DOJ Announces Settlement With SNAP Consultants Accused of False Claims Act Violations

by Andrew Murray | June 25th, 2019

On June 18, 2019, the Department of Justice announced that a South Dakota woman, Julie Osnes, and her company, Julie Osnes Consulting LLC have agreed to pay $751,571 to the U.S. to settle allegations that they caused states to submit false data in violation of the False Claims Act.

Joseph H. Harrington, United States Attorney for the Eastern District of Washington announced that Julie Osnes and her company, Julie Osnes Consulting LLC (together “Osnes”), of Pierre, South Dakota, agreed to pay the United States $751,571 to resolve allegations that they violated the False Claims Act by causing states to submit false quality control data for the Supplemental Nutrition Assistance Program (SNAP).

Until 2008, SNAP was known as the food stamp program. Under SNAP, the U.S. Department of Agriculture (USDA) provides eligible low-income individuals and families with financial assistance to buy nutritious food. Since 2010, SNAP has served on average more than 45 million Americans per month, and provided more than $71 billion annually. Although the federal government funds SNAP benefits, it relies on the states to determine whether applicants are eligible for benefits, to administer those benefits, and to perform quality control to ensure that eligibility decisions are accurate. The USDA requires that the states’ quality control processes ensure that benefits are correctly awarded, are free from bias, and accurately report states’ error rates in making eligibility decisions.

Between 2008 and 2013, Osnes provided consulting services and advice regarding SNAP quality control to various states. The USDA reimburses states for half of their administrative and quality control expenses in administering SNAP, including costs of consultants like Osnes. The USDA also pays performance bonuses to states that report the lowest and the most improved error rates each year, and can impose monetary sanctions on states with high error rates that do not show improvement.

The settlement resolves allegations that Osnes’ advice and recommendations improperly biased the SNAP quality control processes of the states with which Osnes consulted, in violation of USDA rules. Specifically, the United States alleged that between 2008 and 2013, pursuant to Osnes’ recommendations and advice, certain states manipulated and biased the quality control process to falsely reduce their error rate, resulting in the states receiving bonuses to which they were not entitled based on the false and biased quality control information.

Thus far, the United States has reached settlements with three of the states at issue, Virginia, Wisconsin, and Alaska, resulting in recoveries collectively of more than $17 million.

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