Roanoke Times
Copyright (c) 1995, Landmark Communications, Inc.
DATE: MONDAY, November 28, 1994 TAG: 9411280075
SECTION: VIRGINIA PAGE: C-1 EDITION: METRO
SOURCE: LESLIE TAYLOR STAFF WRITER
DATELINE: LENGTH: Long
The number is small - two - and the U.S. Department of Agriculture is barely into its new fiscal year, which runs Oct.1-Sept.30. But it is significant considering that only two Roanoke Valley food stores were disqualified from the food stamp program during the 1993-94 fiscal year.
"We know there is abuse and we know that it has to be cleaned up," said Chris Martin, regional administrator of the USDA's Food and Consumer Service's mid-Atlantic office in New Jersey. "We are absolutely committed to eliminating the abuse of this program."
Since Oct.1, six stores in Virginia have been disqualified for food stamp violations by their owners or employees. The two in the Roanoke area are the Star Market on Melrose Avenue Northwest and the Kingery Bros. Country Store on U.S. 220 in south Roanoke County.
The other four disqualifications were in Richmond, Isle of Wight, Lynchburg and Charlottesville, said Kim Jabat, a spokeswoman for the USDA's Food and Consumer Service.
Star Market has been disqualified permanently for trafficking violations, the agency said in a news release. Undercover investigators - acting on a tip - watched two employees give customers $620 cash for $1,180 worth of food stamps, Jabat said.
Star Market owner Mukeseh Patel filed a lawsuit in U.S. District Court in Roanoke on Oct.12, claiming that he had been unjustly disqualified. But two weeks later, he filed a motion to voluntarily dismiss the suit. The case was closed Oct.26.
Patel did not return a reporter's phone calls last week.
The Kingery Bros. Country Store was disqualified on Oct.17 for three years. Jabat said USDA investigators watched an employee on several occasions exchange food stamps for cigarettes, T-shirts, soap, household cleaner, drain opener, toothpaste, shaving cream, shoe polish, glue, motor oil, ant traps, windshield-washer fluid and car wax - items that could not be purchased legally with food stamps.
One of the store's owners, contacted last week, declined to comment on the disqualification.
Whether the Roanoke area is a target of the USDA or whether the agency simply receives more complaints from the area is difficult to determine.
"We try to do as much work throughout a five-state region as we can," said Dallas Hayden, assistant regional inspector general for the USDA's Northeast Region office. "We happened to receive complaints and decided to put some of our efforts in that area. But we don't track by area."
The USDA's Food and Consumer Service, which has overall responsibility for the food stamp program, has several ways of identifying abuse in food stores. One is through complaints or tips to its (800) 424-9121 fraud hot line.
"A second way is just through our people hearing about abuses, having a sense that something is not quite right and doing an investigation," Martin said.
What constitutes abuse?
One example is a food store knowingly allowing a recipient to use food stamps for ineligible items.
The most flagrant abuse is trafficking - the sale, purchase or barter of food stamps, usually for cash. Traffickers often obtain food stamps from recipients at a substantial discount from their face value.
"Trafficking is a very serious violation, and that's why the store owners who are responsible for [their] own employees are disqualified from the program if this violation occurs," Jabat said.
"If the food stamps are discounted, somebody's making a profit."
In the 1993-94 fiscal year, the Community Grocery on Elm Avenue Southwest and the Southwest Stop & Shop on Marshall Avenue Southwest were disqualified permanently from the food stamp program for trafficking violations by store employees. The Corner Store on 13th Street Southwest was disqualified for the same offense in the 1992-93 fiscal year.
For Ralph Pugh Sr., former owner of the Southwest Stop & Shop, the violations resulted in criminal charges. He pleaded guilty to food stamp fraud in January in U.S. District Court in Roanoke. He was put on probation for nine months and ordered to pay $1,628 to cover the cost of supervision, a $500 fine, $345 in restitution and $50 in court costs.
Pugh could not be reached for comment. His former partner said last week that Pugh no longer is involved in the business.
"A lot of times, a store that has been disqualified permanently will wind up closing down or selling," Martin said. "If an inner-city store has 80 percent of its business in food stamps and we permanently disqualify them, in essence they're out of business."
To combat fraud violations, the federal government has pushed electronic transfers as a means of issuing benefits, including food stamps, welfare checks and child support.
The system uses a plastic card similar to a bank card to transfer funds from benefit accounts, such as food stamps, to retailers' accounts. The system has been used on a pilot basis in Maryland for more than a year.
Virginia's General Assembly passed legislation this year that would allow the state to set up a benefit-transfer system. The state has submitted a preliminary application to the USDA.
"We told them to proceed," Martin said. "They're in the process of finalizing another application, which would allow them to go out and do a feasibility study."
Twenty-four other states have submitted similar applications.
The system "would provide us with an even better way to detect potential trafficking and fraud in food stamps," Martin said. "We would have a completely automated record of every single food stamp transaction that occurs.
"The bottom line is the food stamp program is a much-needed program. A lot of people are in need of food assistance. Equally important is the integrity of the program."
by CNB