Robbing the Taxpayer, One Card Swipe at a Time

42658364 - hand is taking the shopping basket in the market

When you think of the Supplemental Nutrition Assistance Program (SNAP), what comes to mind? Maybe you think of someone who is struggling to get by and trying to buy food for his or her family. Or…perhaps you still remember the days before Electronic Benefit Transfer (EBT) cards when people paid for food with food stamps and the image of someone doling out food stamps to a cashier springs to mind. At any point, does the SNAP program make you think of a fast way to make easy money? Probably not – unless you are a fraudster. You guessed it…today’s Fraud of the Day from is about SNAP fraud.

The article reports that the defendant, a manager at a convenience store in North Carolina, traded EBT cards for cash and allowed EBT holders to buy unapproved items like cigarettes. (Cigarettes are not a food group.? The investigation found that customers ”would buy cigarettes or other low-priced items, and [she] would ring up the transactions and return cash to the customers.’? What was her incentive? She usually retained about ”40 cents of each benefit dollar.’? She also fraudulently caused the contractor handling the SNAP EBT transactions ”to wire thousands of dollars” to the convenience store ”from which she then made withdrawls for her personal use.’? (Of course, she did.)

Now, she’s going to prison (Maybe she can bum a cigarette off a cellie) for food stamp fraud and money laundering. A federal judge sentenced her to 27 months in prison and three years of supervised release. Plus, she owes the U.S. Food and Nutrition Service – the agency that oversees the SNAP program – $1 million in restitution. (Good? The taxpayers called, and they want their money back!)

In addition to discussing the defendant’s case, the article notes that SNAP is a $78 billion program, and that participation is at an all-time high. That means there are a lot of people out there who need the benefits the program has to offer. It also means that we have to find the fraudsters. If one defendant owes $1 million in restitution for her crimes, what is the total cost of fraud to the program?

Source: Today’s ”Fraud of the Day” is based on an article entitled, ”Thomasville Convenience Store Manager Sentenced for Food Stamp Fraud,” published by on April 25, 2012.

GREENSBORO | United States Attorney Ripley Rand announced Wednesday that Kongkeo Keomoungkhoun, also known as Kim Stukes, 45, was sentenced in federal court for food stamp fraud and money laundering.

United States District Judge William L. Osteen, Jr. sentenced Keomoungkhoun to 27 months imprisonment and three years of supervised release, according to a press release from the U.S. Department of Justice. Keomoungkhoun was also ordered to pay $1 million in restitution to U.S. Food and Nutrition Services, the agency responsible for oversight of the federally funded Supplemental Nutrition Assistance Program (SNAP, formerly known as food stamps).

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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.