Section 672.505 Federally Mandated Vendor Sanctions

Section 672

Section 672.505  Federally

Mandated Vendor Sanctions

Vendors shall receive the

following sanctions for the following violations as mandated by 7 CFR 246.12:

a)         Permanent

Disqualification

1)         The Department will permanently disqualify a Vendor convicted

of:

A)        trafficking in Food Benefits; or

B)        selling firearms, ammunition, explosives, or controlled

substances (as defined in section 802 of the Controlled Substances Act (21 USC

802), in exchange for Food Benefits.

2)         A Vendor shall not be entitled to receive any compensation for

revenues lost as a result of a violation.

3)         The Department will impose a civil money penalty in lieu of a

disqualification for a violation when it determines, in its sole discretion,

and documents that:

A)        Disqualification of the Vendor would result in inadequate

Participant access; or

B)        The Vendor had, at the time of the violation, a policy and

program in effect to prevent trafficking, and the ownership of the Vendor was

not aware of, did not approve of, and was not involved in the conduct of the

violation.

b)         Six-Year

Disqualification

The Department will disqualify a Vendor for 6 years for:

1)         one incident of buying or selling Food Benefits for cash

(trafficking); or

2)         one incident of selling firearms, ammunition, explosives or

controlled substances as defined in 21 U.S.C. 802, in exchange for Food Benefits

pprove of, and was not involved in the conduct of the

violation.

b)         Six-Year

Disqualification

The Department will disqualify a Vendor for 6 years for:

1)         one incident of buying or selling Food Benefits for cash

(trafficking); or

2)         one incident of selling firearms, ammunition, explosives or

controlled substances as defined in 21 U.S.C. 802, in exchange for Food Benefits.

c)         Three-Year

Disqualification

1)         The Department shall disqualify a Vendor for 3 years for:

A)        One incident of the sale of alcohol or alcoholic beverages or

tobacco products in exchange for Food Benefits;

B)        A pattern of claiming reimbursement for the sale of an amount

of specific supplemental food item that exceeds the store's documented

inventory of that supplemental food item for a specified period of time;

C)        A pattern of charging WIC Cardholders more for supplemental

food than non-WIC customers and/or charging Participants more than the current

shelf price, including any posted sale price or discount, and/or charging

Participants more than what is permitted under the WIC Vendor Contract;

D)        A pattern of receiving, transacting and/or redeeming Food Benefits

outside of authorized channels, including the use of an unauthorized Vendor

and/or unauthorized person;

E)        A pattern of charging for supplemental food not received by the

Participant; or

F)         A pattern of providing credit or non-food items, other than

alcohol, alcoholic beverages, tobacco products, cash, firearms, ammunition,

explosives, or controlled substances as defined in 21 USC 802, in exchange for Food

Benefits.

2)         For the purpose of this Section, a "pattern" will be

activity that is repeated a significant number of times

ot received by the

Participant; or

F)         A pattern of providing credit or non-food items, other than

alcohol, alcoholic beverages, tobacco products, cash, firearms, ammunition,

explosives, or controlled substances as defined in 21 USC 802, in exchange for Food

Benefits.

2)         For the purpose of this Section, a "pattern" will be

activity that is repeated a significant number of times.

3)         For the purpose of determining a "pattern" of

overcharging violations as set forth in subsections (c)(1)(C) and (c)(1)(E),

three or more instances of the activity described in those subsections alone,

but not in combination with each other within a period of 18 months, shall be

significant and constitute a pattern.

4)         With regard to subsection (c)(1)(C), overcharges of 40 cents

or more, or overcharges which constitute 7% or more of the total amount of sale

of WIC Foods to the overcharged Participant on that date, will be considered

significant for the purpose of determining a pattern.  Charging for items not

received, as set forth in subsection (c)(1)(E), will be significant for the

purpose of determining a pattern, regardless what amount is charged for the

food items not received.

d)         One-Year

Disqualification

The Department

will disqualify a Vendor for one year for a pattern of providing unauthorized

food items in exchange for Food Benefits, including charging for supplemental

food provided in excess of those listed on the Food Benefit.

