9 Investigates food stamp fraud

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ORLANDO, Fla. - 9 Investigates discovered how easy it is for people to use their food stamp cards to get cash so they can buy cigarettes, alcohol or anything else.

Channel 9's Vanessa Welch went undercover to catch the abuse happening on camera.

Using a hidden camera, 9 Investigates followed a man into the Lucky Food Store on Silver Star Road in Ocoee and watched him get cash for his food stamp card.

He spoke to the cashier, entered his PIN number and soon walked out with $20 in his hands.   

“It was easy,” he said moments after the transaction.

The receipt shows the clerk debited $36.39 from his food stamps account. The man told Welch that when the cash runs out he will do the same thing again.  

Welch went back to the Lucky Food Store to confront the clerk. She told him she had him on video giving a man cash for his food stamp card, but the clerk told her it wasn’t him.

“Is anybody giving people cash for food stamp cards at this store?” Welch asked.

“Not that I know of,” he responded.

Pastor Scott Billue said he is dumbfounded that state authorities are not doing more to stop the apparent abuse of the system, a violation of federal law.

Billue, who runs Matthew’s Hope, a homeless ministry, said he grew tired of seeing his clients sell their food stamp cards for cash to buy cigarettes, alcohol and drugs.

He said two years ago he alerted the state Department of Children and Families and the Department of Agriculture about the suspected fraud.

“I think the system is overwhelmed or somebody is not checking it,” Billue told Welch.  

A recent audit revealed Billue may be right. A report found the agency that investigates fraud complaints -- the Division of Public Assistance Fraud -- was not keeping track of all the fraud tips from the public.

Auditors recommended the Division establish effective controls to ensure that federal data is “completely, accurately and timely recorded,” according to the document.

More than half the tips coming in were rejected because of "workload issues,” according to the audit.

In Orlando, according to the documents 9 Investigates obtained, only seven investigators handle thousands of tips.

The auditors discovered they were closing some cases because of "too few resources."

Jack Heacock, the director of the Davison of Public Assistance Fraud, told 9 Investigates, “We are continuing to work to improve the effectiveness and efficiency of our investigations.”  

Heacock insists, despite what the audit shows, that his investigators are not overwhelmed.

He told Welch they are addressing a backlog of nearly 2,000 cases that are “pending assignment." He also said the number of cases they've sent to prosecutors has doubled.  

“We are aggressively pursuing fraud in all facets of this state,” Heacock said.

As for what we saw at the Lucky Food Store, Heacock admits his agency has been getting complaints about that very store since 2010 but said it is up to the U.S. Department of Agriculture to remove any store abusing the system from the program.  

Billue said as long as stores are willing to exchange food stamp cards for cash, taxpayers will keep getting ripped off.         

“If they don’t have someone to sell it to, that eliminates 99 percent of the problem,” Billue said.

Welch called the owner of Lucky Food Store.  He told her he didn’t know anything about food stamp trafficking at his business and said he would look into the issue.

But 9 Investigates also obtained documents that prove the state has been getting tips from people reporting fraud at the store going back four years to 2010.

USDA officials wouldn’t say if they have opened a federal investigation. However, sources who work these cases tell WFTV it can take years to gather enough evidence to prosecute these cases.

After a series of 9 Investigates reports, state lawmakers passed a bill that increases the penalties for food stamp fraud and set up a program to offer cash rewards to people who report fraud.

A second bill that passed this session gives the Division of Public Assistance Fraud the ability to subpoena store records and bank records to help speed up the investigations.

Report Food Stamp Trafficking | Report Food Stamp Abuse