Food stamp fraud sting targets 27

[flashl]

Source: Detroit News

Dozens charged with ties to trafficking ring accused of over $1.5M in bogus transactions.

DETROIT -- Following a collaborative state investigation, 27 people associated with eight local stores are facing charges for alleged ties to food stamp trafficking totaling more than $1.5 million, Attorney General Mike Cox announced Tuesday.

...

The Attorney General's Office partnered with several entities, including the FBI, Michigan State Police, the U.S. Department of Agriculture and the state departments of Human Services and Treasury for the investigation, which continued for more than a year, Hills said.

The investigation involved undercover operations during which confidential informants and police officers were equipped with devices to record video and audio footage of the fraudulent transactions with the store owners and employees, officials said.

...

The Office of Inspector General, a criminal justice agency within the Michigan Department of Human Services, estimates about 4 percent of food stamp transactions are fraudulent -- totaling about $4.6 million monthly or $55.2 million annually. The office estimates food stamp fraud in Wayne County totals about $16 million each year.

"It's wasting taxpayers' money," Bugbee said.

Detroit News

Read more: http://www.detnews.com/apps/pbcs.dll/article?AID=/20080213/METRO/802130384/1409/METRO

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Detroit's taxpayers money at work, against them. I would think since 70% of Detroit's homeowner's are trapped in subprime mortgages they'll prefer that their law enforcement was spending time finding the predators of their subprime quagmire.

With over 70% of Detroit's homeowners in jeopardy of losing their homes, wonder who these law enforcement types think will be left as taxpayers.

[cutlassmama]

1. I don't really understand what it is they did.

[Gormy Cuss]

2. The article is not clear, but since the targets are people associated with grocery stores, it may be

cashing out food stamps for customers at a discount (say, giving the customer $50 for $100 worth of food stamp value) and then getting reimbursed for the face value. It sounds like too big a volume for the typical small time infractions like letting the customer use FS/EBT for paper goods or soap.

[Robbien]

3. Stores set up to service food stamp recipients

gamed the system and put through fraudulent food stamp vouchers for reimbursement for food not delivered to recipients.

It is the same as doctors who put through fraudulent medicaid vouchers for reimbursement for services not performed.

[cutlassmama]

16. If it is this, that is horrible. I can see maybe looking

the other way for Pampers, toilet paper or soap, but fraud like this is unacceptable. Same for cigarettes or liquor.

[fed-up]

4. creative accounting? why did it take a year's worth of investigating? what was that cost?

"Detective 1st Lt. Marty Bugbee, commander of the Michigan State Police criminal investigations section, explained that in some cases, a portion of funds on state-issued Bridge/Electronic Benefit Transfer debit cards were transferred from recipient to store accounts."

If 27 people were involved for over a year that works out to close to $4,000 a month per person. Since food stamps only give about $162 for an adult I am guessing that there was some major fraud involved in getting the food stamp cards in the first place. The article doesn't give enough detail, but there was recently a story in California about a family that got money for daycare children that were never actually in the daycare-in fact there were no kids in care and they claimed they ran a couple of daycares....

[flashl]

5. The hustle goes like this

Bridge Card holders take their cards -- perhaps with $200 in benefits -- to a store where the owner will pay them $100 in cash.

The store owner then swipes the card, which tells state computers to pay the store $200 for the groceries sold to the Bridge Card holders, even though nothing has been sold.

Meanwhile, the card holders have $100 to buy what they otherwise can't with a Bridge Card, such as drugs, liquor or lottery tickets.

Detroit Free Press

Although the reporter suggests that the recipients only purchased drugs, liquor or lottery tickets. From the vantage point of volunteer work, I observed individuals "cash in" their food stamps for pampers.

[noonwitch]

7. Yeah, and I've seen them use their bridge card to buy liquor

I gave a clerk a hard time about it, too. The EBT cards have cut down on the amount of fraud, but it still happens. They are at least supposed to ring up the liquor in a separate transaction and have the customer use cash to pay for it. Otherwise, they should decline the sale or risk losing their right to participate in the program.

IMHO diapers, cleaning supplies, toilet paper and sanitary napkins/tampons should be included as acceptable purchases for the EBT cards, but they aren't.

