Wigging Out

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The U.S. Department of Agriculture’s Food and Nutrition Service has specific parameters that retail stores must meet to participate in the Supplemental Nutrition Assistance Program (SNAP). In general, an approved retail establishment must sell food for home preparation and consumption, meeting specific criteria. Although a Covington, Kentucky convenience store named A&E Fashions and Beauty Supply was an authorized food stamp retail store, the owner committed SNAP fraud by illegally conducting Electronic Benefit Transfer (EBT) transactions through her establishment, draining the program of more than $400,000 she did not deserve.

Retailers can redeem food stamp benefits for eligible items such as: breads, cereals, fruits and vegetables, meats, fish, poultry, dairy products, seeds and plants. The fashion and beauty supply store sold items such as wigs, makeup, T-shirts, beer and snacks. (How did the convenience store became an authorized food stamp retailer in the first place? None of those items appear to be on the “approved” list.)

Over about three-and-a-half years, the beauty supply store owner purchased food stamp benefits from eligible beneficiaries by paying customers for half of the value on their EBT cards. Then, she would redeem the benefits by completing transactions at her store. (The sale would trigger a reimbursement to the store owner’s business bank account.)

She also used the EBT cards to purchase personal items or inventory for her store at other approved retail stores such as Kroger and Sam’s Club. (How nice of her to use $408,979.76 in government funds to buy stuff for herself and stock her store. I bet officials within SNAP flipped their wigs when they discovered her crime.)

The 49-year-old was found guilty by federal jury of conspiracy to commit SNAP fraud and money laundering for transferring food stamp fraud proceeds through her financial institution. She was sentenced to five-and-a-half years in prison and by law, must serve 85 percent of her prison sentence before being placed on three years of probation. (Perhaps they should also make her work at a food bank and serve underprivileged people in that way.)

Who knows if the fashion and beauty store owner wigged out when her sentence was delivered, but when she begins to serve out her time behind bars, she’ll have to leave all of her government-funded beauty items behind. (There’s nothing beautiful about going to jail. She’s going to have to adjust to having many bad hair days ahead of her.)

Today’s “Fraud of the Day” is based on an article entitled, Covington business owner sentenced to 66 months for food stamp fraud schemeposted on WCPO.com.

COVINGTON, Ky. – An Edgewood woman, who was found guilty by a federal jury in January 2017, was sentenced Thursday to 66 months in prison.

U.S. District Court Judge David L. Bunning sentenced 49-year-old Phyllis Tyler for conspiracy to commit food stamp fraud, food stamp fraud and four counts of money laundering.

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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.