11/20/11, "The $65billion food stamp swindle: Stores accused of trading welfare credits for cash," AP, via UK Daily Mail
"A criminal swindle of the nation's $64.7 billion food stamp program is playing out at small neighborhood stores around the country, where thousands of retailers are suspected of trading deals with customers,
- exchanging lesser amounts of cash for their stamps.
Authorities say the stamps are then redeemed as usual by the unscrupulous merchants at face value, netting them huge profits and diverting as much as $330 million in taxpayer funds a year....
The USDA last month awarded a 10-year contract worth up to $25 million to Fairfax, Virginia-based SRA International Inc., to step up the technology used to combat fraud....
The fraud is almost always found among the 199,000 smaller stores that process 15 per cent of the nation's total food stamp transactions, (USDA official) Mr Concannon said.
In Providence, Rhode Island, for example, federal prosecutors in August charged former 7-Eleven franchisee Syed Shah, 43, with conspiracy for letting customers turn in their stamps for lesser amounts of cash and purchase items like soap, over-the-counter medication and laundry detergent that are not allowed under USDA rules, court records show.
Federal agents began investigating Shah's store in July 2008.
Agents said the practice brought an increase in sales.
Christopher Robinson, a USDA special agent, said Shah 'believed that if they did not give customers cash for the food stamp benefits then they would lose that business.'...
The modern food stamp programme was created in 1977 to help low-income families.
Benefits are loaded on to plastic debit cards that can only be redeemed at authorized stores.
More than 45 million people were receiving benefits as of August, according to program figures, nearly half of them children.
Nationwide, 234,000 stores are authorized to accept food stamps, including 35,000 supermarkets where 85 per cent of benefits are redeemed, Mr Concannon said....
Investigators said redemptions at Shah's store skyrocketed from $228,000 in 2008 to nearly $1 million last year and far exceeded that of other 7-Eleven stores.
Shah told Robinson there was a system for arranging the deals.
'If a customer was very loyal, and used his store on a regular basis, then they would charge these customers less to provide them with cash back for their food stamps,' Robinson said.
The affidavit did not disclose how much investigators believe Shah fraudulently pocketed in benefits....
Earlier this year, two brothers from Somalia were each sentenced to five years in federal prison after investigators found their small convenience store in Wyoming, Mich. trafficked about $400,000 in benefits for food stamps and Women, Infants and Children benefits over four years, according to USDA inspectors.
Investigators also found the brothers conspired with another retailer in Ypsilanti, Mich., to move more than $300,000 illegally to the Middle East and Africa through an unlicensed money system.
The fraud has even touched the restaurants, where several states have set up programmes to let food stamp recipients buy hot meals.
A California restaurant owner was sentenced in February to more than three years in federal prison for skimming $1.3 million in food stamp benefits by depleting electronic benefit transfer cards of their balances — one cent at a time, according to investigators."...
US Food Stamp usage, darker color equals heavier use, map from UK Daily Mail
"FOOD STAMPS BY THE NUMBERS
"One in 15 people in America is now living in poverty with almost 15 per cent of the population now on food stamps.
The ranks of the poor applying for food stamps increased by a worrying 8.1 per cent over the past year
- to make a total of 45.8 million.
About 20.5 million Americans, or 6.7 per cent of the U.S. population, make up the poorest poor, defined as those at 50 per cent or less of the official poverty level.
Those living in deep poverty represent nearly half of the 46.2 million people scraping by below the poverty line. In 2010, the poorest poor meant an income of $5,570 or less for an individual and $11,157 for a family of four.
That 6.7 per cent share is the highest in the 35 years that the Census Bureau has maintained such records, surpassing previous highs in 2009 and 1993 of just over 6 percent."
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