In the Business of Food (Stamps)

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The Supplemental Nutrition Assistance Program (SNAP), also known as food stamps, exists for one reason? to help those in need afford the ever-rising price of groceries. And who needs help affording groceries more than grocery stores themselves? At least that was the theory behind the fraud allegedly committed by Elsa Kwong, owner of the Seattle Chinese Herb & Grocery store in today’s article from KING5.com. Fortunately, the theory didn’t pass muster with federal investigators, who raided the store last year, uncovering a massive SNAP fraud scheme exceeding $1 million.

Kwong pled guilty in March for defrauding SNAP and was just sentenced this December. She’ll now serve 21 months in prison (hopefully not running the prison canteen, that shouldn’t accept SNAP EBT cards), followed by three years on supervised release. In addition, she’ll have to pay $1.5 million in restitution (assuming she has it), forfeit two vehicles (criminals love nice cars) and pay a $170,000 fine (blood from a stone). The stiff sentence should hopefully serve as a warning to business owners that federal programs are not a substitute for lackluster profits, and should awaken investigators to the fact that fraud is being committed not just by individuals, but corporations.

The U.S. Attorney for the case, Jenny A. Durkan, said it best: ”At a time when federal programs such as food stamps are stretched thin meeting real needs, this type of fraud rips the fabric of our safety net.”

Source: Today’s ”Fraud of the Day” is based on an article entitled, ”Seattle business owner sentenced for food stamp fraud” by KING5.com, December 12, 2011.

SEATTLE – The owner of a Seattle grocery store was sentenced Monday to 21 months in prison for food stamp fraud, a case profiled by the KING 5 Investigators.

Elsa Kwong, 46, pleaded guilty in March to defrauding the food stamp program.

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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.