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U.S. Code as of:
01/03/05
Section 2021. Civil money penalties and disqualification of retail food stores and wholesale food concerns
(a) Disqualification or civil penalty
Any approved retail food store or wholesale food concern may be
disqualified for a specified period of time from further
participation in the food stamp program, or subjected to a civil
money penalty of up to $10,000 for each violation if the Secretary
determines that its disqualification would cause hardship to food
stamp households, on a finding, made as specified in the
regulations, that such store or concern has violated any of the
provisions of this chapter or the regulations issued pursuant to
this chapter. Regulations issued pursuant to this chapter shall
provide criteria for the finding of a violation and the suspension
or disqualification of a retail food store or wholesale food
concern on the basis of evidence that may include facts established
through on-site investigations, inconsistent redemption data, or
evidence obtained through a transaction report under an electronic
benefit transfer system.
(b) Period of disqualification
Disqualification under subsection (a) of this section shall be -
(1) for a reasonable period of time, of no less than six months
nor more than five years, upon the first occasion of
disqualification;
(2) for a reasonable period of time, of no less than twelve
months nor more than ten years, upon the second occasion of
disqualification;
(3) permanent upon -
(A) the third occasion of disqualification;
(B) the first occasion or any subsequent occasion of a
disqualification based on the purchase of coupons or
trafficking in coupons or authorization cards by a retail food
store or wholesale food concern, except that the Secretary
shall have the discretion to impose a civil money penalty of up
to $20,000 for each violation (except that the amount of civil
money penalties imposed for violations occurring during a
single investigation may not exceed $40,000) in lieu of
disqualification under this subparagraph, for such purchase of
coupons or trafficking in coupons or cards that constitutes a
violation of the provisions of this chapter or the regulations
issued pursuant to this chapter, if the Secretary determines
that there is substantial evidence that such store or food
concern had an effective policy and program in effect to
prevent violations of the chapter and the regulations,
including evidence that -
(i) the ownership of the store or food concern was not
aware of, did not approve of, did not benefit from, and was
not involved in the conduct of the violation; and
(ii)(I) the management of the store or food concern was not
aware of, did not approve of, did not benefit from, and was
not involved in the conduct of the violation; or
(II) the management was aware of, approved of, benefited
from, or was involved in the conduct of no more than 1
previous violation by the store or food concern; or
(C) a finding of the sale of firearms, ammunition,
explosives, or controlled substance (as defined in section 802
of title 21) for coupons, except that the Secretary shall have
the discretion to impose a civil money penalty of up to $20,000
for each violation (except that the amount of civil money
penalties imposed for violations occurring during a single
investigation may not exceed $40,000) in lieu of
disqualification under this subparagraph if the Secretary
determines that there is substantial evidence (including
evidence that neither the ownership nor management of the store
or food concern was aware of, approved, benefited from, or was
involved in the conduct or approval of the violation) that the
store or food concern had an effective policy and program in
effect to prevent violations of this chapter; and
(4) for a reasonable period of time to be determined by the
Secretary, including permanent disqualification, on the knowing
submission of an application for the approval or reauthorization
to accept and redeem coupons that contains false information
about a substantive matter that was a part of the application.
(c) Review
The action of disqualification or the imposition of a civil money
penalty shall be subject to review as provided in section 2023 of
this title.
(d) Bonds
As a condition of authorization to accept and redeem coupons, the
Secretary may require a retail food store or wholesale food concern
which has been disqualified or subjected to a civil penalty
pursuant to subsection (a) of this section to furnish a bond to
cover the value of coupons which such store or concern may in the
future accept and redeem in violation of this chapter. The
Secretary shall, by regulation, prescribe the amount, terms, and
conditions of such bond. If the Secretary finds that such store or
concern has accepted and redeemed coupons in violation of this
chapter after furnishing such bond, such store or concern shall
forfeit to the Secretary an amount of such bond which is equal to
the value of coupons accepted and redeemed by such store or concern
in violation of this chapter. Such store or concern may obtain a
hearing on such forfeiture pursuant to section 2023 of this title.
(e) Transfer of ownership; penalty in lieu of disqualification
period; fines for acceptance of loose coupons; judicial action to
recover penalty or fine
(1) In the event any retail food store or wholesale food concern
that has been disqualified under subsection (a) of this section is
sold or the ownership thereof is otherwise transferred to a
purchaser or transferee, the person or persons who sell or
otherwise transfer ownership of the retail food store or wholesale
food concern shall be subjected to a civil money penalty in an
amount established by the Secretary through regulations to reflect
that portion of the disqualification period that has not yet
expired. If the retail food store or wholesale food concern has
been disqualified permanently, the civil money penalty shall be
double the penalty for a ten-year disqualification period, as
calculated under regulations issued by the Secretary. The
disqualification period imposed under subsection (b) of this
section shall continue in effect as to the person or persons who
sell or otherwise transfer ownership of the retail food store or
wholesale food concern notwithstanding the imposition of a civil
money penalty under this subsection.
(2) At any time after a civil money penalty imposed under
paragraph (1) has become final under the provisions of section
2023(a) of this title, the Secretary may request the Attorney
General to institute a civil action against the person or persons
subject to the penalty in a district court of the United States for
any district in which such person or persons are found, reside, or
transact business to collect the penalty and such court shall have
jurisdiction to hear and decide such action. In such action, the
validity and amount of such penalty shall not be subject to review.
(3) The Secretary may impose a fine against any retail food store
or wholesale food concern that accepts food coupons that are not
accompanied by the corresponding book cover, other than the
denomination of coupons used for making change as specified in
regulations issued under this chapter. The amount of any such fine
shall be established by the Secretary and may be assessed and
collected in accordance with regulations issued under this chapter
separately or in combination with any fiscal claim established by
the Secretary. The Attorney General of the United States may
institute judicial action in any court of competent jurisdiction
against the store or concern to collect the fine.
(f) Fines for unauthorized third parties that accept food stamps
The Secretary may impose a fine against any person not approved
by the Secretary to accept and redeem food coupons who violates any
provision of this chapter or a regulation issued under this
chapter, including violations concerning the acceptance of food
coupons. The amount of any such fine shall be established by the
Secretary and may be assessed and collected in accordance with
regulations issued under this chapter separately or in combination
with any fiscal claim established by the Secretary. The Attorney
General of the United States may institute judicial action in any
court of competent jurisdiction against the person to collect the
fine.
(g) Disqualification of retailers who are disqualified under WIC
program
(1) In general
The Secretary shall issue regulations providing criteria for
the disqualification under this chapter of an approved retail
food store or a wholesale food concern that is disqualified from
accepting benefits under the special supplemental nutrition
program for women, infants, and children established under
section 1786 of title 42.
(2) Terms
A disqualification under paragraph (1) -
(A) shall be for the same length of time as the
disqualification from the program referred to in paragraph (1);
(B) may begin at a later date than the disqualification from
the program referred to in paragraph (1); and
(C) notwithstanding section 2023 of this title, shall not be
subject to judicial or administrative review.
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