Obama Food-Stamp Free-for-All: Feds Bust Largest Fraud Operation in U.S. History

President Obama’s expanded food-stamp program certifying flea market retailers as vendors to provide low-income neighborhoods with fresh produce has ripped open a Pandora’s Box of fraud and corruption. This week federal authorities in south Florida busted the largest food-stamp fraud operation in U.S. history. Twenty-two defendants in the largely black and Hispanic areas of Miami-Dade County known as Opa-Locka and Hialeah swindled the government out of $13 million by fraudulently trading food stamps for cash.

The crooked vendors operated food and produce stands at a local flea market as part of First Lady Michelle Obama’s initiative to eradicate “food deserts,” common in poor, minority communities where fresh, healthy food is tough to find or often unavailable. The feds say the business owners and their employees let food-stamp recipients use their welfare benefit to get cash in exchange for a cut of the money. They swiped the recipient’s Supplemental Nutrition Assistance Program (SNAP) card (the government created the name to avoid stigma) for an inflated amount, doled out cash and kept a percentage. In most instances the recipient didn’t actually get food, according to federal authorities. “These flea market retailers are charged with having taken advantage of a provision in the SNAP program designed to provide locally sourced fresh produce and meat to low income families who otherwise would likely have no option for such food items,” said a special agent with the U.S. Department of Agriculture (USDA) Office of Inspector General in an announcement. The USDA funds food stamps, which are then distributed by states.

Thousands of food-stamp recipients are believed to have exchanged their benefit for cash in this flea market scheme that “defrauded the American taxpayer” and “denied healthy foods to needy children and their families,” according to the USDA OIG agent, Karen Citizen-Wilcox. In a press conference attended by Judicial Watch in the Justice Department’s Miami headquarters this week, federal prosecutors coined the case “Operation Stampede.” The defendants, all authorized by the government to accept food stamps as part of the administration’s new initiative, face up to 20 years in prison. Authorities didn’t touch on consequences that the food-stamp recipients should face for also breaking the law. They also committed fraud by knowingly taking cash—instead of food—which is illegal under program rules. This has been going for some time and in fact, JW reported in 2012 on a federal audit that found food-stamp recipients were using their welfare benefit to buy drugs, weapons and other contraband from unscrupulous vendors. The same investigation also determined that some trade food stamps for reduced amounts of cash like in this latest Florida flea market case. Two years later JW reported that SNAP benefits were being sold online using social media such as Facebook, Twitter and ecommerce websites like Craigslist and eBay.

This hasn’t stopped the administration from expanding the food stamp rolls—in the name of reducing “food insecurity”—which are currently at more than 45 million, according to the latest USDA figures. This translates into tens of billions of dollars for a bloated program that saw its annual spending more than double in just five years. Besides the free groceries, the administration has also dedicated tens of millions more to provide food-stamp recipients with free fruits and veggies as part of the First Lady’s effort to revolutionize the inner-city diet. Among them is a $31.5 million effort to create projects that increase the purchase of fruits and vegetables among low-income consumers that already get food stamps and a $1.9 million research center that will find ways to help recipients make healthier and wiser food choices. This is no joke. The new compound will be known as the Center for Behavioral Economics and Healthy Food Choice.