Pocket Change

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The Food and Nutrition Service reports that the Supplemental Nutrition Assistance Program (SNAP) paid out more than $74.1 billion in benefits to approximately 46.5 million Americans in 2014. An article posted on Ohio.com states that a small SNAP-approved store owner is accused of defrauding the food stamp program of approximately $1 million.

Prosecutors assert that for more than two-and-a-half years, the small store owner received about $1.5 million in electronically transferred benefits through his company’s bank account. It also says that he allegedly kept a little over $1 million for himself after making a series of small ATM withdrawals.

According to court documents, he carried out the scam by running Electronic Benefit Transfer (EBT) cards for a little more than $100 per transaction and gave the customer about half to buy prohibited items including alcoholic beverages and cigarettes. (Under the SNAP program, beneficiaries can use their EBT cards to buy approved items such as bread, milk, cereal, fruits, vegetables and dairy products.)

He allegedly was caught in the act after a wired Ohio Department of Public Service investigator was sent in to examine the store owner’s jump in food sales from $9,000 to $100,000 a month. (This was suspicious because other stores in the area were not showing similar sales.)

The 45-year-old man, who has a pattern of corrupt activity, was charged with two counts of grand theft, two counts of telecommunications fraud and money laundering plus the illegal use of food stamps. (Did I mention that he was convicted of cocaine trafficking and previously spent three years in prison and paid a $5,000 fine?)

It is important to note the defendant is merely accused of these crimes; he is innocent until proven guilty and deserves his day in court. Even so, this case demonstrates the government takes allegations of benefits fraud very seriously. The downside is that honest and abiding taxpayers will continue to pick up fraudsters’ crimes as they pay for their time in prison. (It’s a given that the bill will amount to quite a bit more than pocket change.)

Source: Today’s ”Fraud of the Day” is based on an article titled, ”Man Running Small Akron Grocery Store Pocketed More than $1 Million in Food Stamp Scam, Prosecutors Say,” written by Ed Meyer and posted on Ohio.com on May 13, 2015.

Prosecutors told a Summit County jury Wednesday that a man operating a small Akron store on Andrus Street cheated the state and federal government out of more than $1 million in food stamp benefits after opening his business in 2009.

Over the next 2½ years, Johnnie Byrd III, who had a previous felony conviction from 2002, received about $1.5 million in electronically transferred benefits in his store bank account, and allegedly pocketed $1,018,120.70 in a series of small ATM withdrawals, prosecutors said.

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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.