Once upon a time, when food stamps were actual paper funny money, it was relatively easy to find someone who would give you cash for your food stamps so you could buy cigarettes, booze or even diapers. Of course you would lose 25-50% of the value on the transaction, but hey, that was the price of doing business.
The other common “scam” was more or less legal. If you lived in an urban area and you needed a small amount of cash, for a pack of cigs for instance, you took your food stamps and went from store to store, buying a pack of gum and getting hard cash for change. You did this until you had enough change for what you needed.
Then the food stamp program went electronic, to prevent this type of abuse. Now food stamp benefits, called SNAP for Supplemental Nutrition Assistance Program, are loaded into an EBT card (short for Electronic Benefits Transfer) that is restricted to purchase only eligible food. There is no cash involved, no ability to use the card for non-food purchases, and the benefits don’t get lost in the mail.
Well, one inspired mini-mart operator in Quincy, Massachusetts figured out how to scam the system. Pat Lu, 48, has pleaded not guilty to conspiracy and fraud after police raided his mini-mart and said he was personally skimming $30,000 per month from the food-stamp debit card system. Bail was set at $100,000.
Lu was allegedly the brains behind the fraud that netted $700,000 in the past year and a half.
Police said customers would come into Lu’s store with their EBT cards. Lu would swipe the card, process a phony sale for the value on the card, give the customer 50 cents on the dollar in cash, and pocket the rest.
“The word was on the street, so to speak, that you could come to this store and cash in an EBT card,” Massachusetts Attorney General Martha Coakley told the Patriot-Ledger.
Boston Police Commissioner Ed Davis said there were 31 arrests in Boston on Thursday, though police refused to disclose the locations. Another 21 people have been charged with redeeming their food stamp benefits fraudulently.