Food Stamp Fraud at the Local Gas Station

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The Kingston Times reported that District Attorney, Holley Carnright, announced the indictment of gas station owner, Kanwarjit Singh, alleging that he and his clerks allowed customers to trade their food stamps for prohibited items like beer or cigarettes, or for cash, in exchange for a 100 percent markup. The article documented how the scam worked? ”the clerk would swipe the customer’s benefit card for $100, then open the register and hand them $100 in cash. The clerk would then ring up another $100 charge — the store’s fee for the transaction. The entire $200 would be reimbursed by taxpayers via the federally funded State Nutrition Assistance Program.” (FYI, the rules for food stamp card carriers include: First, only certain items, such as food can be purchased with this card, for example, and not other, prohibited items like beer and cigarettes. Second, the balance on the card cannot be traded for cash. Lastly, if you use all of the money on your card, you will have to pay the remaining balance due at the checkout with your own money.)

The article reports that from January 2010 to November 2010, there were allegedly at least $320,000 charges that officials believe to have been fraudulent. The gas station’s food stamp transaction records indicated that more than 120 customers had traded benefits for cash. Carnright secured a special appropriation of $25,000 from the county to hire an investigator to work full time tracking down and accumulating evidence against the alleged welfare cheats. Another $25,000 was contributed by the state. The investigative team spent eight months interviewing dozens of people who used food stamps at the gas station. (If tougher regulations and checks were happening in the first place, then this money and labor could be spent elsewhere in the community.)

According to the Kingston Times report, officials estimate that taxpayers will eventually recoup $767,000 from defendants. (The question is how long will it take for taxpayers to see this money again?? In addition, the DA expects that taxpayers will save $347,000 based on the removal of 120 people from the county’s population of food stamp recipients for at least one year. (That’s right…removing the cheaters from the rolls will result in taxpayer savings!)

Source: Today’s ”Fraud of the Day” is based on an article entitled, “DA slams `Food Stamp 50,”

by Jesse J. Smith, published by the Kingston Times, Oct 21, 2011

Twenty-two months after Kingston, New York police and county Department of Social Services investigators began looking into allegations of food-stamp fraud at a Midtown gas station, the hammer came down on former owner Kanwarjit Singh. On Monday, an Ulster County grand jury returned an 18-count indictment accusing him of turning the Sunoco Station on Broadway into food-stamp money laundering service for scores of recipients. So far, 50 recipients have been charged or have pending charges as a result of the probe.

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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.