Big or Small, This Hurts All


As of November 2017, the U.S. Department of Agriculture’s Supplemental Nutrition Assistance Program (SNAP) provided benefits to 41,658,868 individuals at an average cost of $127.73 per person. (Do the math and the total amount of food stamp benefits divvied out in November was $5.3 billion.) A Rock Hill, South Carolina woman, who masterminded a food stamp scam, stole more than $5 million from the government program over six years. (Let’s put it in perspective – that amounts to the monthly food stipend for about 39,145 individuals.)

One way that SNAP fraud occurs is when food stamp benefits are exchanged for cash. In today’s case, which is considered the largest case of food stamp fraud in South Carolina history, the mastermind of the crime conspired with her customers to exchange the SNAP benefits for unapproved items such as gas, cigarettes and beer

The mastermind of the crime is a 55-year-old female Chinese immigrant, who had assistance from her 23-year-old daughter and a 29-year-old male from Vietnam. (Together the trio stole about $90,000 per month in food stamp benefits through two stores in the Rock Hill, South Carolina area.) The Chinese woman was benefiting from the fraudulent scheme at her first store, when her male Vietnamese co-conspirator suggested she open another store to continue the illegal scam. (Apparently, the second store had mostly food stamp customers, and very little cash transactions.)

Suspicions were raised when investigators compared the food stamp transactions at the Chinese woman’s two stores with other similar stores in the state. The average South Carolina store handles about $1,200 in food stamp purchases a month. (That’s an $88,800 monthly difference. No wonder the state noticed something smelled rotten.)

The Chinese store owner pleaded guilty and was sentenced to two years in jail. The Vietnamese man pleaded guilty, telling the judge that he had done exactly what his employer had told him to do. (That’s it – point the finger at someone else. So much for taking responsibility.) He received one year and one day in jail for his part. The mastermind’s daughter received probation because she cooperated with the police and federal agents. (Smart girl.)

All three of the defendants previously faced up to five years in prison for the $5 million that they stole, but they each received much less time because they were helpful in the prosecution of food stamp recipients who also participated in the scheme. (Unfortunately, the article states that the $5 million is missing. However, the government seized the Chinese woman’s only assets worth $60,000. Perhaps the $5 million went to an overseas bank account, never to be seen again.) The Chinese woman and the Vietnamese man are responsible for paying back the $5 million in restitution over the rest of their lives. (I’m not holding my breath while waiting for that to happen.)

While $5 million may not sound like much money at first compared to the billions of dollars in SNAP benefits that are disbursed on a monthly basis, consider the fact that we’re talking about only one case of fraud here. (Unfortunately, no matter how big or small the amount stolen, it all adds up to hurt the government’s effort to help provide food to vulnerable people who are hungry.)

Source: Today’s “Fraud of the Day” is based on an article entitled, “Rock Hill trio organized ‘elaborate’ $5M food stamp fraud, called SC’s largest ever,” published by The Herald on February 7, 2018.

COLUMBIA – In what prosecutors said was the largest case of food stamp fraud in South Carolina history, a pair of Rock Hill immigrants who ran a $5 million scheme were sentenced to prison Wednesday. A third defendant was sentenced to probation.

The scheme cheated the federal government out of as much as $90,000 a month for years, prosecutors said. But the sentences, handed down in federal court in Columbia, were shortened because all three helped prosecute “poor people” who misused food stamps to buy gas, cigarettes and beer at a store that operated almost exclusively as a food stamp mill, 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.