SNAP-Fraud Savings
Here are numbers of people suspended from receiving Supplemental Nutritional Assistance Plan (SNAP), formerly known as food stamps, either for their lifetimes or for shorter amounts of time:
July 2012-June 2013: 115 people; 19 permanently;
July 2013-June 2014: 234 people; 93 permanently;
July 2014-June 2015: 257 people; 87 permanently;
July 2015 thru Dec. 9: 67 people; 18 permanently.
Source: Butler County Job and Family Services
Fifteen employees of two Fairfield meat-distributing companies were indicted in September on charges of illegally trading federal “food stamp” benefits for cash and narcotics. But hundreds of others also face potential penalties.
The 15 employees of US Beef Cincinnati LLC, of 3210 Profit Drive, and Butcher Shop Food Distributors LLC, 300 Commercial Drive, face charges that include wire fraud, food-stamp benefits fraud, theft of U.S. government property, money laundering and possession with intent to distribute and actual distribution of controlled substances.
Some 700-800 Supplemental Nutritional Assistance Plan (SNAP) recipients across the region suspected of making such trades with the businesses also will be examined. SNAP, formerly known as food stamps, is the program that gives money to low-income households to buy food. Among items that are not allowed to be sold for SNAP benefits are cash, alcohol, tobacco and narcotics.
“Depending on the severity of the offense, anybody can be charged criminally, which will end up being a felony of the fifth degree or above,” said Butler County Sheriff’s Sgt. Jason Rosser, who heads a three-deputy team that investigates SNAP trafficking by recipients.
“We do pass a lot of information down to Hamilton County Job and Family Services, to where they will look into certain aspects of fraud, to find out whether they can do something with the case,” Rosser said. “I know some have also been passed on to Montgomery County.
“But out of those 700, we’re still sifting through, to find out, one, if it’s in fact fraud, or two, how in-depth it is,” he said. “So those are not confirmed, but those are the ones we’re looking at right now.”
Since July of 2012, when Butler County Job and Family Services, which administers the SNAP program, contracted with the county sheriff’s and prosecutor’s offices, officials have barred people from receiving more than $20 million in future benefits, some for their lifetimes.
Business Owners Had Money
Harold Torrens, the agent in charge of the state’s Ohio Investigative Unit Cincinnati office, which investigated the SNAP trafficking, said Scott Andrew Traum, 45, and Joey Lightcap-Traum, 43, the owners of US Beef, were paying $3,700 a month rent on their Colerain Township home, and were driving a Hummer H2, a Corvette and a Cadillac Escalade.
“The retailer is getting rich off a few individuals that consistently come back,” Torrens said.
Those with SNAP cards were willing to trade their benefits for cash – often at a rate of 50 cents on the dollar – because the cash allowed them to buy things they couldn’t legally buy with their SNAP cards, such as heroin or pain pills. When that happens, it foils SNAP’s purpose of providing nutrition to people who need it.
“It’s devastating” to witness, Rosser said. “You see these kids that are malnourished. They’re not getting the food they need, and then you look at the parents, and you can see that they’re definitely an addict…. Those are the ones that are most disheartening.”
Prosecutors also indicted Butcher Shop owner Joseph R. Gray, 34, of 1095 Haverhill Drive in Hamilton, but he lived in more modest conditions. Neither he nor the Traums could be contacted through their business phones or emails. The address for US Beef now contains a new sign out front for a company called “Americas Finest Foods.”
“They’re no longer the owners of the company,” a woman at Americas Finest Foods who identified herself as Linda Lane said, when a call was placed there, seeking to speak with the Traums. “They, after all of that happened, closed down US Beef Cincinnati.”
Here are examples of alleged transactions listed in the indictments and other court records:
• Two Butcher Shop employees on July 24 provided $200 in cash, 50 hydrocodone pills and 5.02 grams of heroin for $2,400 in SNAP benefits.
• Two US Beef employees on Feb. 3 paid $550 in cash for $1,099.78 in SNAP benefits.
• Transactions happened in a variety of area parking lots, including the Speedway in the 7300 block of Dixie Highway in Fairfield, the Colerain Township Walmart, and parking lots of a Gold Star Chili and several other stores in the Spring Grove area of Cincinnati.
Officials say the dollar figures were large: The Traums allegedly deposited more than $900,000 of fraudulent wire transfer money into bank accounts they controlled between December of 2011 and August of this year, while Gray is accused of depositing more than $380,000 of similar funds into his accounts.
Other Legal Troubles
In another legal matter, Ohio Attorney General Mike DeWine’s office in November sued US Beef Cincinnati in Butler County Common Pleas Court, seeking fines against the firm and reimbursement of customers for violations of the Ohio Consumer Sales Practices Act and the Home Solicitation Sales Act.
The lawsuit seeks $25,000 in civil fines for each violation, alleging several violations of the laws:
• Employees misrepresented amounts and weights of products sold;
• The company failed to honor its guarantee of meat quality and replacement or exchange of the products;
• The business’ employees would falsely state a customer’s neighbor was a customer “when in fact no neighbor was a customer”; and
• The business and its employees failed to tell customers about their three-day right to cancel, and didn’t provide customers with cancellation forms.
DeWine’s lawsuit seeks an injunction preventing US Beef from selling to customers until it meets conditions the state has asked Judge Noah Powers to impose on the company.
Rosser, of Butler County’s SNAP investigative unit, said sometimes drug users are so dedicated to getting drugs, they simply turn over their SNAP cards to their dealers, who use the cards at will.
One drug user “advised me that when she applied for benefits, as soon as she received her card, she went and gave it directly to her heroin dealer,” Rosser said. “And she had not even used her card for a little over a year. She had a food-stamp card but had never used it herself. She would just go to her dealer’s house, pick up her heroin, and that would be like her going to the grocery store.”
Rosser said some who have been made aware they could face felony charges for trading their cards for cash or drugs decided the temptation to do so would be too great, so they stopped receiving SNAP benefits.
“We’ve had some who have told us they have actually decided not to reapply again for the temptation of selling it to get their drugs,” Rosser said. “We have had several people tell us that.”
Jerome Kearns, assistant director of Butler County Job and Family Services, which administers the SNAP program, said more than 45,000 people in the county are helped by SNAP benefits.
Under an arrangement worked out through the county commissioners, the department pays the sheriff’s office $241,000 a year and the prosecutor’s office $20,000 annually under contracts for SNAP-trafficking investigations. Since the program started in mid-2012, 673 people have been suspended from getting benefits — 217 of them for life, anywhere in the country.
Those suspensions are what lead to the estimate of $20 million in future savings.
Payment of the $261,000 to investigators “is an incredible return on our investment,” Kearns said. “Looking at the month of November, there were 18 total disqualifications that accounted for 3,500-some-odd months of disqualification.”
The savings from those 18 November disqualifications alone “was projected at $565,000,” Kearns said.
“I know we’re one of very few counties in the state that are doing this,” Kearns said. “This is just one type of fraud that we’re addressing. Our staff look at other types of fraud, and that sort of thing, and make investigations. Fraud is a real concern to us, and that is why we’re committing the resources that we are to address it.’
Other kinds of fraud include people receiving benefits they aren’t entitled to receive.
About the Author