was so extreme that federal algorithms flagged it almost immediately. But the investigation ran for years before the indictment came down. The government was patient. They were thorough. And by the time they moved, they had everything they needed to secure convictions.

Why Your EBT Card Is Basicly a Surveillance Device

Here is were it gets uncomfortable for anyone who has participated in SNAP trafficking. Every single transaction you make with your EBT card is logged, timestamped, and geolocated. The government does not need witnesses. They do not need video footage. They do not need to catch you in the act. They have something better - they have data. Mountains of it. Years of it.

USDA uses sophisticated pattern recognition algorithms that flag suspicious transactions automaticaly. Round-number purchases are flagged. Late-night activity is flagged. Rapid sequential transactions at the same store are flagged. Unusual purchasing patterns that do not match normal grocery shopping behavior are flagged. The system is constantly analyzing millions of transactions looking for anomalies that suggest trafficking rather than legitimate food purchasing.

What this means is that by the time anyone from the government contacts you, they have already been watching. The investigation started months ago, maybe more then a year ago. Your transaction history has been pulled, analyzed, cross-referenced with store records, and packaged into a case file. The interview is not the beginning of the investigation - it is the end. They are already certain they have enough to prosecute. They are just giving you a chance to confess, to add your own words to the evidence against you.

Think about that for a second. Let that sink in. The investigation you did not know about has been running for six months, twelve months, eighteen months. Every transaction has been catalogued. Every pattern has been analyzed. And now an agent is standing at your door, asking if you would like to talk. What you say in that moment can determine whether you face years in federal prison or something less catastrophic.

The $5,000 Line That Changes Everything

OK so let us talk about that $5,000 threshold becuase it is the most important number in federal food stamp fraud law. Below $5,000, you are looking at up to 5 years in prison and fines up to $10,000. Above $5,000, you are looking at up to 20 years in federal prison and fines up to $250,000. That is not a gradual escalation - that is a cliff. And federal prosecutors know exactly where that cliff is.

And here is the kicker that catches most people completly off guard. The government does not have to prove you trafficked $5,000 in a single transaction or even a single month. They can aggregate transactions over time. That $200 sale in January, the $150 in March, the regular exchanges throughout the year - they add up. Federal prosecutors are experts at building cases that cross the magic threshold. They will comb through eighteen months of transaction records and total every suspicious purchase until they reach that number.

As Todd Spodek often explains to clients facing SNAP trafficking charges, the aggregation issue is what catches people completly off guard. They think because each individual transaction was small, they are safe from serious penalties. Then they see the indictment totaling eighteen months of transactions and realize they are facing federal felony exposure they never anticipated. The small amounts that seemed insignificant when they occurred have been weaponized into a case that could result in decades of incarceration.

The mandatory minimums make the situation even worse. For values between $100 and $5,000, any subsequent conviction carries a mandatory prison term of at least six months. For knowing presentation of illegally obtained benefits over $100, subsequent convictions mean at least one year mandatory. These are not discretionary guidelines that a sympathetic judge can work around - they are requirements that must be imposed regardless of circumstances.

How They Build The Case Before You Even Know

What actualy happens in a federal food stamp fraud investigation? Here is the part nobody talks about, the part that makes experienced defense attorneys tell their clients to be very careful about what they say.

It starts with the algorithms flagging your transactions or the store you frequent. Maybe a store you visit regularly has unusual redemption patterns - recieving $500,000 a month in SNAP when similar stores get $30,000. Maybe your card shows purchases that do not match normal grocery patterns. The system flags it, and a human analyst takes a look. If the analyst sees enough suspicious activity, they open an investigation. This is were it gets serious.

USDA OIG pulls complete transaction records going back months or years. They identify every customer of a suspicious store. They cross-reference patterns between different customers and different stores. They build timelines showing exactly when trafficking occurred and how much was involved. All of this happens without your knowledge. All of this happens while you continue making the same transactions, adding to the evidence against you.

For retailers, the next step is often an undercover operation. Federal agents pose as SNAP recipients looking to sell benefits. They document every transaction meticulously. They record conversations. They build a case that does not rely on testimony from other defendants - it relies on their own evidence, gathered by trained investigators following federal protocols.

For recipients, the case building is more passive but just as thorough. Your transactions tell the story. Multiple purchases at flagged stores. Patterns that match trafficking behavior. Timing that correlates with when the store was engaged in known illegal activity. By the time you get that knock on the door, they have months or years of data ready to present to a grand jury.

The Oregon case from 2024 illustrates how thorough these investigations become. Giovanni Spirea was sentenced to 24 months in federal prison for operating a $2.4 million SNAP trafficking scheme spanning multiple states. He was one of 17 defendants indicted in the case. Federal investigators did not just catch one person - they mapped an entire network of trafficking and prosecuted everyone connected to it.

What Happens When The Store Owner Flips

Here is the uncomfortable truth that recipients involved in trafficking need to understand, because this is were cases go from bad to catastrophic. The store owner is going to cooperate with investigators. It is not a question of if - it is a question of when. And when they cooperate, they are going to name everyone who sold them benefits.

