The Game of Fraud


According to a recent article in The Baltimore Sun, food stamp fraud is big business in the Baltimore area. Unfortunately for the criminals participating in the wide-spread food stamp fraud scheme, law enforcement is ahead of their game. The article details the story of 10 convenience store owners now required to face up to their part in bilking the Supplemental Nutrition Assistance Program (SNAP) of millions of dollars in benefit assistance.

One of the most popular types of food stamp fraud is a 50-50 split between food stamp beneficiaries and merchants. Instead of providing food, the merchant exchanges cash for the benefits and keeps half of the proceeds.

The article reports that the first two criminals to be sentenced for their part in the scheme are two Korean citizens. (Strike one for participating in food stamp fraud.) The son and mother duo did not have legal immigration status. (In a town where baseball is big, this counts as strike two.)

The story states that the son and mom team exchanged approximately $25,000 to $30,000 of food stamp benefits per day over approximately 50 transactions. (Each customer would typically spend between $500 and $600 per visit – a possible red flag that may have alerted investigators of wrong-doing.)

The 40-year-old man was sentenced to three-years and two months in prison plus three years of supervised release. His 67-year-old mother was sentenced to a year-and-a-half in prison. (Mom, you should have known better.) They were both ordered to each forfeit more than $371,000 and pay $1.4 million in restitution. Since the two were not legal immigrants, they have agreed not to object to any proceedings following the completion of their prison sentence. (A possible strike three if the judge decides the deceptive duo should be deported.)

Eight other convenience store owners are awaiting sentencing for their part in the scheme. While it remains to be seen if the son and mom duo will get a third strike for their crimes against SNAP, one thing is for sure – law enforcement authorities hit a home run. (Let’s hope that the judge makes the right call in this situation.) The final score: Baltimore 10, Criminals 0.

Source: Today’s ”Fraud of the Day” is based on an article titled, ”Sentencing Begins in Convenience Store Food Stamp Fraud Cases,” written by Carrie Wells and published by The Baltimore Sun on February 22, 2014.

Two Korean citizens have been sentenced to prison for their roles in a food stamp fraud scheme and may face deportation, the U.S. Attorney in Baltimore announced this week.

The cases were part of a food stamp fraud sting that implicated 10 convenience store owners in the Baltimore area in September. Authorities said the defendants, eight of whom have pleaded guilty to food stamp fraud or wire fraud so far, would illegally redeem food stamps in exchange for cash.

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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.