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Press Release

Texas Health and Human Services Commission Agrees to Pay Over $15 Million to Resolve False Claims Act Liability for Deficient Snap Quality Control

For Immediate Release
U.S. Attorney's Office, Eastern District of Washington

The Texas Health and Human Services Commission (THHSC) has agreed to pay the United States $15,294,360 to resolve allegations that it violated the False Claims Act in its administration of the Supplemental Nutrition Assistance Program (SNAP), the Department of Justice announced today. 

“SNAP is an important vehicle for helping needy families,” said Assistant Attorney General Jody Hunt of the Department of Justice’s Civil Division.  “This settlement is an example of the Department’s commitment to ensuring that taxpayer funds are spent appropriately so that the public can have confidence in the integrity of vital programs like SNAP.” 

“Although it is appalling that these actions occurred within a state agency entrusted with assisting vulnerable and needy residents, I am heartened that THHSC has resolved its liability and cooperated with our investigation,” said William D. Hyslop, United States Attorney for the Eastern District of Washington.  “Together with our partners in the Justice Department’s Civil Division and the USDA, we will continue to investigate and hold accountable those who misuse and wrongfully obtain SNAP funding.” 

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.  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. 

USDA reimburses states for a portion of their expenses in administering SNAP, including expenses for providing quality control.  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 THHSC, beginning in 2009, contracted with Julie Osnes Consulting, LLC (Osnes Consulting) to provide advice and recommendations designed to lower its SNAP quality control error rate.  The United States alleged that Osnes Consulting’s recommendations, as implemented by THHSC, injected bias into THHSC’s quality control process, and resulted in THHSC submitting false quality control data and information to USDA for which it received performance bonuses for fiscal years 2010, 2013, and 2014 to which it was not entitled. 

This is the fifth settlement in this matter, and the fourth settlement with a state agency for manipulating its SNAP quality control findings.  The United States has reached previous settlements with state agencies in Virginia, Wisconsin, and Alaska, as well as with Osnes Consulting and its owner, Julie Osnes.  Including this settlement, the United States has now recovered over $32 million in connection with its investigation of deficient state SNAP quality control processes. 

                “We appreciate the commitment and investigative assistance provided by our partners at the Department of Justice’s Civil Division and the U.S. Attorney’s Office throughout this multi-state investigation,” said Special Agent-in-Charge Bethanne M. Dinkins of the USDA Office of Inspector General (OIG).  “We also wish to note the technical assistance provided by our colleagues in the Office of Audit at OIG.  During the investigation, conducted by OIG’s Northeast Regional Office, we worked together to address the concerns of employees of multiple states and others who alleged that the integrity of the SNAP quality control process was weakened by third-party consultants.  These concerned individuals reported that cases were not being treated in a consistent manner, and that certain advice from consultants resulted in identified errors being diminished rather than used to improve eligibility determinations.  The settlements reached to date send a strong message regarding the Government’s commitment to work across agency lines to protect the integrity of SNAP.”

The settlement was the result of a joint investigation conducted by the USDA Office of Inspector General, the U.S. Attorney’s Office for the Eastern District of Washington, and the Department of Justice’s Civil Division, Commercial Litigation Branch.  The investigation arose out of a nationwide audit of SNAP QC processes by the USDA-OIG.  The investigation for the U.S. Attorney’s Office for the Eastern District of Washington was handled by Assistant United States Attorneys Dan Fruchter and Tyler H.L. Tornabene.  The claims resolved by the civil settlement are allegations only and there has been no determination of liability.

Updated December 23, 2019