Pennsylvania has attacked welfare fraud by increasing penalties against merchants and vendors who traffic in Supplemental Nutrition Assistance Program (“SNAP”) benefits under Senate Bill 1127 of 2018, now known as Act 160 (the “Act”). The Act was sponsored by Senator Judith L. Schwank (D-Berks) and Senator Ryan Aument (R-36) who introduced it at the request of Inspector General Bruce Beemer. Beemer’s Office of Inspector General (“OIG”) uncovered a Harrisburg restaurant owner who traded drugs for SNAP benefit cards and used the SNAP benefits to purchase foods from a wholesale club to be resold at a profit. According to Inspector General Beemer, “Criminal merchants who traffic in food benefits deprive people who are hungry of food and inject cash into illicit market for drugs, including opioids.”
This Act serves great public policies to make nutritious food available to people who need it and to deter illegal drug trade by penalizing traffickers who would profit by depriving food insecure people of nutrition and replace that nutrition with illegal drugs or discounted value. The Act increases the maximum criminal penalty to a second degree felony, and authorizes restitution to the victim and restitution to the agency that provides the benefits of up to triple the amount ordered for the victim. The Act also authorizes wiretap authorization for buying and exchanging benefits, revocation of any state license held by the trafficker and debarment of the defendant from doing business with the Commonwealth.
The Supplemental Nutrition Assistance Program is authorized under the federal Food and Nutrition Act of 2008 (the “Federal Law”) whose stated policy is “to safeguard the health and well-being of the Nation’s population by raising levels of nutrition among low-income households.” 7 U.S.C.§ 2011. SNAP is funded under the Federal Law by the Food and Nutrition Service (“FNS”) but recipients apply for and receive SNAP benefits through state or tribal agencies. In Pennsylvania, the Pennsylvania Department of Human Services (“Department”) administers SNAP benefits.
The Department provides SNAP benefits for families (individuals who prepare food together but not necessarily related), senior citizens and able-bodied adults without dependents (“ABAWDs”). For example, a family of four may receive a maximum monthly amount (from October 2018 through September 2019) of $642 based on no income after allowed deductions. SNAP benefits are available on a sliding scale for such a family with a monthly income not exceeding $2,270. Special rules apply to ABAWDs and to senior citizens. An ABAWD is a benefit recipient, ages 18 through 49 with no dependents, who must work or participate in a work program to maintain eligibility for SNAP. Senior citizens apply under separate criteria. The Department has a website for SNAP benefits at http://www.dhs.pa.gov/citizens/supplementalnutritionassistanceprogram/index.htm.
Dollar credits (benefits) are funded electronically in an account to which the beneficiary has access through a Pennsylvania Access Card (“Card”) and a personal identification number (“PIN”). The Card may be used to purchase groceries directly through a Point-of-Sale (“POS”) terminal at the merchant’s business. When the PIN and account balance are verified electronically, the retailer receives an authorization or denial, and if authorized, the beneficiary’s account is debited and the retailer’s account is credited with the amount of the eligible purchase. According to the Department’s website, “[t]he transaction and settlement processes are the same for cash transactions. Recipients are able to use their [Card] to obtain cash benefits through ATMs located throughout the state. In addition, recipients are able to make cash purchases and receive cash back through POS terminals at participating retailers.” Homeless beneficiaries may purchase food at restaurants.
The Act amends the Pennsylvania Crimes Code to discuss SNAP benefits in the current language of the Federal Law: the term “Food Order” is replaced with “SNAP Benefit.” Accordingly, the first SNAP crime is named under 18 Pa. C.S.A. §7313 as “Buying or Exchanging Federal SNAP Benefit Coupons, Stamps, Authorization Cards or Access Devices” (“Unauthorized Exchange”). The second SNAP crime named is under 18 Pa. C. S.A. §7414 as “Fraudulent Traffic in SNAP Benefits” (“Trafficking”) which is the crime enhanced under the Act. The third use of the federal term SNAP Benefits is to include in 18 Pa. C.S.A. §5708 the authority of certain persons in the Offices of the Attorney General and the District Attorneys to apply to the Superior Court for orders authorizing the interception of a wire, electronic or oral communication by the enforcement agency or officers having responsibility for an investigation of an offense punishable for more than year involving 18 Pa. C. S. A. §7313 relating to Unauthorized Exchange. Remarkably, the intercept order statute is not amended to include the crime of Trafficking under 18 Pa. C. S.A. §7414.
Trafficking involves the provision of things for SNAP Benefits and so the offense is not committed by the authorized SNAP recipient. A person commits the offense of Trafficking if he (1) “furnishes or delivers to any person money, merchandise or anything other than food on or in exchange for a SNAP benefit,” (2) “furnishes or delivers food on or in exchange for a SNAP benefit to any person other than the original recipient of the SNAP benefit, or in quantities or for prices other than those itemized on the SNAP Benefit at the time the food is furnished or delivered.”
The grading of Trafficking has been increased to match the importance of the public policies addressed. Previously such an offense was a third degree felony if the amount involved was at least $1,000 and a first degree misdemeanor was less than $1,000. Under the Act, Trafficking is a felony of the second degree if the amount involved is at least $2,500; a felony of the third degree if the amount involved is less than $2,500 but more than $1,000; and misdemeanor of the second degree if the amount involved is less than $1,000. Because the Act requires aggregation of amounts for a single scheme or course of conduct “whether from the same person or several persons” 18 Pa. C.S.A. §7314(A.1)(2), it will be easier for prosecutors to prove second degree felonies. According to 101 Pa. Code § 15.66, the following maximum periods of incarceration and fines apply: a felony of the second degree carries a sentence of incarceration for up to 10 years and a fine of up to $25,000; a felony of the third degree carries maximum penalties of incarceration for 7 years and a fine of $15,000. The Pennsylvania Commission on Sentencing will create sentencing guidelines for Trafficking with a range of minimum sentences to be set forth in a grid of offense gravity scores and prior record scores.
Courts may impose penalties in addition to incarceration. Restitution must be ordered in any sentence to compensate the victims. The merchants or vendors who violate this law likely have assets to compensate victims. In addition, the Act requires that the defendant be ordered to pay to the agency providing the benefits “not less than two times, but not more than three times the amount of restitution ordered.” 18 Pa.C.S.A§7314(B). This penalty is two to three times the amount previously required to be paid to the agency providing the benefits. Further, if the defendant is licensed by the Commonwealth or one of its political subdivisions, the OIG “may refer a violation of this section to the licensing entity for action by the licensing entity as provided by law.” 18 Pa.C.S.A§7314(B.1). Such a referral could result in suspension or revocation of the merchant’s license to do business. Finally, the Act amends 62 Pa. C.S.A.§531(B) to include a trafficking violation as a cause for debarment from doing business with the Commonwealth.
According to Senator Judith L. Schwank, “[The Act] will give police departments around the Commonwealth, and the Pennsylvania Office of Inspector General, a meaningful way to combat SNAP trafficking. It’s going to ensure that benefits are going to those who need them the most.” Some questions to be answered are whether wiretap orders will be available to investigate Trafficking and whether the restitution will be paid to the Department or to the Department for the benefit of FNS. Governor Wolf approved the Act on October 24, 2018, and it took effect December 24, 2018.
© 2018 Robert J. Hobaugh, Jr.
