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Judicial Watch, Inc. is a conservative, non-partisan educational foundation, which promotes transparency, accountability and integrity in government, politics and the law.

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Corruption Chronicles

Store Charged With Fraud Survives On Food-Stamp Clients

A convenience store charged with trafficking food stamps can’t get booted from the government program because it would crush the business since it’s located in a poor neighborhood where most clients use the welfare benefit to pay for merchandise, a federal judge has ruled.

The case, currently before a federal court in Arizona, involves a corner shop in a low-income neighborhood in northwest Phoenix. The feds have charged the owners, a husband-and-wife team, for trafficking $55 in food stamps, officially known as the Supplemental Nutrition Assistance Program (SNAP) to avoid any stigma associated with a government handout.

SNAP rules specifically require participating businesses—stores that accept food stamps as payment—be kicked out of the program if they are charged with any wrongdoing. The U.S. Department of Agriculture (USDA) administers the program and grants the permits to participating retailers. There is a lot of money involved. In fiscal year 2012, the last available figures, more than $74 billion in client benefits were redeemed at more than 246,000 participating stores, farmers’ markets and homeless meal providers, according to figures listed in the USDA’s annual report.

In the Phoenix case prosecutors, as per federal law, quickly moved to eject the convenience store from the government’s SNAP program after charging the owners with fraud. The owners took legal action to stop it, claiming that their business depends on food stamps for survival. They say their little store, called Bubba’s Drive Thru, would go under without food stamps because the majority of their clients use them to pay. In fact, most of the people who live in the area get some kind of government assistance, the criminally charged merchants revealed in federal court.

The federal judge hearing the case, David Campbell, was sympathetic and blocked the government from dropping Bubba’s Drive Thru from the SNAP roster this month. That means that, despite being criminally charged they get the opportunity to fleece more American taxpayers via the bloated food stamp program. That’s because Judge Campbell has determined the accused criminals’ “livelihood” will be negatively affected if the government stops the cash flow.

“As noted, Plaintiffs assert without contradiction that they will be out of business within a matter of weeks,” Judge Campbell wrote in his order. “Thus, if their disqualification takes effect immediately as provided in Defendants (the government) procedures, with no possibility of a stay, Plaintiffs will have been permanently deprived of their business and livelihood….”

It gets better. The judge downplayed the fraud as “only $55 of SNAP trafficking violations in the last five years.” He also acknowledged that “public interest normally would favor an honest and effectively enforced SNAP program” but says in the order that the case’s “unique facts” have led him to conclude that “the public interest would not be served by permanently shutting down” Bubba’s Drive Thru.

This absurd case is part of a bigger problem involving the government’s food-stamp program, which has grown immensely under President Obama. A record 48 million people—and growing—get free groceries from the government and the administration operates an aggressive promotion campaign to recruit even more recipients. It’s all part of Obama’s commitment to eradicate what he says is a national epidemic of “food insecure” households. Like all out-of-control government programs, this one has been plagued by fraud and corruption, forcing one U.S. senator to take action calling for an end to the madness.




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