Going Undercover to Uncover Fraud

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10009658 - hands counting dollar money on white background

It used to be that federal agencies left undercover work to the Federal Bureau of Investigation but now, estimates say that around 40 government agencies have their own staff to do the often dangerous job. A U.S. Department of Agriculture (USDA) investigative agent went undercover to reveal a $1.5 million Supplemental Nutrition Assistance Program (SNAP) fraud scheme at a New Jersey convenience store.

The USDA reportedly has more than 100 undercover investigators who often pose as food stamp recipients at neighborhood stores to root out suspicious vendors, illegally participating beneficiaries and fraud.

The undercover agent at the center of today’s ”Fraud of the Day” posed as a food stamp beneficiary and exchanged SNAP benefits for cash with the convenience store owner and his employees 17 times over a two-year period. Overall, investigators discovered that the $1,588,623 in SNAP benefit transactions exchanged at the convenience store was significantly higher than the amount exchanged at other convenience stores in the area. (The next highest store in the area redeemed only 28 percent of the number of transactions performed at the fraudulent store.)

The convenience store owner pleaded guilty to one count of theft of government funds under a plea agreement. He is facing a maximum sentence of up to 10 years in prison.

Fortunately, this was most likely not a dangerous undercover assignment, but the ramifications of the fraudulent acts are dangerous to the SNAP program, which provides nutritional assistance to millions of low-income individuals and families. When sentenced, let’s hope this fraudster learns that trying to scam the government and millions of qualified beneficiaries out of what they are entitled to is never a good idea.

Source: Today’s ”Fraud of the Day” is based on an article entitled, ”New Jersey Shopkeeper Pleads Guilty to $1 Million in Food Stamp Fraud,” published on NJ.com November 23, 2016.

The owner of an Elizabeth convenience store on Tuesday admitted to fraudulently collecting more than $1 million in federal Supplemental Nutritional Assistance Program benefits, better known as food stamps.

Charles Silva, owner of the Checkpoint Mini Mart, was charged in October after investigators from U.S. Department of Agriculture said Silva and his employees repeatedly traded cash for food stamp purchases made by undercover officers.

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Larry Benson
Larry Benson is currently the Director of Strategic Alliances for Revenue Discovery and Recovery at LexisNexis Risk Solutions. In this role, Benson is responsible for developing partnerships for the tax and revenue and child support enforcement verticals. He focuses on embedded companies that have a need for third-party analytics to enhance their current offerings.