The Secret about Secrets

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Fraudsters are always trying to find shortcuts to get around the law. And they usually end up conspiring with others to get the illegal job done. Such is the case for a convenience store owner in Florida who conspired with his store manager to defraud the government of $143,000 from electronic benefits transfer (EBT) cards.

The convenience store owner allowed his customers to use their EBT cards to purchase unallowable goods such as cigarettes, gas, alcohol and other unauthorized goods from his food mart. (The Supplemental Nutrition Assistance Program (SNAP) is pretty clear that these items are not allowed to be purchased with government funds.)

An undercover investigation by federal agents found that the illegal purchases were handled through the store manager. The scam, which occurred over a four-year period, involved customers leaving their EBT cards and PIN numbers with the store manager. The store would then periodically swipe the cards for bogus purchases. Cash wire transfers were made to the store from the government program, then the store paid customers 50 cents for every dollar spent at the food mart. (Apparently, the owner also used the cards to buy things for himself as well.)

Suspicious transactions ending in double zeros alerted the government that something may be amiss at the store. (Not many legitimate transactions end evenly. Most end with cents.) Two years into the scam, the store owner received a letter from SNAP officials warning that they had detected improprieties. (That would have been a good time to stop the fraudulent transactions.)

The former owner pleaded guilty to defrauding the federal food stamp program. The 49-year old faces up to 20 years in prison, a $250,000 fine and three years of probation. He may also be ordered to pay restitution of $142,780.50. As part of a plea agreement, the store manager who conspired with the owner will not be prosecuted. (How ”convenient.”)

Interestingly enough, the store remains open under the leadership of the former owner’s brother, but the food mart is no longer authorized to accept EBT cards. (Good move by the justice system.) While this former store owner and his accomplice tried to keep the illegal scam a secret, they left behind a trail of evidence that was indisputable. The secret about secrets is that someone always slips up.

Source: Today’s ”Fraud of the Day” is based on an article entitled, ”Former Convenience Store Owner Pleads Guilty to Food Stamp Fraud,” published by IndiaWest.com on February 14, 2017.

The former owner of a Blackshear, Fla., convenience store, Sureshbhai ”Sonny” Patel, pleaded guilty in federal court last month to defrauding the federal food stamp program.

Patel, 49, entered his plea Jan. 27 before Chief U.S. District Judge Lisa Godbey Wood to a single count of wire fraud of roughly $143,000.

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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.