[Code of Federal Regulations]
[Title 7 Volume 4]
[Revised as of January 1, 2001]
From the U.S. Government Printing Office via GPO Access
[CITE: 7CFR271.5]

[Page 515-518]
 
                          TITLE 7--AGRICULTURE
 
    CHAPTER II--FOOD AND NUTRITION SERVICE, DEPARTMENT OF AGRICULTURE
 
PART 271--GENERAL INFORMATION AND DEFINITIONS--Table of Contents
 
Sec. 271.5  Coupons as obligations of the United States, crimes and offenses.

    (a) Coupons as obligations. Pursuant to section 15(d) of the Food 
Stamp Act, coupons are an obligation of the United States within the 
meaning of 18 United States Code (U.S.C.) 8. The provisions of Title 18 
of the United States Code, ``Crimes and Criminal Procedure,'' relative 
to counterfeiting, misuse and alteration of obligations of the United 
States are applicable to coupons.
    (b) Penalties. Any unauthorized issuance, redemption, use, transfer, 
acquisition, alteration, or possession of coupons, ATP cards, or other 
program

[[Page 516]]

access device may subject an individual, partnership, corporation, or 
other legal entity to prosecution under sections 15 (b) and (c) of the 
Food Stamp Act or under any other applicable Federal, State or local 
law, regulation or ordinance.
    (1) Section 15(b)(1) of the Food Stamp Act reads as follows:

    Subject to the provisions of paragraph (2) of this subsection, 
whoever knowingly uses, transfers, acquires, alters, or possesses 
coupons, authorization cards, or access devices in any manner contrary 
to this Act or the regulations issued pursuant to this Act shall, if 
such coupons, authorization cards, or access devices are of a value of 
$5000 or more, be guilty of a felony and shall be fined not more than 
$250,000 or imprisoned for not more than twenty years, or both, and 
shall, if such coupons or authorization cards are of a value of $100 or 
more but less than $5000 or if the item used, transferred, acquired, 
altered or possessed is an access device that has a value of $100 or 
more but less than $5000 be guilty of a felony and shall upon the first 
conviction thereof, be fined not more than $10,000 or imprisoned for not 
more than five years, or both, and upon the second and any subsequent 
conviction thereof, shall be imprisoned for not less than six months nor 
more than five years and may also be fined not more than $10,000 or, if 
such coupons or authorization cards are of a value of less than $100, or 
if the item used, transferred, acquired, altered, or possessed is an 
access device that has a value of less than $100, shall be guilty of a 
misdemeanor, and upon the first conviction thereof, shall be fined not 
more than $1000 or imprisoned for not more than one year or both, and 
upon the second and any subsequent conviction thereof, shall be 
imprisoned for not more than one year and may also be fined not more 
than $1000. In addition to such penalties, any person convicted of a 
felony or misdemeanor violation under this subsection may be suspended 
by the court from participation in the food stamp program for an 
additional period of up to eighteen months consecutive to that period of 
suspension mandated by section 6(b)(1) of this Act.


    (2) Section 15(b)(2) of the Food Stamp Act reads as follows:


    In the case of any individual convicted of an offense under 
paragraph (b)(1) of this section, the court may permit such individual 
to perform work approved by the court for the purpose of providing 
restitution for losses incurred by the United States and the State 
agency as a result of the offense for which such individual was 
convicted. If the court permits such individual to perform such work and 
such individual agrees thereto, the court shall withhold the imposition 
of the sentence on the condition that such individual perform the 
assigned work. Upon the successful completion of the assigned work the 
court may suspend such sentence.


