Food Stamp Fraud Case Study

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Company Description

The Supplemental Nutrition Assistance Program (SNAP), formerly known as the Food Stamp Program, is the United States government largest food assistance program. It provides a protection for low-income people in the United States to meet food and nutrition needs. The United States Department of Agriculture (USDA) administers SNAP at the Federal level through its Food and Nutrition Service (FNS). The program started in April 1939 and was credited to various people, most notably Secretary of Agriculture Henry Wallace and the program's first Administrator Milo Perkins. Its mission is “to provide food assistance and nutrition education to assist participants as they move to a healthier lifestyle and self-sufficiency” [ (Hopper, 2008) ].

SNAP recipients receive a monthly allowance in the form of electronic debit cards, which also known as electronic benefit transfers (EBT). All states have implemented EBT since June 2004 replacing the paper food stamp. The EBT card works just like a debit or credit card when purchasing food. The maximum allowance in 2012 for a family of four is $668 per month, and only allowed to use to purchase food items at the authorized market. SNAP recipients cannot use the benefit to purchase alcohol and tobacco, and cannot redeemed it for cash. There were about 230,000 authorized retailers nationwide and served nearly 45 million people, about one in seven Americans in fiscal year 2011 [ (United States Department of Agriculture [USDA], 2012) ].

Problem and Methodology
One of many food stamp frauds was discovered when an employee of New York City Human Resources Administration (HRA) noticed and reported irregularities in HRA’s processing of food stamp applications. The New York City Department of Investigation (DOI) investigated the report and found out that Vanee Sykes with other four people, including current and former New York City employees carrying out a massive food stamp fraud.

Vanee Sykes was a supervisor at the New York City Human Resources Administration (HRA), the agency responsible for administering the food stamp benefits program in New York City. Started in 2007 until 2010, Sykes used her access to the Welfare Management System, an HRA computer database that maintains records relating to food stamp benefit. Sykes processed and approved many Food Stamp Cards and food stamp benefits using fake names, fake social security numbers, and fake income and expense data. Based on the Welfare Management System records, Sykes created approximately 1,122 fraudulent food stamp benefits cases during this period, and the total dollar amount credited onto these fraudulent Food Stamp Cards exceeded $7 million. Sykes was sentenced to 63 months in prison [ (United States Department of Justice [USDOJ], 2011) ].

Alice Bradford gave Sykes mailing addresses to create the fraudulent food stamp cases. Sykes then had the fraudulent Food Stamp Cards mailed to these addresses. Bradford paid the other people for using these mailing addresses, collected the cards, and then sold most of them in cash. In turn, Bradford gave Sykes a portion of the cash she received from the transaction. Bradford and Sykes created approximately 300 fraudulent food stamps. Bradford was sentenced to 30 months in prisons (USDOJ, 2011).

Tori Jackson worked at HRA in various positions, and at times reported to Sykes. She also created and processed fraudulent Food Stamp Cards using fake names and fake social security numbers. Jackson and Sykes created approximately 45 fraudulent food stamps. As a result, HRA issued almost $300,000 in food stamps improperly. Jackson was sentenced to 41months in prison (USDOJ, 2011).

Lois Johnson had worked for HRA for over 30 years, asked Jackson to mail approximately four fraudulent Food Stamp Cards to her post office box. Johnson used the three Food Stamp Cards for her own benefits, and gave one to another individual. Johnson was sentenced to three years of...
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