1,300% Excellence

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Have you ever been given the speech about exerting 100% effort? Maybe you heard it as you were walking onto the football field before a game, taking a breath before a long meeting or when you were 13 holes into the worst golf game of your life. Regardless of the occasion, striving for perfection means giving 100% effort at all times. According to a Harold-Tribune article, one Florida fraudster shocked investigators when his store seemed to be giving 1,300% effort in Supplemental Nutrition Assistance Program (SNAP) benefits.

We’ve all seen the work of over-achievers, tackling projects and exceeding expectations. (I like seeing agencies put 100% effort into fighting fraud!) But being an over-achieving can backfire if you’re a fraudster. A Sarasota convenience store owner discovered the danger in his successful ability to attract SNAP benefits to his store. The convenience store underwent a name change after starting participation in SNAP in August 2009; court documents reveal the store saw SNAP benefit redemptions in 1,300% excess of state and national averages. (Have you ever heard of being discreet?) How was one small convenient store able to see higher redemption percentages than medium-sized full grocers in the immediate area?

The investigation, led by U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations, the Internal Revenue Service (IRS) and local Sarasota police, brought an end to the fraud scam, which bilked $735,886 from taxpayers through food stamp/SNAP benefits fraud. Investigators discovered the store owner was exchanging cash for SNAP benefits, usually splitting the transaction down the middle. (So basically a legitimate SNAP Electronic Benefit Transfer (EBT) card holder gave the store owner $100 in SNAP benefits, the owner charged $100 on the EBT card then gave the man $50 back in cash.) Investigators saw a decline in the fraud that started in February 2010, after officials obtained and executed a search warrant in March 2012. The store owner pleaded guilty to charges for an ongoing food stamp fraud scheme worth hundreds of thousands of dollars.

It seems like over-achieving isn’t always the answer. In this case, over-achieving will may lead this fraudster straight to jail.

Source: Today’s ”Fraud of the Day” is based on an article titled, ”Man Pleads Guilty to Food Stamp Fraud,” published by Herald-Tribune on June 12, 2013.

The case was investigated by U.S. Immigration and Customs Enforcement’s Homeland Security Investigations, the Internal Revenue Service Criminal Investigation and the Sarasota Police Department.

The SNAP program, administered by U.S. Department of Agriculture, prohibits retail businesses from purchasing SNAP benefits in exchange for cash.

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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.