    (3) Section 15(c) of the Food Stamp Act reads as follows:

    Whoever presents, or causes to be presented, coupons for payment or 
redemption of the value of $100 or more, knowing the same to have been 
received, transferred, or used in any manner in violation of the 
provisions of this Act or the regulations issued pursuant to this Act, 
shall be guilty of a felony and, upon the first conviction thereof, 
shall be fined not more than $20,000 or imprisoned for not more than 
five years, or both, and upon the second and any subsequent conviction 
thereof, shall be imprisoned for not less than one year nor more than 
five years and may also be fined not more than $20,000 or if such 
coupons are of a value of less than $100, shall be guilty of a 
misdemeanor and, upon the first conviction thereof, shall be fined not 
more than $1,000 or imprisoned for not more than one year, or both, and 
upon the second and any subsequent conviction thereof, shall be 
imprisoned for not more than one year and may also be fined not more 
than $1,000. In addition to such penalties, any persons convicted of a 
felony or misdemeanor violation under this subsection may be suspended 
by the court from participation in the food stamp program for an 
additional period of up to eighteen months consecutive to that period of 
suspension mandated by section 6(b)(1) of this Act.


    (c) Security for coupons and ATP's. All individuals, partnerships, 
corporations, or other legal entities including State agencies and their 
delegatees (referred to in this paragraph as ``persons'') having 
custody, care and control of coupons and ATP's shall, at all times, take 
all precautions necessary to avoid acceptance, transfer, negotiation, or 
use of spurious, altered, or counterfeit coupons and ATP's and to avoid 
any unauthorized use, transfer, acquisition, alteration or possession of 
coupons and ATP's. These persons shall safeguard coupons and ATP's from 
theft, embezzlement, loss, damage, or destruction.
    (d) Coupon issuers. (1) Any coupon issuer or any officer, employee 
or agent, thereof convicted of failing to provide the monthly reports 
required in Sec. 274.5 or convicted of violating part 274 shall be 
subject to a fine of not

[[Page 517]]

more than $1,000, or imprisoned for not more than 1 year, or both.
    (2) Any coupon issuer or any officer, employee or agent, thereof 
convicted of knowingly providing false information in the reports 
required under Sec. 274.5 shall be subject to a fine of not more than 
$10,000, or imprisoned not more than 5 years, or both.
    (e) Forfeiture and denial of property rights.
    (1) General.
    (i) Any nonfood items, moneys, negotiable instruments, securities, 
or other things of value furnished or intended to be furnished by any 
person in exchange for food coupons, authorization cards, or other 
program benefit instruments or access devices in any manner not 
authorized by the Food Stamp Act or regulations issued pursuant to the 
Act, shall be subject to forfeiture and denial of property rights. Such 
property is deemed forfeited to the United States Department of 
Agriculture (USDA) at the time it is either exchanged or offered in 
exchange.
    (ii) These forfeiture and denial of property rights provisions shall 
apply to property exchanged or offered in exchange during investigations 
conducted by the Inspector General, USDA, and by other authorized 
Federal law enforcement agencies.
    (iii) These forfeiture and denial of property rights provisions 
shall not apply to property exchanged or intended to be exchanged during 
the course of internal investigations by retail firms, during 
investigations conducted solely by State and local law enforcement 
agencies and without the participation of an authorized Federal law 
enforcement agency, or during compliance investigations conducted by the 
Food and Nutrition Service.
    (2) Custodians and their responsibilities.
    (i) The Inspector General, USDA, the Inspector General's designee, 
and other authorized Federal law enforcement officials shall be 
custodians of property acquired during investigations.
    (ii) Upon receiving property subject to forfeiture the custodian 
shall:
    (A) Place the property in an appropriate location for storage and 
safekeeping, or
    (B) Request that the General Services Administration (GSA) take 
possession of the property and remove it to an appropriate location for 
storage and safekeeping.
    (iii) The custodian shall store property received at a location in 
the judicial district where the property was acquired unless good cause 
exists to store the property elsewhere.
    (iv) Custodians shall not dispose of property prior to the 
fulfillment of the notice requirements set out in paragraph 3, or prior 
to the conclusion of any related administrative, civil, or criminal 
proceeding, without reasonable cause. Reasonable cause to dispense with 
notice requirements might exist, for example, where explosive materials 
are being stored which may present a danger to persons or property.
    (v) Custodians may dispose of any property in accordance with 
applicable statutes or regulations relative to disposition. The 
custodian may:
    (A) Retain the property for official use;
    (B) Donate the property to Federal, State, or local government 
facilities such as hospitals or to any nonprofit charitable 
organizations recognized as such under section 501(c)(3) of the Internal 
Revenue Code; or
    (C) Request that GSA take custody of the property and remove it for 
disposition or sale.
    (vi) Proceeds from the sale of forfeited property and any moneys 
forfeited shall be used to pay all proper expenses of the proceedings 
for forfeiture and sale including expenses of seizure, maintenance of 
custody, transportation costs, and any recording fees. Moneys remaining 
after payment of such expenses shall be deposited into the general fund 
of the United States Treasury.
    (3) Notice requirements.
    (i) The custodian shall make reasonable efforts to notify the actual 
or apparent owner(s) of or person(s) with possessory interests in the 
property subject to forfeiture except for the good cause exception if 
the owner cannot be notified.
    (ii) The notice shall:
    (A) Include a brief description of the property;