I used to get mad in the food stamp days when I worked at a store-cigarettes were about $1.50 a pack then. A mom would give each of her kids a $1 food stamp and send them in to buy a candy bar. Because you can only give coin change back for a $1 food stamp, she'd then gather all the change and come in and buy cigarettes. There was nothing I could do about it.

[flashl]

9. I hear ya. And, not promoting EBT abuse.

It just struck me as odd, so many agencies involved in this raid while corporate raiders have nearly picked Detroit clean.

[OKthatsIT]

10. BINGO....keep looking over there...while the whole damn country

is getting RAPED.

[happyslug]

12. Buying Liquor with food stamps can't occur in PA.

It is illegal to sell Liquor is food stores in PA. You have to buy Liquor at the local State Store (Which sells ONLY hard liquor and run by State Civil Service employees) or at a local "beer Distributor" that can sell nothing but Beer (by the case only), Pop and limited other items (i.e. Food Stamps are accepted for nothing being sold at the Beer Distributor is Food Stamp eligible). If you want a six pack you have to go to a Bar (But Bars can NOT sell hard liquor except by the drink). Beer Distributors and Bars are privately owned unlike the state stores, which are owned by the state.

[MidwestTransplant]

6. We must end food stamps because some people are apparently abusing them.

Freeper logic.

[Arctic Dave]

8. Exactly

I bet this will be all over fox noise channel as the new welfare queen driving Cadillacs spin. Just in time for elections.

[happyslug]

13. The Rural Republicans will oppose dropping Food Stamps

Even when the GOp controlled the House and Senate, Food stamps could NOT be touched. Food Stamps, unlike welfare and Social Security, came through the Agricultural committees of the HOuse and Senate NOT the Public Benefit Committee. The GOP head of the Committee OPPOSED welfare reform and refused to permit any attack on Food Stamps. Now as part of the Budget, Food Stamps were restricted (Using the budget bypassed the Agricultural committees, but you ended up with a law that ended each year and had to be re-passed with every budget). The net result as the underlaying law stayed the same, but was "repealed" for one year only every year. I have NOT checked it this year, but I suspect it has changed.

The big difference was how overpayment's of Food Stamps were handled. Prior to 1994, the law was clear, if the overpayment was do to the action of the Government, the Food Stamp recipient had to pay it back, but only if he or she wanted to (i.e. Overpayment do to no fault of the Recipient meant no requirement to pay the food stamps back). This rule was the Opposite of Welfare, where any overpayment had to be paid back no matter whose fault it was (i.e. if the Government gave you to much welfare, and it was the Government's fault, you still had to pay the Government back).

When it comes to Food Stamps the underlying statute is still the same, no obligations to pay back an overpayment if the Government was the cause of the Overpayment, but this had NOT been the law since 1994 do to the fact the annual budget changed this rule to be the same as for welfare EACH and EVERY year since 1994. The reason for this split is the RURAL GOP Congress people on the Committee OPPOSED changing the law. They view Food Stamps not only as assistance to the poor, but increase business for Rural Farmers for if the poor have no money, they buy less food. Thus any fraud in regards to Food Stamps will NOT lead to its abolishment for even rural Republicans want the Food Stamp Program.

[NMDemDist2]

11. a 96% rate of legitmate services rendered is pretty good IMO

but they'll make hay with the 4% scoundrels won't they?

[Wcross]

14. 16 million dollars in fraud for Wayne county alone?

I am sorry to disagree with you, the money spent to bust these business owners for defrauding tax payers is necessary. Why is this working against the people of Detroit? This fraud should be ignored because there is another fraud in the sub-prime loan industry?
Businesses who participate in the food stamp program should not use the program to defraud taxpayers. We (taxpayers) want our tax dollars used to benefit the poor, not enrich market owners taking advantage of people.
Think about how many other people could be helped with the annual fraud loss of 55 million every year in Michigan. Maybe if the loss wasn't as large there would be more money to spend on existing recipients so they could have a better diet or maybe include products that aren't allowed now.
I (as a taxpayer) want to see government go after businesses & business owners who exploit food stamp recipients and defraud us.

[flashl]

15. As stated earlier, I am not promoting abuse of EBT cards.

It just that a larger robbery, a corporate level robbery that is immeasurable, is going on in Detroit where nearly 70% of homes will go into foreclosure. Recently, thousands of Detroit homeowners sought help from Attorney General Mike Cox. He offered these taxpayers, in need of intervention, brochures at an information seminar.