[Code of Federal Regulations]

[Title 7, Volume 4]

[Revised as of January 1, 2006]

From the U.S. Government Printing Office via GPO Access

[CITE: 7CFR271.5]



[Page 557-560]

 

                          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 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



[[Page 558]]



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 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



[[Page 559]]



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;

    (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



[[Page 560]]



    (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]