Not So Quick and Easy

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Good ideas always seem like good ideas until they are not. This is the case for a trio of fraudsters in Milwaukee, Wisconsin who thought they could get away with Supplemental Nutrition Assistance Program (SNAP) fraud. A man, who owned the convenience store, his daughter and the co-owner of the mart thought they could scam the government program meant to provide food for the nation’s most vulnerable citizens. They soon learned that the ruse, which siphoned more than $1.2 million from the SNAP program, would not be as quick and easy as they originally thought.

The deceptive threesome operated Quick N EZ, which started out as a legitimate store authorized to participate in the SNAP and Special Supplemental Nutrition Program for Women, Infants and Children (WIC). It became illegitimate when the store stopped exchanging SNAP and WIC benefits for qualifying items. (Over two years, the store exchanged SNAP and WIC benefits for half the amount in cash. That is definitely against the program rules.) After paying the SNAP and WIC beneficiaries 50 percent of the value, the store then redeemed the government benefits in the full amount from the government.

The U.S. Department of Agriculture and Wisconsin’s Department of Health Services became suspicious of the store’s redemptions when it was discovered that the Quick N EZ made far more money on SNAP and WIC benefits than competitors of the same size in the Milwaukee area. The agencies conducted undercover buys at the store and confirmed their suspicions of fraud. It turns out that the store redeemed more than $1.2 million in benefits they did not deserve. (Ironically, the Quick N EZ claimed reimbursement for the sale of WIC food items that actually exceeded the store’s inventory of those items.)

The 67-year-old father, his 27-year-old daughter and the 59-year-old co-owner all pleaded guilty to SNAP fraud. The father, daughter and co-owner received prison sentences of 15, 20, and 18 months, respectively. The father and daughter must pay full restitution of $1,245,529.72. Apparently, they have both already forfeited tens of thousands of dollars to pay back the government. (Oh well. Easy come, easy go. Fraud isn’t so easy after all, is it?)

Today’s “Fraud of the Day” is based on an article entitled, Store owner sentenced to 15 months in prison for food stamp fraudposted on BizTimes.com on September 14, 2017.

One of three Milwaukee residents charged in a $1.2 million food stamp fraud scheme has been sentenced to 15 months in prison, according to federal court records.

Kanwar Gill was charged in November 2016 with three counts of wire fraud, each carrying a potential penalty of 20 years in prison and a $250,000 fine. He entered a guilty plea in May and federal sentencing guidelines called for 27 to 33 months in prison.

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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.