Following the Fraud Crowd

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In this rear view, an unrecognizable woman stands with a shopping cart in front of a shelf full of food in the bread aisle of a grocery store.

One of the most common food stamp fraud schemes involves retailers who conduct fraudulent transactions with food stamp beneficiaries through their electronic benefit transfer (EBT) cards. A Jacksonville, Florida couple followed the food stamp fraud crowd and masterminded a $257,000 scam through two convenience stores they owned in the area.

It wasn’t long after the two convenience store owners received approval to participate in the Supplemental Nutrition Assistance Program (SNAP) as a retailer that they began training their employees how to carry out fraudulent transactions using their customers’ EBTs.  (The convenience store owners used their approval to participate in SNAP as an approval to defraud.)

 Over 27 months, the store owners instructed their employees to carry out fraudulent transactions, making it appear that the food stamp beneficiaries were buying eligible food products. The employees gave the food stamp recipients around 50 percent of the benefits spent on the fraudulent transactions and kept the remaining amount for the store owners, which totaled $257,979. (I’m guessing that the employees who took part in the fraudulent scheme also got a small cut of the money they raked in.)

The 62-year-old husband and his 65-year-old wife from Jacksonville both pleaded guilty to running a food stamp fraud scheme through their two Jacksonville store locations. They are facing a maximum prison sentence of 20 years and restitution. Eleven employees, who have also pleaded guilty to food stamp fraud, have already been sentenced to supervised release and must pay back $218,629.67. (Well, you know what they say about those who follow the fraud crowd…they eventually end up in prison.)

Today’s “Fraud of the Day” is based on an article, “Jacksonville convenience store owners plead guilty in food stamp scam, published by The Florida Times – Union on August 9, 2019.

A Jacksonville couple who own two convenience stores pleaded guilty to conspiracy to commit wire fraud in a $257,000 food stamp scam.

Russell Leroy Dotson Jr., 62, and Maria Luisa Dotson, 65, each face a maximum penalty of 20 years in federal prison and payment of restitution to the United States.

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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.