Who needs to stock the shelves with groceries when you can engage in SNAP fraud instead? James Peabody and his co-conspirators Saybah Keihn and Margretta Jabbeh opened a handful of small convenience stores but the “convenience” to only commit SNAP fraud without ever having a customer walk in the door. Seems impossible to do without bread and milk, and rather alcohol and cigarettes. But these three were able to empty the SNAP accounts of more than 3,000 victims in Texas and eight other states using stolen data and. All from an empty grocery store.
Peabody, Keihn, and Jabbeh first established three grocery stores with SNAP merchant privileges. They didn’t open the doors because they had no groceries to sell. They next obtained electronic benefit transfer (EBT) cards with stolen SNAP account information which they stole by placing “skimming” machines at point-of-sale terminals in stores throughout the country. A fun road trip! Using the EBT cards programmed with stolen information, the trio made fraudulent purchases at their own stores, falsely representing to the USDA that legitimate SNPA beneficiaries were buying groceries. In reality, no groceries were actually purchased as there were no groceries to be bought.ne to be bought. As a result of their actions, the USDA unknowingly deposited over $2.6 million into the stores’ bank accounts.
There is good news for the beneficiaries. In 2022, Congress passed a law that requires state agencies to replace up to two months-worth of SNAP benefits stolen by card skimming. According to USDA data, Texas has replaced $1.7 million SNAP benefits stolen from nearly 3,200 Texas households who are in need.
However, there is bad news too. In 2022, Congress passed a law that requires state agencies to replace up to two months-worth of SNAP benefits stolen by card skimming without any changes at all to the SNAP infrastructure. So, SNAP fraud will go on as normal and taking taxpayers money with it.
Today’s Fraud of The Day is based on article “Liberian Man, 34, Sentenced to 20-Yrs for $2.6M Fraud in U.S.” published by the Daily Observer on March 25, 2024
James Peabody, a Liberian man based in the United States, has been sentenced to 20 years in prison for orchestrating a scheme that stole $2.6 million in Supplemental Nutrition Assistance Program (SNAP) benefits from needy and disabled beneficiaries.
Peabody, 34, admitted to defrauding thousands of people via a scam involving food stamps.
He pleaded guilty in August to conspiracy to commit wire fraud and was sentenced on Tuesday, officials say. The judge presiding over the case called the crime “one of the most disturbing schemes” he’d seen during his time on the bench.
