7/16/2011 12:53:00 PM
Eighteen indicted in $700,000 food stamp fraud case
PHOENIX — Indictments have been returned against 18 individuals, including four merchants, involved in defrauding the government of about $700,000 in food stamp benefits.
The charges, announced Thursday by state officials, involve a scheme where legitimate food stamp recipients were selling their electronic benefit cards for cash, mostly to retailers. The buyers would give the sellers one half the value on the card and pocket the balance.
Three of the stores involved are in Phoenix, with one in Mesa. State officials declined to identify any of those involved the investigation is ongoing.
a typical action would involve a food stamp recipient going to a store and buying a small amount of eligible groceries, handing the merchant the debit card that is now used instead of the old “food stamp’ coupons.
But the retailer would deduct the full balance on the card, giving the recipient half of that, with the other half being credited to the retailer’s account.
http://verdenews.com/main.asp?SectionID=1&SubSectionID=1&ArticleID=42932
I’ve seen this happen with my own eyes, at more than one Convenient store located near a casino.