[[Page 518]]

    (B) Inform the actual or apparent owner(s) of or person(s) with 
possessory interests in the property subject to forfeiture of the 
opportunity to request an administrative review of the forfeiture;
    (C) Inform the actual or apparent owner(s) of or person(s) with 
possessory interests in the property subject to forfeiture of the 
requirements for requesting administrative review of the forfeiture; and
    (D) State the title and address of the official to whom a request 
for administrative review of the forfeiture may be addressed.
    (iii) Except as provided in paragraphs (e)(3) (iv) and (v) of this 
section, notice shall be given within 45 days from the date the United 
States convicts, acquits, or declines to act against the person who 
exchanged the property.
    (iv) Notice may be delayed if it is determined that such action is 
likely to endanger the safety of a law enforcement official or 
compromise another ongoing criminal investigation conducted by OIG, the 
United States Secret Service, the United States Postal Inspection 
Service, or other authorized Federal law enforcement agency.
    (v) Notice need not be given to the general public.
    (4) Administrative review.
    (i) The actual or apparent owner(s) of or person(s) with possessory 
interests in the property shall have 30 days from the date of the 
delivery of the notice of forfeiture to make a request for an 
administrative review of the forfeiture.
    (ii) The request shall be made in writing to the Assistant Inspector 
General for Investigations, Office of Inspector General, USDA, or to 
his/her designee, hereinafter referred to as the reviewing official.
    (iii) A request for an administrative review of the forfeiture of 
property shall include the following:
    (A) A complete description of the property, including serial 
numbers, if any;
    (B) Proof of the person's property interest in the property; and,
    (C) The reason(s) the property should not be forfeited.
    (iv) The requestor may, at the time of his/her written request for 
administrative review, also request an oral hearing of the reasons the 
property should not be forfeited.
    (v) The burden of proof will rest upon the requestor, who shall be 
required to demonstrate, by a preponderance of the evidence, that the 
property should not be forfeited.
    (vi) Should the administrative determination be in their favor, the 
actual or apparent owner(s) of or person(s) with possessory interests in 
the property subject to forfeiture may request that forfeited items be 
returned or that compensation be made if the custodian has already 
disposed of the property.
    (vii) The reviewing official shall not remit or mitigate a 
forfeiture unless the requestor:
    (A) Establishes a valid, good faith property interest in the 
property as owner or otherwise; and
    (B) Establishes that the requestor at no time had any knowledge or 
reason to believe that the property was being or would be used in 
violation of the law; and
    (C) Establishes that the requestor at no time had any knowledge or 
reason to believe that the owner had any record or reputation for 
violating laws of the United States or of any State for related crimes.
    (viii) The reviewing official may postpone any decision until the 
conclusion of any related administrative, civil, or criminal proceeding.
    (ix) The decision of the reviewing official as to the disposition of 
the property shall be the final agency determination for purposes of 
judicial review.



[Amdt. 132, 43 FR 47882, Oct. 17, 1978, as amended by Amdt. 221, 47 FR 
35168, Aug. 13, 1982; Amdt. 269, 51 FR 10782, Mar. 28, 1986; Amdt. 334, 
57 FR 3911, Feb. 3, 1992; 59 FR 51354, Oct. 11, 1994]