THE VIRGINIAN-PILOT
Copyright (c) 1996, Landmark Communications, Inc.
DATE: Thursday, May 2, 1996 TAG: 9605020436
SECTION: FRONT PAGE: A1 EDITION: FINAL
SOURCE: BY STEPHANIE STOUGHTON, STAFF WRITER
LENGTH: Medium: 60 lines
Federal investigators have found that more than 100 retailers in Hampton Roads committed fraud by accepting food stamps for cash, liquor and other nonfood items, the Agriculture Department said Wednesday.
In all, food-stamp investigators visited 798 stores last month in three regions: Hampton Roads, Jacksonville, Fla., and Seattle-Tacoma, Wash.
The areas were picked for logistical considerations, not for high fraud rates. But the retailers, mainly convenience stores, were picked because they were more prone to food-stamp fraud, said Walter Haake, a USDA spokesman.
Of all stores visited, nearly 42 percent, or 331 retailers, committed some sort of food-stamp fraud, the federal agency said.
Some of the retailers may be fined or barred permanently from the food stamp program. Others could lose their state liquor licenses.
``These are tough penalities that will put many of these violators out of business,'' Agriculture Secretary Dan Glickman said.
In Hampton Roads, 104 retailers were cited. About half of them will receive warning letters, while the remainder face more serious penalties, said Margarita Maisterrana, an Agriculture Department spokeswoman.
Twenty-nine local 7-Eleven convenience stores were cited for various food-stamp violations. Others included Bayshore Markets off Virginia Beach Boulevard in Virginia Beach and the Hawkins Quick Stop in Newport News.
The total number of retailers investigated in Hampton Roads was not available.
Several retailers contacted had no idea of the trouble because the USDA's notices had not yet arrived.
Nasar Khan, manager of Park Avenue Market in Chesapeake, said he doubts any of his employees would be involved. His store, however, was cited for food-stamp violations.
``Everybody knows that's illegal,'' said Khan, who said he hadn't received any notices from the USDA.
Of the total 331 retailers cited nationwide, 82 were accused of trafficking, or purchasing food stamps for cash. The 82 stores bought $13,500 worth of food stamps for just over $6,900 in cash. They face fines or disqualification from the program.
Another 249 stores sold items other than food in exchange for stamps, investigators said. Those stores will receive temporary disqualifications, fines or warning letters.
Nationwide, the food stamp program will spend more than $26 billion this year to help feed 26 million people.
The investigation, dubbed ``Operation Trident,'' was the first test of an intensive sweep to detect violations.
The Agriculture Department estimates that trafficking drained $815 million from the food stamp program in 1993, while fraud and errors by caseworkers and recipients added $1.8 billion in losses. MEMO: The Associated Press contributed to this story.
KEYWORDS: FOOD STAMPS FRAUD by CNB