9 Investigates food stamp hustles

by: Daralene Jones Updated:

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ORANGE COUNTY, Fla. - The state of Florida continues to battle a growing problem of public assistance fraud.

The state projects that this year it will lose $19 million to fraud because a growing number of people are scamming taxpayers.

READ: Florida could cut off food stamps to more than 200,000

Channel 9 investigative reporter Daralene Jones tried to track down the owner of the Hay Meat Market in Ocala, who is named in arrest reports for her customers. Channel 9 decided not to name the owner at this time because she has not been formally charged.

Investigators with the U.S. Department of Agriculture, which administers the food stamp program, allege the store owner took taxpayers for $1.7 million.

Investigators said the owner allowed customers to exchange their food stamps for cash, at 50 cents on the dollar. Her alleged customers, Liteasha Johnson and Marcia Mason, were arrested last month on suspicion of felony welfare fraud. Both have since pleaded not guilty.

Jones tried to reach Johnson, with no luck. Jones also went to Mason's home; however, she slammed the door as Jones questioned her about whether she sold her food stamps for cash.

Arrest report records 9 Investigates obtained through the clerk of courts office showed Johnson called investigators and admitted to the crime, which can come with prison time, if she's found guilty.

New Florida Technology

The state implemented four years ago something known as the Customer Authentication and Identity Verification Tool  which relies on a series of questions during the online application process.

According to the Department of Children and Families, about 93 percent of food stamp assistance applications are received electronically. The state-of-the art technology was supposed to be used to help thwart fraud.

"It is taxpayer money that's being stolen," said Jack Heacock, director of public assistance fraud for the state Department of Financial Services.

Food Stamp Fraud Costs

Heacock told Jones food stamp fraud topped $12 million last year. There have already been 559 cases uncovered, in the first three months of this year, costing taxpayers $4.2 million.

“I think it's the online application. The ease of access to public assistance benefits, kind of encourages people to give it a shot," Heacock said.

Cases Rarely Prosecuted           

9 Investigates uncovered consequences in place to discourage cheating taxpayers of millions each year are hardly utilized. Records provided to 9 Investigates by state attorney's offices in Central Florida showed a majority of the cases aren't prosecuted and taken to trial.

Defendants are typically offered plea deals, and are sent through diversion programs or are given probation.

Public assistance fraud is a felony and can come with five years in prison. 9 Investigates found few cases in which that actually happened.

"People need to know they can go to jail for that. It's all dependent upon our state attorneys," Heacock said.

Eurick Fenot and Quinteria Williams could be the exception. They were arrested, last year, and pleaded not guilty to public assistance fraud, grand theft, identity theft and other charges.

Investigators said they filed nearly 800 food stamp applications using stolen identities. Their arrest affidavits showed the former owner of an Apopka grocery store exchanged the food stamps for cash and some transactions were caught on video.

The new owner told 9 Investigates he suspects something was happening. In the last eight months since the new owner took over, he said, customers have come in trying to trade in their food stamp cards for cash, even offering up their personal identification numbers.

Federal investigators with the USDA would not provide details on why the store owners still haven't been arrested, or confirm or deny an ongoing investigation.

DCF Responds

In a statement DCF told 9 Investigates “that since the Customer Authentication and Identity Verification Tool was implemented in 2013, the USDA Food and Nutrition Service (FNS) has required that we allow online applicants to opt-out of the CA/IV tool. Applicants that opt-out of this process still have to verify their identity with our eligibility staff. The DCF Office of Public Benefits Integrity has implemented additional measures to prevent fraud through this method.”

"The total cost avoidance savings (federal and state taxpayer funds not issued improperly due to fraud/potential fraud) for all benefit programs since implementation through SFY 2015/16 (2013 through July 2016) is $669.1M, a 670:1 return on investment.”

“For the first 6 months of 2016-17 (July - Dec 2016) 216,152 (11 percent) of total applications received (1,925,889) opted out of the ID verification quiz.

"Of the applicants that opted out, 80.5 percent were subsequently approved after determining eligibility and verifying their identity (over the phone or in person) and 19.5 percent were not approved (failed to verify their identity).”