How Far Would You Go for a Good Deal?

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Everyone is on the lookout for a good deal. A gazillion websites exist just to help us find the right item, in the right color, for a less expensive price – including free shipping. We are bombarded with ads and coupons just about everywhere we look. Black Friday exists for over exuberant shoppers who are willing to risk life and limb, while waiting in extremely long lines for a chance at a good deal. Deal-obsessed consumers will do some far out things to get what they want, such as some folks in Georgia who travelled up to 100 miles to use their Electronic Benefit Transfer (EBT) cards to get cash instead of groceries, as reported in the Atlanta Business Chronicle. (I wonder if they figured in the cost of gas for chasing the good deal.)

The story states that approximately 1,900 people would frequently visit two small town grocery stores to use their EBT cards to get cash instead of food. (Note? this practice is illegal.) The two men, who operated the stores, received a combined $6 million from the fraudulent business by offering lower transaction rates of 30 to 45 percent on the illegal cash advances. (Most fraudulent businesses tack on a 50% fee, so the Georgia businesses were offering a good deal, in theory.)

Further research shows that the investigation into the two stores began in 2010 after four children were spotted roaming around a nearby community in the middle of the night. When the authorities showed up at the family home, they found the children’s mother high on drugs and the pantry was empty. After questioning the mother, she admitted that she had left her EBT card at a local store where she used it to borrow money to buy drugs. (Unfortunately, this can happen with EBT fraud.) Deputies visited one of the stores and found the shelves stocked with expired items. After comparing store sales with the local grocer 15 miles away, investigators discovered the convenience store had raked in $270,000 more business in one year than the grocery store. A six-month long investigation ensued, uncovering one of the largest food stamp fraud cases in the history of Georgia.

The two store-owners pleaded guilty to charges of food stamp fraud and money laundering. One faces 20 years in prison for each charge, the other faces up to five years in jail. They both are looking at fines and possible restitution. Sixteen EBT cardholders have also pleaded guilty to conspiracy to commit food stamp fraud and are scheduled for sentencing. Each defendant could face up to five years in prison and a $250,000 fine. Restitution amounts range from $6,212 to $15,375, according to plea agreements.

Sadly, this crime is a snapshot of a small, relatively rural area. One can only imagine how much fraud is going on in other communities and metropolitan areas in the State of Georgia, much less across the United States. Public assistance is about lending a helping hand, not keeping a hand out of the cash register.”

Source: Today’s ”Fraud of the Day” is based on an article in the Atlanta Business Chronicle titled, ”Sentencing Scheduled in $6M Food Stamp Fraud Scheme,” written by Carla Caldwell and published on September 16, 2013.

Authorities say as many as 1,900 people who frequented two small Wilkinson County, Ga., grocery stores used their EBT cards to get cash rather than food, and that the two men who operated the stores took in a combined $6 million in fraudulent business, reports the Macon Telegraph.

The two men, Eugene Shinholster and Alfred Boyd, have pleaded guilty to federal charges, the paper reports.

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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.