Food stamp fraud costing taxpayers millions of dollars

Food stamp fraud is costing Americans millions in taxpayer money, and a joint investigation by the Scripps Howard News Service, Scripps Treasure Coast Newspapers and the Contact 5 Investigators  discovered weak federal regulations and oversight are allowing the fraud to often go unchecked in our community.

In our investigation of food stamp trafficking, we stopped at Trina's Food Mart on Avenue D in Fort Pierce. A sign on the store says it  accepts food stamps, and so did the man working behind the counter when a Contact 5 Investigator walked in with a hidden camera and asked him.

But  when I confronted him with a camera in plain sight days later, he wouldn't comment.

State records show this store is owned by Manzoorul Haq. The United States Department of Agriculture permanently disqualified his business from accepting food stamps in 2009 for trafficking.

It is the most common reason the Agriculture Department bans a store from the program. This is how the Agriculture Department says it works: A food stamp recipient walks in with their EBT card. It is like a debit card. They want to trade their benefits for cash or banned merchandise--like alcohol or tobacco. The store worker rings up the transaction at full price. Then they hand over some of the money to the food stamp recipient and pocket the rest.

The Agriculture Department estimated the taxpayer toll nationwide at $330 million in 2008, the latest numbers available.

The Contact 5 Investigators pored over the records. We learned this place was named Express Food Mart when it got slapped with the ban on accepting food stamps three years ago.

Now it is Trina's Food Mart, but it's same store on the same property and state records as late as last fall show the same owner of record in both cases is Manzoorul Haq.

The loopholes are obvious, says Michael Tanner, with the Cato Institute, a Washington D.C. think tank.

"It has not been a priority simply because in most cases it is more cost, effort, political pain, and potential blowback in the community than it's been worth to solve the problem," he said.

On Sapodilla Avenue in West Palm Beach is Family Grocery, which was disqualified twice by the Agriculture Department from the food stamp program. According to records, the same owner, Mohammed Nasif, has been permanently disqualified from the program.

A Contact Five Investigator walked in undercover and was told food stamps are still accepted here. But when I followed up later, I tried to speak with a man who said he was a relative of the owner. He wouldn't talk.

Later Mohammed Nasif called me back to say there was a misunderstanding involving an old partner.  He said he was unaware of the situation. He says he's a valid operator and that he's paying the price for an old partner.

The Agriculture Department told the Contact 5 Investigators it will be asking questions of Family Grocery, based on our inquiries, to determine if the store is breaking the rules.

In the past 5 years alone the Agriculture Department permanently disqualified 4,600 retailers from accepting food stamps, and 23 of those retailers are in the Palm Beaches and Treasure Coast.

The federal government estimates suggest 8 percent involved in the food stamp program are breaking the rules. All of which begs the question; how serious is the Agriculture Department about a crackdown.

"If it is a real priority, you don't have 100 inspectors, you have 1,000 inspectors. You believe their actions, not their words," Tanner

"The idea is that if you have a program filled with fraud, waste and abuse and you let that fraud, waste and abuse go on, it is not good for anybody, the recipients or the taxpayers,"

The Agriculture Department said, "rogue stores should be punished and prosecuted criminally where possible."


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