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Retailers Arrested for Food Stamp Fraud
BALTIMORE — A federal grand jury has indicted nine local retail food store owners here on federal charges of food stamp fraud, on the same day that a sweep in Detroit also netted nine individuals accused of similar crimes.
September 19, 2013
2 Min Read
BALTIMORE — A federal grand jury has indicted nine local retail food store owners here on federal charges of food stamp fraud, on the same day that a sweep in Detroit also netted nine individuals accused of similar crimes.
The indictments allege the Baltimore retailers received almost $7 million in federal payments for transactions in which they did not provide any food, a fraud scheme commonly known as “food stamp trafficking.” The stores allegedly split the proceeds with SNAP recipients, federal authorities said.
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Federal agents arrested the defendants and executed search warrants at the stores and related locations here Tuesday.
“Taxpayers fund the food stamp program to put food on the tables of needy recipients, not to put money in the pockets of greedy criminals,” U.S. Attorney Rod J. Rosenstein said in a statement. “Food producers and distributors benefit when food stamp funds are used to buy food, and honest storeowners work hard to earn a profit by actually selling food. People who play by the rules deserve to know that criminals who defraud them will be held accountable.”
The retailers owned or operated delis and small food stores in Baltimore. The indictments allege that the defendants typically paid half the value of the EBT benefits in cash. To avoid detection, they often debited the funds from the card in multiple transactions over a period of hours or days.
As a result of unlawful cash transactions, the defendants obtained more than $6,898,000 in EBT deposits for transactions in which the stores did not provide food. Defendants face up to 20 years in prison for each count of wire fraud.
In Detroit, nine individuals have been charged and six arrested on SNAP fraud charges during a two-day sweep of the city’s Eastern Terminal Market and other areas, according to U.S. Attorney Barbara L. McQuade.
As in Baltimore, the Detroit retailers are alleged to have been engaged in the illegal practice of exchanging cash for food stamp benefits. These transactions totaled “millions of dollars” during the past year, McQuade’s office said.
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