Just two months after Georgia reached an agreement to reimburse the federal government for over payments in a nutrition program for poor people, 36 metro Atlantans were indicted along with 18 others for alleged fraud involving the trading of more than $18 million in WIC vouchers and food stamps for cash through bogus grocery stores.
The defendants were charged in a federal indictment unsealed Tuesday in Savannah that the FBI called "massive" and said represents "one of the largest federal food program frauds ever prosecuted." The indictment comes a year after federal authorities charged 16 others in an $8 million scheme, 13 of whom have pleaded guilty and three have been convicted.
Georgia’s Women, Infant and Children (WIC) program provides infant formula, juice, eggs, fresh fruits and vegetables, and other healthy foods to low-income pregnant women and to infants and children up to age 5 who are nutritionally at risk, according to the FBI.
Participants in the WIC program receive three-month supplies of WIC vouchers, which can be exchanged at authorized stores for approved healthy foods.
The food stamp program provides benefits to low-income families through Electronic Benefit Transfer cards similar to debit cards.
Much of the fraud was possible because of problems the U.S. Department of Agriculture found with Georgia’s program. Earlier this year, the state and the USDA reached a settlement regarding how to fix the problems, mostly cause by an antiquated computer system.
Georgia will reimburse the USDA at least $2 million by September 2018. If it does not meet all the requirements of the settlement, state taxpayers will owe the USDA $8.6 million more.
The Atlanta Journal-Constitution reported last year systemic problems in the WIC program, funded with tax dollars but administered by the state, that federal officials stopped approving new stores as WIC vendors.
At the time, Georgia’s WIC program has the highest per-participant food cost of any state in the nation, according to federal records obtained by the AJC, ranking above other states where the cost of living is higher. A federal review found that WIC was paying up to $7 for a gallon of milk in Georgia because the state isn’t doing enough to keep costs down at stores approved to accept WIC.
The indictment returned in Savannah earlier this month, but unsealed Tuesday, focused on the crime of exchanging WIC or food stamp benefits for cash.
According to the indictment, stores in Savannah, Macon, Atlanta, Garden City, Lithonia, LaGrange, Stone Mountain, and Riverdale, all owned by a married couple, were paying pennies on the dollar to people who received the benefits and then applying to the government for reimbursements for the full value.
The indictment said the stores only sold some food products so they could qualify. The 54 people indicted allegedly canvassed low-income neighborhoods and solicited WIC and food stamp participants to illegally exchange their benefits not for food but for cash,” the FBI release said.
An additional 34 defendants charged separately from the larger indictment are alleged by the FBI to have sold for cash more than $1,000 worth of their own WIC or food stamp benefits.
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