2 Investigators: Benefits Fraud Runs Rampant
CHICAGO (CBS) -- Link cards are supposed to help families across the country that are out of work or struggling financially to put food on the table.
It's the modern-day version of food stamp, and it's all funded by taxpayers. But local convenience store operators are getting their hands on the cards and profiting without selling any food, 2 Investigator Dave Savini reports.
Nationwide, the problem is so bad, it is estimated there is $330 million in Link Card fraud each year.
Some local merchants are facing criminal charges following a sting by Cook County Sheriff's police.
During one undercover sting, a store clerk was caught paying cash for a Link Card. The grocer makes a big profit by giving out less cash than the value of the card. It's an illegal practice because Link Cards only can be used to buy food and household items.
In Illinois alone, $251 million in Link Card food assistance is given to recipients each month. The big bucks are badly abused, says Cook County Sheriff Tom Dart.
"I could do Link Card cases every minute of the day, and use every person that works for me, and I'm still not going to be able to get out in front of this thing," he says.
The investigation broadened to include stolen goods. Savini was with Sheriff's police during an undercover operation in which a truckload of baby food -- 7,500 cans of formula – was sold after being reported as stolen.
The grocers were trying to buy the formula for $3 a can, to resell it for about $17 a can.
Police Cmdr. Mike Anton says grocery store operators were being investigated for using fraudulent Link money to fund the formula buy and similar types of crimes.
Anton says the raid also uncovered abuse of Women, Infants and Children (WIC) vouchers. These government-issued vouchers are supposed to be used to buy specific items like baby food.
However, police say store workers are giving out cash for a cut of the voucher money.
Dart says little is being done to expose the massive fraud because there are only a handful of federal investigators in the Midwest.
"If the bigger federal government is not going to get their act together, I'm not going to continue to waste my resources chasing these cases down," said Dart. "I have so many other cases to be working on, whether its gang-related cases, narcotics cases, homicides. You name it, we're really busy."
In all, 13 different people were arrested from six different convenient stores in Chicago, Maywood and Bellwood. Charges range from theft of government property to state benefits fraud to public aid wire fraud.
The U.S. Department of Agriculture has not disclosed how many Link fraud investigators the agency has.
Police say it's not just the store owners and clerks stealing tax dollars. Link Card recipients in need of quick cash will often wait outside grocery stores and offer to sell their cards for about half their worth to random people.