e)         Second

Sanction

When a Vendor

who previously has been assessed a sanction for any of the violations in

subsections (b) through (d) receives another sanction for any of these

violations, the Department will double the second sanction

nauthorized

food items in exchange for Food Benefits, including charging for supplemental

food provided in excess of those listed on the Food Benefit.

e)         Second

Sanction

When a Vendor

who previously has been assessed a sanction for any of the violations in

subsections (b) through (d) receives another sanction for any of these

violations, the Department will double the second sanction.

f)         Third

or Subsequent Sanction

When a Vendor

who previously has been assessed two or more sanctions for violations in

subsections (b) through (d) receives another sanction for any of these

violations, the Department will double the third sanction and all subsequent

sanctions for those violations.

g)         Disqualification Based on a SNAP Disqualification

The Department

will disqualify a Vendor who has been disqualified from SNAP.  The

disqualification will be for the same length of time as the SNAP

disqualification, may begin at a later date than the SNAP disqualification, and

will not be subject to administrative or judicial review under the WIC program.

h)         Voluntary Withdrawal or Non-Renewal of Agreement

The Department

will not accept voluntary withdrawal of the Vendor from the program as an

alternative to disqualification for violations listed in this Section, but will

enter the disqualification on the record. In addition, the Department will not

use non-renewal of the Vendor Agreement as an alternative to disqualification.

i)          Participant

Access Determinations

1)         Prior to disqualifying a Vendor for a violation of subsections

of the Vendor from the program as an

alternative to disqualification for violations listed in this Section, but will

enter the disqualification on the record. In addition, the Department will not

use non-renewal of the Vendor Agreement as an alternative to disqualification.

i)          Participant

Access Determinations

1)         Prior to disqualifying a Vendor for a violation of subsections

(b) through (d) or (g), the Department will determine if disqualification of

the Vendor would result in inadequate Participant access as defined in Section

672.200(b).

2)         When making Participant access determinations, the Department will

consider, at a minimum, the availability of other authorized Vendors within the

same area as the violating Vendor and any geographical barriers to using those

Vendors.

j)          Civil

Money Penalty (CMP)

1)         The Department may impose a CMP in lieu of disqualification

for violations in subsections (b) through (d) or (g) if the Department, in its

sole discretion and based on documentation, determines that disqualification of

the Vendor would result in inadequate Participant access as defined in Section

672.200(b).

2)         If a CMP is imposed in lieu of disqualification, it will be

calculated for each violation subject to sanction under this Section, using the

formula set forth in 7 CFR 246.12(l)(l)(x).

3)         If a Vendor does not pay, or only partially pays, the CMP, the

Department will disqualify the Vendor for the length of the disqualification

corresponding to the violation for which the CMP was assessed (for a period

corresponding to the most serious violation in cases in which the federally

mandated sanction includes the imposition of multiple CMPs as a result of a

single investigation).

4)         CMPs may be doubled for second sanctions under this Section up

to the limits set forth in 7 CFR 246.12(l)(l)(x).  CMPs will not be imposed in

lieu of disqualification for third or subsequent violations under this Section

ing to the most serious violation in cases in which the federally

mandated sanction includes the imposition of multiple CMPs as a result of a

single investigation).

4)         CMPs may be doubled for second sanctions under this Section up

to the limits set forth in 7 CFR 246.12(l)(l)(x).  CMPs will not be imposed in

lieu of disqualification for third or subsequent violations under this Section.

k)         Notification

to Federal Food and Nutrition Service

The Department

will provide the appropriate FNS office with a copy of the notice of

administrative action, and information on Vendors it has disqualified or on

whom it has imposed a CMP in lieu of disqualification for any of the violations

of this Section.  The notice will be provided within 15 days after the Vendor's

opportunity to file for a WIC administrative review has expired or all the

Vendor's WIC administrative reviews have been completed in accordance with

Sections 672.515 and 672.600.

l)          Multiple Violations During a Single Investigation

1)         When, during the course of a single investigation, the

Department determines a Vendor has committed multiple violations (which may

include violations subject to State agency sanctions), the Department will

disqualify the Vendor for the period corresponding to the most serious

federally mandated violation.  However, the Department will include all

violations in the notice of administrative action as outlined in Section

672.510.

2)         An investigation will be considered complete when, in the

judgement of the Department, sufficient evidence exists to determine whether

the Vendor is complying with program requirements.