On May 11, 2016, federal, state and local law enforcement agencies executed arrest and search warrants at the Opa-Locka Hialeah Flea Market in Miami-Dade County. Participating agencies included the U.S. Department of Agriculture - Office of the Inspector General; Florida Department of Law Enforcement, Palm Beach County Sheriff’s Office-Public Assistance Fraud Task Force including the West Palm Beach Police Department and the Lake Clarke Shores Police Department.
According to the state attorney's office, qualified retailers are stealing from the Supplemental Nutrition Assistance Program by exchanging food items for cash in a scheme known as food stamp trafficking.
Over 500 victims in Palm Beach County had their identities stolen as part of the scheme. The thieves made illegal EBT cards using the victims’ information, officials said.
The scheme cost the United States Department of Agriculture over $13 million, officials said. "The flea market retailers, who are alleged to have orchestrated this trafficking scheme, pocketed millions in fees which they charged for converting food assistance benefits into cash," Karen Citizen-Wilcox, special agent in charge, U.S. Department of Agriculture - Office of the Inspector General. "Any retailer who chooses to defraud taxpayers through such trafficking schemes will continue to be aggressively investigated and prosecuted by USDA-OIG and its law enforcement partners."
Thirteen people were arrested on federal charges and five people were arrested on state charges and are facing racketeer influenced and corrupt organizations (RICO) charges.
Investigators said a customer would swipe an EBT card and receive cash rather than eligible food items. The government, in turn, reimbursed the storeowner the full price listed on the receipt, even though in many cases no food was purchased with an EBT card, officials said.
SNAP is a federally funded national program that helps alleviate hunger among low-income families. It is administered by Florida Department of Children and Families. A person who is eligible to receive SNAP benefits uses an EBT card to buy food under the program. The EBT card can be used only to purchase food and food-related item and cannot be used to withdraw money similar to an ATM card.
The scheme was carried out throughout Miami-Dade and Palm Beach counties, officials said.
Shell storeowners are benefiting the most from such schemes because they can make between 20 percent and 50 percent on each sale, officials said.
One local market brought in more money than a retail store, officials said. The market had no carts, cash registers or any products that indicating it was a business. However, it averaged $158 in sales from each person who used EBT card while a large grocery chain averaged only $43 in comparison.