Millions of dollars in food stamps used to purchase electronics and other non-food items

Friday, September 20, 2013 by: J. D. Heyes
Tags: food stamps, non-food purchases, fraud

(NaturalNews) Waste, fraud and abuse has always been a part of government programs, but it seems that, as more Americans take part in them, the waste, fraud and abuse is increasing.

Take the case of 49-year-old Muhammed Farooq of Somerset, N.J., the owner of the $4 stores in the northern part of the state. He has just admitted to authorities that he devised a scheme in which patrons were permitted to make more than $5 million in fraudulent food-stamp transactions.

Prosecutors in Essex County said Farooq has pleaded guilty to theft by deception and has agreed to give up $832,830 dollars that he had amassed through the fraud scheme. Now, he's facing up to seven years in state prison when he's sentenced in January.

Per My9NJ:

Authorities have said Farooq allowed patrons to use food stamps to buy nonfood items, such as electronics. They say the purchases totaled roughly $5.2 million and went on for nearly 2 1/2 years. Farooq owns two stores in Newark, one in East Orange and another in Elizabeth.

As more Americans get food stamps, fraud is increasing

Farooq's case, again, is just the most recent incident. There are scores of others:

-- In 2012, the Department of Agriculture's (USDA) inspector general told a House panel that some of the 46.3 million Americans currently enrolled in the federal food stamp program traded their benefits for cash so they could then purchase drugs and guns, among other contraband.

Phyllis Fong, in testimony before the House Governmental Oversight and Reform Committee, said food stamp recipients traded their Supplemental Nutrition Assistance Program (SNAP) benefits at a discount to corrupt merchants and retailers in exchange for cash.

"In terms of fraud, we have seen many types of trafficking in SNAP benefits. By giving a recipient $50 in cash for $100 in benefits, an unscrupulous retailer can make a significant profit; recipients, of course, are then able to spend the cash however they like," Fong said in prepared remarks. In some cases, she said, "recipients have exchanged benefits for drugs, weapons, and other contraband. When trafficking occurs unchecked, families do not receive the intended nutritional assistance, and unscrupulous retailers profit at the expense of the American public."

-- In August, we reported that despite the half a billion taxpayer dollars the federal government sends to impoverished Caribbean countries every year as foreign aid, it is apparently not enough to fulfill the needs and desires of the people who live there, many of whom are now indirectly taking advantage of the American food stamp program as well.

Apparently, thousands of New Yorkers living on welfare regularly send their food stamp-purchased groceries to family members and other loved ones living in countries like Jamaica and the Dominican Republic, where living conditions are generally poor. Large barrels filled with subsidized goods like rice, beans and sausage are routinely shipped to the Caribbean on the taxpayer's dime, which has caused considerable controversy.

"Welfare recipients are buying groceries with their Electronic Benefit Transfer (EBT) cards and packing them in giant barrels for the trip overseas," wrote Kate Briquelet and Isabel Vincent for the New York Post about this phenomenon. "The practice is so common that hundreds of 45- to 55-gallon cardboard and plastic barrels line the walls of supermarkets in almost every Caribbean corner of the city."

It happens a LOT at convenience stores

-- Much of the fraud is taking place through unscrupulous small business owners of convenience stores. Just this week, a Quincy, Mass., convenience store owner, Pat Lu, was convicted of collecting some $700,000 in fraudulent food stamps, and he'll spend 2? years in jail; and one of the owners of a Salt Lake City convenience store accused of illegally exchanging food stamps for cash has been sentenced to probation for his part in the scheme.

More Americans are now receiving food stamps than at any time in our history. And, given the lax oversight and qualification standards, it's no small wonder that the American taxpayer is being abused.

Sources:

http://www.my9nj.com

http://www.naturalnews.com

http://www.sfgate.com

http://www.patriotledger.com