June 20, 2014

54 defendants charged in $18 million food stamp fraud scheme- U.S. Attorney Edward Tarver announces charges in WIC and food stamp fraud

A federal indictment unsealed on Tuesday in Savannah charges 54 defendants in a massive, statewide scheme to defraud two federally funded nutrition programs — Women, Infants and Children (WIC) and the Supplemental Nutrition Assistance Program, better known as food stamps.

The indictment represents one of the largest federal food-supplement program frauds ever prosecuted, U.S. Attorney Edward J. Tarver said at an afternoon press conference.

The fraud involved the illegal purchase of more than $18 million in WIC vouchers and food stamp benefits intended for some of the nation’s neediest families and children.

Benefits were purchased for cash at discounted prices through a number of phoney grocery stores in Savannah, Garden City and other cities throughout the state, then reclaimed for the full amount. Recipients of the WIC and food stamp benefits are supposed to only use them for food, not sell them for cash.

Other cities involved included Macon, Atlanta, Marietta, Lithonia, LaGrange, Stone Mountain, Riverdale and elsewhere.

In addition to the 54 defendants accused of fraud, 34 others have been charged in separate indictments with selling their WIC vouchers and food stamp benefits or the benefits of minor children for more than $1,000 in cash.

Tarver called the fraud scheme “egregious.”

“The government alleges that the defendants stole taxpayer-funded benefits intended to feed the most needy families and children in our communities,” Tarver said.

First Assistant U.S. Attorney James Durham said 70 of the 88 individuals involved had been apprehended by Tuesday afternoon in what FBI Supervisory Senior Resident Agent Eugen Kowel said were actions that began “at the crack of dawn” and involved combined actions by federal and local law enforcement officers.

He called the action “an example of what we can accomplish in the law enforcement community when we work in partnership.”

According to the 34-page indictment, one of the fake stores was Super Kids Variety Store at 302 W. Victory Drive in Savannah, which was managed by defendant Henry “Grand Hustle” Ward, who also worked out of a second phoney store, Platinum Kids, at 612 Highway 80 West in Garden City.

The benefits in question were purchased between December 2009 and December 2012, the indictment charged.

Once the fake stores were opened and approved as WIC and Food Stamp vendors, many of the defendants allegedly canvassed low-income neighborhoods and solicited WIC and food stamp participants to illegally exchange their benefits not for food, but for cash, the government said.

Karen Citzen-Wilcox, special agent in charge of the U.S. Department of Agriculture Office of Inspector General, said the investigation and prosecution “should send a strong zero-tolerance message to those individuals who create businesses for the purpose of specifically defrauding the taxpayer” benefit programs.

Georgia’s New Plan To Arrest Welfare Abusers

As many know, the food stamps program is intended to help low income families afford food. Recently, however, more and more stories are coming to light revealing dishonesty and abuse of the system. It appears that when given the chance, many people tend to trade the food stamps for cash, and end up buying whatever they want. Such action is illegal.

Georgia authorities have discovered this new type of fraud, and 54 people were arrested for opening “grocery stores” that service welfare recipients. According to reports, food stamps were being traded in for cash at the store, for only a percentage of their actual value. 90 people were arrested for using the service to commit fraud.

Although there is currently no indication of legal penalties for committing welfare fraud, the first punishment that occurs for an offender is to lose funding. In that case, the person facing charges will not be able to obtain food stamps for a period of time, and could even be permanently banned for the program.