You’ve heard of drug dealers and arms dealers, but what about food stamp dealers? It’s hard to imagine that shady exchange in the alley being over something as innocuous as an Electronic Benefit Transfer (EBT) card, but that’s not far from the truth in this story from Dayton, Ohio. According to the Dayton Daily News, a federal grand jury there recently indicted a handful of residents on 46 counts of federal crimes in connection with a case where authorities allege that the defendants defrauded the Supplemental Nutrition Assistance Program (SNAP) of $3.8 million over a 28-month period. (Now that’s a lot of food.)
The article reports that the defendants allegedly exchanged or redeemed SNAP aka food stamp benefits over 1,000 times from EBT cards for cash or ineligible items, such as alcohol, tobacco, and clothing. Additionally, ”the indictment charges that more than $1.2 million of that money was withdrawn from the accounts in ways meant to evade federal currency transaction reporting requirements.’? (So they thought that by hiding $1.2 million that the other $2.6 million would go unnoticed?? Authorities seized their bank accounts, but were only able to recover a small portion of the money stolen from taxpayers. (Pay and chase.)
Here, investigators worked diligently for over 19 months building a case against the defendants. Still, this scheme is not new. So, it seems like we should be able to learn from this and related cases of food stamp fraud. With that, my question for the day is? what can we do to detect fraud earlier in the process?
Source: Today’s ”Fraud of the Day” is based on an article entitled, ”Business owner accused in food stamp scam indicted on 46 counts,” by Cornelius Frolik and published in the ”Dayton Daily News” on March 23, 2012.
A Dayton View business owner and three of his associates have been indicted on 46 counts of federal crimes for allegedly conspiring to defraud the federal government’s food stamp program of $3.8 million and laundering money.
According an indictment unsealed Thursday, a federal grand jury on Tuesday indicted Dayton area residents Al-Idu Al-Gaheem, 62, Abdul Qadir, 63, Abdul Yamini Sr., 70, and Omar Yahya, 55, on federal charges ranging from wire fraud to money laundering to illegal structuring of transactions.