Store owners facing federal charges have enormous incentive to provide information about their customers. Cooperation can mean reduced sentences, sometimes dramaticaly reduced. In the $66 million SNAP fraud case in New York - one of the largest in U.S. history - the USDA employee involved faced potential sentences of up to 75 years. She received 24 months. Cooperation matters more than almost anything else in federal sentencing.

This creates a cascade effect that sweeps up everyone connected to the trafficking operation. The store owner names customers. Those customers face charges. Some of them cooperate and name others. The investigation expands outward in waves, catching everyone who ever exchanged benefits at that location. What started as one store owner getting caught becomes dozens of prosecutions.

What does this mean for you? It means that "everyone does it" friend who showed you how to sell your benefits might have already talked to investigators. That store owner who seemed friendly and discreet has a federal agent's business card in his wallet right now, debating when to make the call that saves his own skin. The network you thought was invisible to authorities is actually a web of potential witnesses, each one with incentive to give you up.

At Spodek Law Group, we have seen this pattern repeat endlessly. The client comes in thinking they are the only one being investigated. Then we pull the court records and realize they are one of forty people charged in the same operation. The store owner flipped months ago. Half the other customers have already pled guilty. The government's case file is full of cooperating witnesses ready to testify about exactly what happened.

The Destruction That Follows Conviction

A federal food stamp fraud conviction does not just mean prison time. It means the systematic destruction of your ability to function in society afterward. The collateral consequences extend far beyond whatever sentence the judge imposes.

First, you are permanantly barred from SNAP benefits. Forever. It does not matter if your circumstances change, if you fall on hard times again, if you have children who need food assistance. A trafficking conviction means permanant disqualification from the program. The safety net you abused is gone, and it will not come back regardless of how much your situation changes.

Second, you are a federal felon. That designation follows you for the rest of your life. Background checks reveal federal convictions. Many employers have blanket policies against hiring felons, and those that do not often discriminate anyway. The jobs that remain available often do not pay enough to support a family - the same financial pressure that led to trafficking in the first place. The cycle continues, but now with a federal conviction making everything harder.

Third, there is housing. Federal housing assistance programs, Section 8 vouchers, public housing - all have restrictions on applicants with fraud convictions. The apartment you could barely afford becomes unavailable. The waiting list you were on for years - you are removed from it. Finding stable housing with a federal conviction is exponentially more difficult than finding it without one.

Fourth, if you are not a U.S. citizen, a federal felony conviction can trigger deportation proceedings. SNAP fraud is considered a crime involving moral turpitude under immigration law. The consequences can include mandatory deportation, permanent inadmissibility, and separation from family members who are citizens or legal residents. This is not theoretical - it happens.

And all of this assumes you serve your sentence and get out. Federal prison is not state prison. There is no parole in the federal system. You serve at least 85% of your sentence, no matter what. If you are looking at 5 years, you are doing at least 4 years and 3 months. If you are looking at 20 years, you are doing at least 17 years. These are real numbers representing real years of your life.

What You Can Actually Do About This

If you are reading this because you have recieved notice of an investigation, or because someone you sold benefits to got arrested, or because federal agents showed up at your door - you need to understand something. The window for effective legal action is small and closing rapidly.

The decisions you make in the first days after becoming aware of an investigation can determine whether you are facing months or decades. Talking to investigators without counsel is almost always a mistake that results in confession or damaging admissions. Trying to contact co-defendants or destroy evidence is obstruction of justice - a seperate federal crime that adds years to your potential sentence. Continuing to use your EBT card in any suspicious way adds to the evidence against you.

Todd Spodek and the team at Spodek Law Group have handled federal food stamp fraud cases at every scale - from individual recipients facing their first charges to store owners caught in multi-million dollar trafficking operations. The approach is the same regardless of scale: understand exactly what the government has, identify weaknesses in their case, and develop a strategy that achieves the best possible outcome given the circumstances.

Sometimes that means fighting the charges at trial. Sometimes it means negotiating a plea agreement that avoids the worst penalties. Sometimes it means positioning for cooperation credit to reduce exposure. The right strategy depends on the specifics of your situation - the amounts involved, the evidence they have, your criminal history, your immigration status, and a dozen other factors that only become clear after careful analysis.

What it never means is hoping this goes away on its own. Federal prosecutors do not bring cases they intend to lose. The 93% conviction rate in federal courts exists because they only charge cases they can prove. If you are facing federal food stamp fraud charges, the government is confident they can convict you. The question is what you do with that reality.

The Clock Is Running

The federal government had months or years to build their case against you. They have teams of analysts, federal agents, and prosecutors with functionally unlimited resources. They have your complete transaction history as evidence. They have cooperating witnesses ready to testify. They have algorithms that have already mapped every suspicious transaction you ever made.

You have days to respond effectively. Maybe weeks if you are lucky. The initial decisions - whether to speak with investigators, how to handle arraignment, whether to cooperate or contest - these shape everything that follows. Get them wrong and you face maximum exposure. Get them right and there may be options you cannot see from where you are standing.

This call costs nothing. Not making it costs everything you have. 212-300-5196.

The same system that was supposed to help feed your family is now designed to destroy your life. That might not be fair. It might not be proportional to what you actually did. But it is the reality you are facing, and pretending otherwise will not change the outcome. The federal government has already decided to prosecute you. The only remaining question is how you respond.

How will you use the time you have left?