Ohio Market Owners Charged With Food Stamp Fraud Exceeding $10 Million

A sign alerting customers about SNAP food stamps benefits is displayed at a grocery store in New York City on Dec. 5, 2019. (Scott Heins/Getty Images)

Two brothers running a Somali specialty market in Columbus, Ohio, have been charged with defrauding government food programs for the poor.

According to officials, Hassan and Abdurahim Nuriso redeemed more than $8 million in food stamps and over $2 million in Women, Infants, and Children (WIC) benefits between 2010 and November 2019.

“The government alleges a majority of those redemptions were fraudulent,” the U.S. Attorney’s Office in the Southern District of Ohio stated in a Feb. 21 release.

Food stamps, officially called the Supplemental Nutritional Assistance Program (SNAP), give more than 36 million low-income Americans about $120 a head for food and other necessities every month. The program cost over $58 billion in 2019.

WIC provides about 6.4 million women and children with food benefits, nutrition education, and health care referrals at a cost of over $5 billion a year.

The Nuriso brothers were letting customers pay with their benefits cards for ineligible items, including hygiene products, household supplies, phone cards, and hookah fuel, according to the Feb. 20 indictment. They also exchanged customers’ benefits for cash and let the customers repay small loans provided by the market with those benefits, the indictment says.

They face five counts, including conspiracy to defraud, SNAP and WIC fraud, theft of public funds, and “unlawful food stamp redemptions,” for a total of up to 45 years in prison and up to hundreds of thousands in fines.

“The government is seeking to forfeit more than $200,000 in this case. Approximately $18,650 in cash was seized during a federal search and seizure warrant at one of the Nuriso brother’s homes in Grove City in November 2018,” the release said.

SNAP Fraud

Officially, fraud accounts for about 1.5 percent of SNAP benefits—less than a billion a year. But the government SNAP fraud investigators themselves acknowledge the fraud is under-reported, according to the conservative Government Accountability Institute (GAI), which interviewed about two dozen of the investigators for its 2018 SNAP fraud report.

“Pinning down a definitive total is difficult, but it’s safe to say that it’s well into the billions,” GAI President Peter Schweizer previously said in a statement to The Epoch Times.

The interviewed SNAP fraud investigators’ estimated fraud rate between 20 percent and 30 percent, he said.

Some people abuse SNAP by lying about their income or the number of people in their household to get higher benefits. Others exchange the benefits for cash. They would, for example, pretend to buy $50 worth of groceries and the store owner would give them $25 in cash, charge $50 to the government, and pocket the difference.

In 2017, 12 store owners were indicted in Florida in the biggest SNAP fraud bust in its history for siphoning $20 million from the program.

Prosecutors have uncovered instances where fraudsters used SNAP dollars to buy drugs, arms, and even to fund terrorists overseas, including al-Qaeda.

Solving the Problem

There are several roadblocks to uncovering SNAP fraud. First, there are not enough investigators. Florida’s Division of Public Assistance Fraud, for example, received nearly 24,000 suspected fraud referrals in the 2017 fiscal year, but investigated fewer than 2,000 of them, according to the GAI report.

Also, for prosecution, the law requires that the fraud on the part of the beneficiaries is committed willfully, which means the government has to prove a person knew he or she collected the benefits illegally. On one hand, this standard serves to protect people who unintentionally report lower income. On the other, it allows fraudsters to claim ignorance of the rules to avoid responsibility.

In addition, if the government clerk issuing SNAP “could have or should have known” that an applicant was committing fraud, the clerk would then be blamed, not the recipient. The incident is then labeled an “agency error” and isn’t counted in the fraud statistics, the GAI said.

The Trump administration has tightened SNAP eligibility criteria for able-bodied adults and has proposed further restrictions.

SNAP enrollment overall has declined in recent years—by about 6.5 million in the first 34 months under President Donald Trump and close to 3.7 million in the last 34 months of the Obama administration.