Recipe for Disaster

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One of the most common forms of food stamp fraud usually involves an authorized retailer purchasing electronic benefit transfer (EBT) debit cards for about 50 cents on the dollar. An owner of a Chinatown bakery in Boston, Massachusetts cooked up a Supplemental Nutrition Assistance Program (SNAP) fraud scheme in a similar manner. (Let’s just say he was doing more than just serving up dumplings and pastries at his storefront.)

The bakery owner and his employees paid cash to purchase legitimate SNAP benefits for half their value. (Paying cash would be harder to track, or that’s probably what the store owner thought.) SNAP beneficiaries could then use the cash to purchase items that would normally not be allowed under the government program.

It’s important to note that neither the bakery, nor the owner was authorized to accept SNAP benefits as a payment for bakery items. But, the store owner used the full amount on the EBT card to buy goods and earn credits at other stores authorized to accept SNAP EBT cards. (I guess he wanted his cake and he wanted to eat it too.)

Over the two-year course of the conspiracy, the store owner redeemed $747,134 in SNAP funds. (Perhaps the store owner bought ingredients to make his products. If so, he probably enjoyed a really nice profit margin since the government was footing the bill.)

The bakery owner pleaded guilty to Supplemental Nutrition Assistance Program (SNAP) fraud. He was sentenced to one year and one day in federal prison. (Where the food will be much less desirable than he could ever imagine.) He must also pay back nearly $750,000 in restitution.

This Boston bakery owner’s recipe for fraud was a disaster. (It was like watching a soufflé’s crown collapse.) Perhaps this fraudster will get lucky and he’ll get assigned to kitchen duty while serving out his time. (Maybe he can learn from his mistakes and add a little flavor to the normal prison food fare at the same time.)

Today’s “Fraud of the Day” is based on an article entitled, Chinatown bakery owner sentenced to prison for food stamp fraud,” published by The Boston Globe on April 25, 2018.

The owner of a Chinatown bakery was sentenced Tuesday for food stamp fraud and ordered to pay back nearly $750,000 in restitution, prosecutors said.

Xi Xian Lei, the owner of Meisum Bakery, was given one year and one day in federal prison, and one year of supervised release, according to a statement from the US Attorney’s office. In addition, Meisum Bakery Inc. was sentenced to a year of probation.

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Larry Benson, Senior Director of Strategic Alliances, LexisNexis Risk Solutions - Government

Larry Benson is responsible for developing strategic partnerships and solutions for the government vertical. His expertise focuses on how government programs are defrauded by criminal groups, and the approaches necessary to prevent them from succeeding.

Mr. Benson has 30 years of experience in sales and business development. Before joining LexisNexis® Risk Solutions, he spent 12 years founding and managing two software technology startups. During the 1990s he spent 10 years as a Regional Director helping to grow a New England-based technology company from 300 employees to 7,000. He started his career with Martin Marietta Aerospace working on laser guided weapons and day/night vision systems.

A sought-after speaker and accomplished writer, Mr. Benson is the principal author of “Fraud of the Day,” a website dedicated to educating government officials about how criminals are defrauding government programs. He has co-authored WTF? Where’s the Fraud? How to Unmask and Stop Identity Fraud’s Drain on Our Government, and Data Personified, How Fraud is Changing the Meaning of Identity.

Benson holds a Bachelor of Science in Physics from Albright College, and earned two graduate degrees – a Master of Business Administration from Florida Institute of Technology, and a Master of Science in Engineering from Lehigh University.