SNAP and Food Stamp Fraud Defense in New York

If you have received a letter from HRA, the Department of Social Services, the Office of the Inspector General, or the Bureau of Fraud Investigation asking you to come in for an interview, you are under investigation for SNAP or welfare fraud. The interview is not a formality. Anything you say will be used in the administrative case for an overpayment, in an Intentional Program Violation hearing, and potentially in a criminal prosecution under Penal Law Article 158 (Welfare Fraud).

Three Tracks — One Investigation

1. Administrative Overpayment

The agency calculates an alleged overpayment and demands repayment. The overpayment can be inadvertent, agency-error, or client-caused. Only the third triggers fraud exposure.

2. Intentional Program Violation (IPV)

Federal regulations require the state to offer an Intentional Program Violation hearing before disqualifying you from SNAP. A finding of IPV disqualifies you from SNAP for one year on the first offense, two years on the second, and permanently on the third — and creates collateral consequences for housing and other benefits. We litigate IPV hearings aggressively because the standard is preponderance, the rules of evidence are relaxed, and the agency's case is often thinner than it looks.

3. Criminal Prosecution

Welfare fraud is graded by amount under Penal Law §§ 158.05 through 158.25, from Class A misdemeanor up to Class B felony. The investigation builds the record that the District Attorney later uses to indict.

The Categories of SNAP Fraud We Defend

SNAP fraud is a single label that covers very different conduct. The defense depends on which category the case actually fits, and the agency is not always careful about distinguishing them at the charging stage.

Recipient Fraud

Recipient fraud is the household side of the case. The recurring allegations are unreported earned income, unreported self-employment or 1099 work, unreported household members whose income would have reduced the benefit, undisclosed bank accounts or property, dual participation in another state, and misrepresentation of immigration status or identity at application. Eligibility rules sit at 7 U.S.C. § 2015 and 7 C.F.R. Part 273; the recertification questions track those rules and become the basis for a false-statement theory under 18 U.S.C. § 1001 in federal court or Social Services Law § 145 and Penal Law Article 175 in state court.

Retailer Trafficking

Retailer trafficking is the store side — the exchange of SNAP benefits for cash, tobacco, alcohol, or other ineligible items. It is investigated by USDA-FNS Retailer Investigations Branch and by USDA-OIG agents, often with undercover buys and ALERT data analytics. Penalties run on two tracks: administrative disqualification under 7 C.F.R. Part 278 (including permanent disqualification for trafficking and the transfer-of-ownership penalty under 7 U.S.C. § 2021(e)(1)), and criminal prosecution under 7 U.S.C. § 2024 for trafficking, with frequent mail and wire fraud counts under 18 U.S.C. §§ 1341 and 1343 and conspiracy under 18 U.S.C. § 371. We address this category in detail on our SNAP fraud attorney page.

EBT Structuring and Card Misuse

Repeated even-dollar EBT withdrawals, transactions just below thresholds, manual entry by a clerk, and benefit sales to third parties are all flagged. The federal exposure is trafficking under 7 U.S.C. § 2024. The state exposure pairs welfare fraud with grand larceny under Penal Law Article 155 and falsifying business records under Penal Law Article 175 when an EBT receipt or store ledger is the falsified instrument.

Fictitious-Stamp and Counterfeit Schemes

Although paper food stamps have been replaced by EBT, federal law still treats counterfeit, altered, or fictitiously issued SNAP benefits as a distinct offense under 7 U.S.C. § 2024. These cases are rare but carry the highest exposure, and they are almost always charged federally.

State Forum or Federal Forum

The forum drives everything — the discovery rules, the sentencing exposure, the collateral consequences. Most recipient cases stay in state court. Most retailer cases go federal. The agency that opens the file usually signals the forum.

• State court. HRA Bureau of Fraud Investigation in New York City and local Departments of Social Services upstate refer to the local District Attorney. Charges run under Penal Law Article 158 with companion counts under Articles 155 and 175 and Social Services Law § 145.
• Federal court. USDA-OIG and USDA-FNS refer to the U.S. Attorney for the Southern, Eastern, Northern, or Western District of New York. Charging instruments use 7 U.S.C. § 2024 and Title 18 fraud statutes. Sentencing runs under U.S.S.G. § 2B1.1 with loss amount as the principal driver.
• Dual referral. A large retailer case can produce both federal trafficking charges and a state larceny indictment. Coordinating the two tracks is part of the defense; an uncoordinated plea in one forum will be used in the other.

