Stealing from Babies

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Mother with son shopping in a delicatessen store, being helped by smiling cashier.

It’s hard to imagine how people can steal food from the mouths of disadvantaged babies and their mothers, but it happens.

The U.S. Department of Agriculture’s Special Supplemental Nutrition Assistance Program, or SNAP, for Women, Infants and Children, also known as WIC, is a $6.3 billion program designed to supply nutrition to pregnant women, mothers and children younger than five who are at risk for malnutrition. When people defraud the program, they keep government-subsidized nutrition out of the mouths of babies – literally.

Today’s SNAP fraud case happened recently in Atlanta where three people were convicted in December of multiple counts each of fraud and conspiracy surrounding the distribution of WIC vouchers. The three defendants – a brother, sister, and sister-in-law – own and operate an Atlanta pharmacy where they were found to have bought the food vouchers from recipients, and then sought reimbursement from the government at a higher dollar amount, without actually providing food to the recipients. (Where is the compassion?)

The pharmacy was an authorized vendor of the program since 2005 and received training on WIC rules, including the prohibition on buying vouchers. Yet, from at least 2009 to 2013, the three bought WIC vouchers from low-income mothers for a fraction of their face value without providing food or infant formula.

After purchasing the vouchers, the defendants deposited them into their bank accounts and sought reimbursement from the government. The fraud amounts to tens of thousands of WIC vouchers that resulted in $6.5 million in reimbursements, which far surpassed the WIC redemptions from much larger, nearby stores. Despite the massive amount of WIC redemptions, Poly-Plex Pharmacy had less than $1.3 million in actual expenses for food and infant formula during the same time frame. (So, these fraudsters banked over $5 million in profits, which they are likely to have to repay.)

The jury convicted the defendants of wire fraud conspiracy and 12 counts each of wire fraud, theft of government funds, and WIC fraud. The three, who range in age from 52 to 57, have not been sentenced.

Today’s Fraud of the Day comes from a U.S. Department of Justice press release, “Atlanta pharmacy operators convicted of more than $4 million fraud,” released Dec. 12, 2019.

Three defendants who own and operate an Atlanta pharmacy have been convicted by a jury of a multi-million dollar fraud scheme that targeted the U.S. Department of Agriculture’s Special Supplemental Nutrition Program for Women, Infants, and Children (“WIC”) program.   Each defendant was convicted of conspiracy and multiple fraud counts for buying WIC vouchers from low-income recipients and then fraudulently seeking reimbursement from the federal government at a higher dollar amount as if they had actually provided nutritious food to those recipients.

“The defendants bought vouchers from low-income recipients and sought refunds from the federal government at a significant profit instead of providing the nutritious foods to infants and children listed on the vouchers,” said U.S. Attorney Byung J. “BJay” Pak. “The defendants’ scheme lined their pockets at the expense of federal taxpayers and the low-income women and children who stood to benefit from the program.”

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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.