Federal agents say they executed criminal search warrants at two Twin Cities stores on Thursday as part of an investigation into $2.1 million of Supplemental Nutrition Assistance Program fraud.
Twenty other stores were part of the investigation and are suspected of violating the SNAP program; they were issued administrative charging letters, according to the U.S. Department of Agriculture.
The probe — called “Operation Cold SNAP” — started in February. The USDA says that as part of the schemes, retailers would exchange taxpayer-funded SNAP benefits for cash or other items.
“They bring the card into the store and instead of buying an eligible food item, which is what SNAP is for, they exchange the benefits of that card for cash, for money. And then the retailer will take that money on the card, spend it,” USDA Inspector General John Walk said.
In the past, the USDA has said the…
MANAGEMENT & CULTURE (THE “TONE AT THE TOP”)
Fraud thrives in “sloppy” environments where leadership ignores the rules.
- The Fraud Triangle: For fraud to occur, three elements must be present: Pressure (the need for money), Rationalization (thinking “I deserve this”), and Opportunity (weak controls). You can only control the Opportunity.
- Whistleblower Hotline: Provide an anonymous way for staff to report “odd behavior.” Most internal frauds are caught via tips, not audits.
- Background Checks: Conduct credit and criminal record checks for all employees in financial or data-sensitive roles.
- Annual Ethics Training: Make sure every staff member knows that the company has a Zero Tolerance policy toward “borrowing” from petty cash or fudging overtime.