Several years ago, one of the reasons plastic electronic benefit transfer (EBT) cards were introduced was to reduce benefits (welfare) fraud.

Apparently, criminals preying on government entitlement systems have figured out how to keep right on scamming the system using this form of “plastic.”

Dan Cortex of the Free Detroit Press reports:

An intricately coordinated raid 18 months in the making resulted in the arrests Tuesday of more than two dozen business owners and employees involved in a fraud that costs the state about $55 million annually.

At least 25 people were arrested when about 200 state, federal and local officials descended on the stores, mostly in Dearborn and Detroit.

Interestingly enough, the manner in which this was accomplished wasn’t very sophisticated:

Instead of using the cards to buy food, State Police said some card owners collaborated with store owners to trade them in for cash at the stores — often at half the value of the cards. The stores, in turn, collected the full amount on the debit cards from the state.

Before EBT cards the same thing used to occur using the paper food stamps issued to government assistance recipients. With the use of electronic payment systems, converting the benefits to cash is probably less labor intensive than it used to be for the criminals involved in this activity.

The article also mentions that bank accounts and passports were seized. Do passports being seized mean that some of these people aren’t even citizens?

Because of this, I decided to dig a little further. I was able to find a little more information on the Michigan Attorney General’s site.

Here is what they are being charged with:

The defendants are charged with a felony violation of the food stamp act for which the maximum penalties are 10 years imprisonment and/or $250,000 in penalties. In addition, the stores and its owners and employees are charged with conducting a continuing criminal enterprise (punishable by up to 20 years imprisonment and/or $100,000 and criminal forfeiture of proceeds), conspiracy (up to 5 years imprisonment and/or $10,000 fine), electronic benefit transfer (EBT) card fraud (4 years imprisonment and/or $4,000 fine), and money laundering (10 year imprisonment and/or $100,000 in fines).

Considering how easily this was done, I’m guessing that it might be happening in other places, also. Maybe other States should look into this matter like the great State of Michigan has? Given how easily this was accomplished, I doubt Michigan is the only place with a problem.

One thing is for certain – I don’t think plastic has stopped very much of this particular type of fraud. The true victims in this are the people probably going hungry at the expense of these criminals. In reality, they are doing nothing more than stealing food from the mouths of children!

The insane thing is how did we ever think that electronic payment cards would reduce fraud? All anyone would have had to do is take a look at how easily debit and credit cards are compromised.

Also not mentioned in the mainstream media were the names of the alleged defendants. Given that passports were seized, I’m guessing that some of the alleged defendants might be considered a flight risk:

Citgo
8351 Woodward Detroit, Michigan

Nabil Shamel, owner

Jamal Chami, employee

Waad Fawazi, employee

Livernois Gasoline
7645 Livernois Detroit, Michigan

Hafaid Musleh-Mohmood Alkahif, owner

Abdul Fattah-Mohmood Alkahif, employee

Dheyab M. Alquhaif, employee

Ammar Mahmood Gobah, employee

Mustafa Mohamen-Ahmed Alqohaif, employee

Yousef Mohamed-Ahmed Alqohaif, employee

U&I Petro
8820 Wyoming Detroit, Michigan

Saleh Algathaithi, owner

Saif Ahmed Alghathie, employee

Hassan Ali Hussein, employee

C&M Mini Mart
18420 James Couzens Detroit, Michigan

Abdo Mahfouz, owner

Ali Abdo Mahfouz, employee

Tarek Moshen Baderddine, employee

Rowan Party Store
7000 Rowan
Detroit, Michigan

Saeb Abdul-Ghani Abdul-Ghani, owner

Joseph Soliman Elrubi, employee

Maher Diab, employee

Big Al’s Marathon
3910 Grand River Detroit, Michigan

Hussien Kamel Beydoun, owner

Ali Hussein Beydoun, employee

Van Dyke Petro
19030 Van Dyke Detroit, Michigan

Taha Ahmad Dika, owner

Nizar Ali Nazha, employee

Michael Maher, employee

Bassel Ibrahim-El-Sayed-Sleim Hachem, employee

Schaefer & Puritan
15901 Schaefer Detroit, Michigan

Mr. and Mrs. Adel Mohamad Kobeissi, owner

Khaled Abid Al-Bonijim, employee

Moahamad A. Berro, employee

Detroit Free Press article, here.

Press release from the Michigan Attorney General’s Office, here.

Article from 1998 (WRAL.com) about how EBT cards reduce fraud, here.

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