Weathering the Fraud Storm

67

It never ceases to amaze me how many ways fraudsters capitalize on government benefits. (These fraudulent opportunists specialize in lining their pockets with additional cash they don’t deserve at the expense of their victims.) An article posted on CSPnet.com explains how convenience store co-owners took advantage of emergency food stamp funds intended to help out Hurricane Sandy victims in New York.

As a result of the devastating storm, the U.S. Department of Agriculture’s Food and Nutrition Service approved disaster nutrition assistance replacement benefits for survivors across 13 states, including New York. The agency made sure that Supplemental Nutrition Assistance Program (SNAP) beneficiaries living in disaster areas continued to have access to food in the wake of the natural disaster.

The story states that the husband and wife owners of a Long Island convenience store processed bogus SNAP transactions using emergency funds at their gas station and convenience store without selling any food. (Of course, it takes two to tango. Nearly two dozen beneficiaries sold their government benefits to the store owner in exchange for cash worth half of the SNAP benefits value.)The convenience store owners charged the USDA the full value of the food stamp benefits and kept the other 50 percent for themselves. (The article states that the man laundered the proceeds through a store bank account set up for state lottery sales.)

The 60-year-old husband pleaded guilty to grand larceny, money laundering, felony misuse of food stamps, falsifying business records and conspiracy. He is facing a prison sentence of between one and a third and four years in state prison. The 59-year-old wife pleaded guilty to grand larceny, falsifying business records, misuse of food stamps and conspiracy. She will be sentenced to 60 days in jail plus five years of probation. Their corporation will be dissolved. In addition, the co-owners are responsible for paying restitution of $566,011.49 to SNAP. (Twenty-two SNAP beneficiaries also pleaded guilty to their part in the scheme.)

Emergency benefits are specifically for emergencies, not for criminals who just want more money. The convenience store owners were responsible for diverting tens of thousands of dollars in benefits that were meant for those less fortunate. (My guess is that this couple probably understands that they are in the midst of a personal emergency that they caused. Unfortunately, they will have to weather out their fraudulent storm in jail.)

Source: Today’s ”Fraud of the Day” is based on an article titled, ”Long Island C-Store Owners Convicted of Food Stamp Fraud,” posted on CSPnet.com on January 14, 2015.

ALBANY, N.Y. — New York State Attorney General Eric T. Schneiderman, along with U.S. Department of Agriculture’s Office of Inspector General, announced the felony conviction of a Long Island convenience store operator who admitted to stealing more than $668,000 from the federal Supplemental Nutrition Assistance Program (SNAP).

Ravinder Parkash defrauded the USDA by illegally exchanging SNAP food stamp benefits for cash and submitting fraudulent transactions for payment at his Riverhead, N.Y., convenience store. Parkash pleaded guilty in Suffolk County Supreme Court before Justice John B. Collins. He faces up to four years in state prison. Also convicted for the scheme are his wife, Prabha Rani, who will receive a jail sentence, and their corporation, Shivani Enterprises Inc. The defendants must also pay restitution in the amount of $566,011.49 to SNAP.

Read More

SHARE
Previous articlePosthumous Fraud
Next articleA Matter of Status

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.