Sentencing Exposure

State sentencing under Penal Law Article 158 follows the felony class. A Class E felony carries up to four years, Class D up to seven, Class C up to fifteen, and Class B up to twenty-five. For first felony offenders the actual exposure is usually shorter and probation is available, but restitution is not optional — the agency's overpayment number rides with the case to sentencing and becomes a judgment.

Federal sentencing is driven by the loss table at U.S.S.G. § 2B1.1. Loss is the total benefits trafficked or wrongfully obtained, not the defendant's profit, and the difference is often dramatic in retailer cases. Sophisticated-means, role-in-the-offense, and number-of-victims enhancements appear regularly. Restitution under the Mandatory Victims Restitution Act and forfeiture of trafficking proceeds are both standard.

Restitution, Forfeiture, and the Money After the Case

In state court the overpayment number computed by HRA or the local DSS becomes a restitution number at sentencing, with a 10 percent surcharge under Penal Law § 60.27. The court signs a restitution judgment that is enforceable as a civil judgment, survives discharge in bankruptcy under 11 U.S.C. § 523, and lives on the recipient's credit report for years. Where the parties disagree on the number, CPL § 400.30 entitles the defendant to a restitution hearing — an underused tool that frequently cuts the agency's claim.

In federal court restitution is mandatory under the Mandatory Victims Restitution Act, 18 U.S.C. § 3663A, and joint-and-several across co-defendants in trafficking cases. Trafficking proceeds are subject to criminal forfeiture under 18 U.S.C. § 982 and 21 U.S.C. § 853, sweeping in bank accounts, vehicles, and sometimes the store itself. The forfeiture proceedings are separate from the criminal case and run on their own schedule.

Intentional Program Violation Disqualification Periods

Even where the criminal case is dismissed or reduced, the administrative IPV finding can stand independently. The disqualification periods under 7 C.F.R. § 273.16(b) are tiered: twelve months for the first IPV, twenty-four months for the second, and permanent for the third. Trafficking findings carry a two-year disqualification on the first offense and permanent disqualification on the second. A separate ten-year disqualification applies for false representation of identity or residency to receive multiple benefits, and a permanent disqualification applies for trafficking benefits valued at $500 or more in a single transaction.

Collateral Consequences That Outlast the Sentence

• Immigration. Welfare fraud is treated as a crime involving moral turpitude. A loss above $10,000 raises aggravated felony exposure as a theory of theft or fraud. Non-citizens should not resolve a SNAP case without coordinated immigration advice.
• Public housing. NYCHA and Section 8 tenancies can be terminated for fraud convictions and for IPV findings even without a conviction.
• Professional licensing. Healthcare, education, finance, and security licensing boards treat welfare fraud as a fitness issue. Mandatory reporting deadlines run from the date of conviction.
• Future benefits. Disqualification periods under 7 C.F.R. § 273.16 apply to SNAP. Medicaid and other benefits have their own consequences, which we cover on our Medicaid fraud attorney page.

Where the Statute of Limitations Cuts

Time limits matter and are frequently overlooked. In New York state court the statute of limitations for most welfare-fraud felonies and misdemeanors is five years under CPL § 30.10, although some related larceny theories carry their own clock. In federal court the general fraud statute of limitations is five years under 18 U.S.C. § 3282, with longer windows for bank-record-based theories under 18 U.S.C. § 3293. The agency's overpayment claim, by contrast, has no comparable cutoff — HRA routinely calculates overissuance going back ten years or more. Moving the criminal case to a tighter window often removes the felony exposure even where the civil case remains.

What to Do Before the Interview

• Do not go alone.
• Do not bring documents the agency has not specifically requested.
• Do not lie or speculate.
• Do call a lawyer before the interview is scheduled, not after.

For the investigation stage specifically, see our pages on SNAP investigation attorney and received a SNAP investigation letter. For the broader criminal picture see criminal defense lawyer.

If you have received an HRA investigation letter, an intentional program violation notice, or a criminal complaint for welfare fraud, call us at 212-233-1233 or email [email protected].