On Wednesday, a major bust was made of a multi-million dollar food stamp fraud ring based in the Ohio counties of Butler and Hamilton.
19 search warrants were issued in order to allow federal, state, and local law enforcement agents to investigate homes and businesses at the climax of an 18-month effort by the Southern Ohio Task Force. 12 people were arrested.
U.S. Beef in Fairfield was searched, as well as the home of the company’s owners Scott Traum and Joey Lightcap Traum, according to WCPO. Butcher Shop Food Distributors was also searched; its owner is Joseph Gray.
The fraud ring cheated taxpayers out of an excess of $2 million from the Supplemental Nutritional Assistance Program (SNAP) for low-income residents, 40 percent of the total $5.3 million that SNAP lost in Ohio in 2014. SNAP has lost $173 million across the nation.
U.S. Secret Service Special Agent in Charge Mark Porter described the Southern Ohio Task Force as an electronic and financial crimes task force made up of about 60 federal, state, and local law enforcement agencies in Ohio. Agent Harold Torrens, of the Ohio Investigative Unit, explained, “We’ve had food stamp fraud happening with meat truck drivers that have been exchanging food stamp SNAP benefits for cash, drugs. This investigation has netted over approximately $2 million worth of fraud over the last 18 months.”
The method used in the scam involved the companies’ drivers selling meat and fish products door-to-door, while accepting SNAP cards for payment. But the amount registered on the SNAP card would exceed the value of the product, allowing the drivers to convert the excess funds into cash. According to WCPO, “Cards were commonly exchanged for ‘50 cents on the dollar’ and for drugs, including oxycodone and marijuana.”
The drivers would then run the cards through old carbon copy receipt machines, and the fraud perpetrators would “reload” the cards every month, continuing the scam. Data revealed to WCPO showed U.S. Beef employees made roughly 8,145 SNAP EBT transactions worth $1,124,108.08 between December of 2011 and May of 2015. WXIX reported $906,420 redeemed to accounts associated with U.S. Beef employees.
Investigations for food stamp fraud using the SNAP cards have triggered 8,259 prosecutions in the U.S. and 404 in Ohio.