USDA Investigators Contacted My Grocery Store
A USDA investigator shows up at your grocery store. Maybe they called first, maybe they just appeared. They want to talk about your EBT transactions. About specific purchases. About patterns they've noticed. They seem friendly enough. Professional. You figure you'll just explain how your store operates, clear up any confusion, and they'll move on.
They're not here to gather information. They're here because they already have it.
The USDA doesn't conduct fishing expeditions. When investigators contact your grocery store, it means months - sometimes years - of data analysis have already happened. A system called ALERT has been monitoring every EBT transaction at your store. The suspicious patterns have been identified. The case has been built. That "friendly" conversation is the culmination of an investigation, not the beginning. And the window to protect yourself is measured in days.
Welcome to Spodek Law Group. We handle SNAP fraud defense for grocery store owners, bodega operators, and convenience store retailers facing USDA investigations. If you've been contacted by investigators, if you've received a charge letter from the Food and Nutrition Service, or if you're concerned about transaction patterns at your store - this article explains exactly what you're facing.
The Investigation Started Long Before They Knocked
The USDA uses a fraud detection system called the Anti-fraud Locator using EBT Retailer Transactions - ALERT for short. This system monitors every SNAP purchase at every authorized retailer in the country. Every single transaction.
What does ALERT look for? Round-number transactions. Purchases that happen at unusual times. Transaction patterns that dont match what a store your size should be processing. Multiple transactions from the same EBT card in quick succession. Purchases that seem to deplete an entire monthly benefit in one visit. The algorithm flags all of it. And then human analysts review the flagged accounts. They compare your store to similar stores in your area. They look for patterns that indicate trafficking - exchanging SNAP benefits for cash instead of food.
By the time an investigator contacts you, the analysis is complete.
In 2020, FNS and the USDA Office of Inspector General signed an interagency agreement that changed everything. Cases that used to "drag on for years" according to USDA's own Deputy Under Secretary now move in half the time. The agencies meet twice a year to reconcile active cases. Nothing gets lost in bureaucracy anymore. When they have evidance against your store, they act on it.
The investigator at your door is there to document statements. Your statements. Everything you say can be used in the administrative proceeding to disqualify your store. And if there case is strong enough for criminal referral, everything you say can be used in that prosecution too. The friendly conversation is an interrogation. Your explanations become admissions. And once you've made statements without counsel present, you cant take them back.
Critical warning: Do not discuss transaction patterns, employee practices, or specific purchases with investigators without legal representation. What feels like cooperation often becomes the foundation of the case against you.
What Happens Next: The 10-Day Countdown
After the investigation phase, FNS sends what's called a charge letter. It arrives via UPS overnight delivery. And the moment that letter is delivered, your clock starts.
You have 10 days. Not business days. Calendar days.
Most store owners dont realize how little time they have. The charge letter typically contains:
- Specific transactions that triggered the investigation
- Allegations against your store (trafficking, sale of ineligible items, false statements on your application)
- The proposed penalty - which for trafficking is permantly disqualification
- Your deadline to respond
Your response has to address each allegation specificaly. A general denial saying "we didnt do anything wrong" isnt enough. You need to explain the legitimate business reasons for each flagged transaction. You need documentation. You need to demonstrate that what looked suspicious from the algorithm's perspective actualy has an innocent explanation.
Miss the 10-day deadline and you waive your right to respond. The FNS regional office makes its determination based solely on there investigation - without your side of the story. And once that final determination issues, your options narrow dramatically.
Most retailers dont understand this: the administrative disqualification process can run parallel to a criminal investigation. The USDA OIG and the FBI might be building a case at the exact same time FNS is processing your charge letter. Getting disqualified doesnt protect you from prosecution. And getting prosecuted doesnt protect you from disqualification. There seperate tracks.
And heres the part that catches everyone off guard. For most SNAP violations, if you file an appeal, the disqualification is held in abeyance while your appeal proceeds. You can keep accepting SNAP benefits while the courts sort it out.
Not for trafficking.
Permanent disqualification for trafficking takes effect immediately upon receipt of the determination letter. No abeyance. No continued operations. The day that letter arrives is the day your store loses SNAP authorization. Your customers cant use there EBT cards at your register anymore. And in some neighborhoods, thats the majority of your business.
The Penalties Are Worse Than You Think
SNAP violations dont trigger just one penalty. They trigger multiple penalty tracks running simultaneously. And most store owners have no idea how bad it can get.
The consequences of a SNAP trafficking conviction:
- Permanent disqualification from SNAP - your store can never accept EBT again
- Criminal prosecution under 7 USC 2024 - up to 20 years in federal prison, up to $250,000 in fines
- Wire fraud charges under 18 USC 1343 if electronic transfers involved - another 20 years
- Money laundering charges if proceeds were moved through accounts
- Forfeiture of property used in the fraud scheme
- Restitution orders requiring repayment of every dollar trafficked
- The responsible official barred from ever obtaining SNAP authorization again
The USDA achieved 145 convictions and 383 arrests in 2024 alone. FNS permanently disqualified nearly 1,600 retailers in fiscal year 2021. The agency estimates $12 billion in annual SNAP fraud. And there dedicating serious resources to find it.
Recent cases show what happens when prosecutors get involved. In Harrisburg, Pennsylvania, Mervat Gharib and Adam Rashwan each recieved 21 months in federal prison for a scheme that trafficked $1.09 million through there store over 10 years. In Boston, a 74-year-old bodega owner is facing charges for allegedly trafficking $6.8 million since 2022. In Georgia, Tessema Lulseged got 51 months for a $6.5 million scheme at Big T Supermarket.
And then theres the trap nobody tells you about.
If you're permanently disqualified and decide to sell your store to get out, the USDA can fine you up to $59,000. Just for selling. You cant escape by transferring ownership. The disqualification follows the responsible official - meaning you personally - and the sale triggers a separate civil money penalty.
The fine is appealable within 10 days of recieving the letter. But if you miss that deadline, the USDA levies the fine and pursues you for every dollar.
This is complicated. The charge letter stage requires one kind of response. The criminal investigation stage requires a completly different approach. What helps you in the administrative proceeding might hurt you in the criminal case. Todd Spodek has handled SNAP cases at both stages - understanding when to fight, when to negotiate, and how to avoid making statements that become ammunition for prosecutors.
When Your Ready
If USDA investigators have contacted your grocery store - or if you've recieved a charge letter from FNS - Spodek Law Group can help you understand exactly where you stand.
The consultation is free. No obligation.
What you'll get is an honest assessment. Is this still at the inquiry stage where theres room to explain? Has a formal charge letter been issued? Is there criminal exposure based on the amounts involved? What are realistic outcomes - not best-case fantasies, but actual possibilities based on how these cases play out?
Call us at 212-300-5196. The 10-day window after a charge letter is critical. Once that deadline passes, you've lost leverage you cant get back. And if investigators are still in the inquiry phase, acting now - before statements are documented, before charge letters are issued - gives you options that dissapear once the formal process begins.
Dont wait for the charge letter.
Were here when you need us.
