Crashing the Fraudster’s Free Ride

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Times are tough, and many rely on benefits from government programs like the Supplemental Nutrition Assistance Program (SNAP) to get by. Those who are eligible for SNAP, receive Electronic Benefit Transfer (EBT) cards loaded with funds to buy groceries. This system relies on both the program beneficiary and the grocery store to be honest – and that is not always the case, as today’s fraud from shows us. Some stores are looking for a free ride, courtesy of the American taxpayer.

The article focuses on how stores are scamming the taxpayer by trading EBT cards for cash. Here’s how the fraud is perpetrated? ”an EBT card is swiped, say for $100 in groceries, but, there are no groceries. The store keeps $50 and the cardholder gets $50 – and all of it is your tax money.’? According to the article, ”the USDA says any store caught cheating is kicked out of the SNAP program permanently.’? noted that 24 stores in the Phoenix area had been ”permanently kicked out of the SNAP program in the last five years.”

But fraudsters are pretty good at finding loopholes. The article says ”a store can be let back in the program if there is a change in ownership” and raised questions about whether one store, in particular, was gaming the system. In the example, the store was kicked out of the program for fraud, but the current owner said ”he did not own the store at the time. He says his L.L.C. bought it after that date.’? (This is a nice way to dodge the law? My new company, Scamthetaxpayer Corp. now owns it, not me; so, I can take EBT cards, and do it all over again.? found that Phoenix city records tell a different story? the owner was at the same address at the time of the fraud that he is now. (That’s not at all suspicious.)

Should this particular store be investigated further? You decide. But one thing is clear? we must remain vigilant in the fight against fraud and continue to find loopholes leveraged by fraudsters. If not, the American taxpayer and those truly in need will wind up paying for a fraudster’s free ride.

Source: Today’s ”Fraud of the Day” is based on an article entitled, ”Valley Stores Caught Cheating Government Food Stamp System,” written by Joe Ducey and published by on February 20, 2012.

PHOENIX – Many Arizona families rely on the government food stamp program to help make ends meet.

In fact, one in six Arizonans are now getting the government assistance, including many who never thought they would need help.

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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.