CINCINNATI, OH (FOX19) - A Cincinnati store owner appeared in federal court in Dayton Monday facing multiple charges claiming he profited from an elaborate food stamp fraud scheme.
FOX19 Investigates looked into the issue and found that the allegations are not isolated. Officials said government benefits fraud is costing taxpayers hundreds of millions of dollars nationally each year.
According to a criminal complaint filed obtained by FOX19, investigators claim Moustaphe Toure committed numerous federal violations related to food stamp fraud - including unauthorized use, acquisition and possession of food stamp cards, money laundering, theft of public money and wire fraud.
Fraud investigators wrote in the complaint filed in United States District Court that the alleged fraud primarily occurred at Toure's Over-the-Rhine convenience store. It occurred first at the Quick Stop Convenience Store in the 1700 block of Vine Street and then at the Sarah Carryout in the 100 block of East McMicken Street. Investigators say Toure relocated his business to the East McMicken location in February 2014.
The complaint reads that Toure was buying food stamp, or SNAP (Supplemental Nutrition Assistance Program), cards from SNAP recipients. Toure allegedly paid for cards in cash. In one case, he allegedly paid with a handgun.
The complaint lays out how federal and state investigators tracked Toure for more than a year. A law enforcement confidential informant conducted multiple "hand-to-hand" transactions directly with Toure. The complaint reads, "During several transactions, the CI (confidential informant) witnessed Toure possessing multiple EBT cards on his person."
Investigators wrote on one occasion that the reliable informant exchanged three Ohio EBT card valued at $1,140.97 in SNAP benefits for $473 in cash. The document reads Toure got the money from "the cash register, his pocket and a shoe box located behind the counter." In another transaction, the informant, who was wearing monitoring equipment, reported he exchanged two Ohio EBT cards valued at $1,000.70 SNAP benefits for $250 in cash and a Jennings .22 caliber handgun.
According to the complaint, subsequent investigation of EBT card transactions conducted by Moustaphe Toure revealed from November 2012 through January 2014, 144 different people traveled on multiple occasions from throughout the Southern District of Ohio in order to illegally traffic EBT cards for cash with Toure at the store. Those individuals allegedly completed approximately 835 fraudulent EBT card transactions with Toure at the store. The total amount of the alleged fraud – more than $106,000.
Toure was arrested at his store on McMicken earlier this month.
"I came to the door and I see all these undercovers and their guns drawn, and I'm like, what's really goin' on?" said Arnetta Baker, who lives a block from the store. "Next thing I know, they brought out Moustaphe."
Toure waived his preliminary hearing Monday. The court detained him pending action by a grand jury. He remains at the Butler County Jail.
State investigators also shut down two corner markets in Toledo in February. Both operators were also accused of food stamp fraud. Each year, there are dozens of similar fraud investigations across Ohio.
FOX19 went undercover at local stores and online to see how big the problem is.
FOX19 uncovered Craigslist ads in cities around the nation, including Cincinnati, with offers to buy food stamps cards. FOX19 texted one ad from an individual claiming to be in Fairfield asking if they bought food stamp cards.
In no time, the individual texted back offering to pay 50 percent of a card's value in cash. The text read:
"Most ppl do 50 % wld you do that?"
Assistant United States Attorney Dwight Keller, who prosecutes Ohio government benefits fraud cases, says it is costing taxpayers millions of dollars every year.
"Before you know it, you're talking real money," Keller said. "A lot of inner-city, small convenience stores have been swept up into the investigations that have been run by our investigators."
According to the United States Department of Agriculture, last year, about 46 million people – one in seven Americans – received money for food from the SNAP program. The federal benefits used to be handed out as 'food stamps.'
Now, the money is loaded monthly onto EBT (electronic benefit transfer) cards, much like a debit card. Federal data shows that the average person receives about $133 a month. They receive more if they have children.
Last year more than $76 billion was distributed nationally. Of that, a little more than one percent was lost to fraud. Keller said this small percentage translates to $858 million.
Of the three billion Ohioans received, data shows $40 million was lost to fraud. In Butler County, the Sheriff's Office developed the food stamp trafficking program in 2012. The goal of the program, staffed with three full-time investigators, is to stop food stamp fraud in the county.
"It's eating us alive and there's only so much money to go around," said Butler County Sheriff Richard K. Jones.
Jones says SNAP fraud is rampant in Butler County. Approximately 47,000 people received SNAP benefits there last year, that's about $78 million. Jones told FOX19 they've made dozens of arrests. Some retailers have even been banned from the SNAP program for life.
"A small percentage makes it bad for everybody and we're sending a message. If you come to this county and you abuse the system, you'll pay the ultimate price," Jones said.
FOX19 showed the Craigslist ad found to a Butler County Sheriff's undercover investigator. After the tip from FOX19, Monday deputies told us the man we'd been talking to was arrested on an unrelated charge. Their investigation into possible food stamp fraud continues.
The investigator also took FOX19 around and showed some of the mom-and-pop stores they've busted. Officials said it's not just crooked retailers. People sell cards everywhere, including in homes and in parking lots. He told FOX19 many of the people he arrests are selling food stamps for heroin.
"The kids are not eating because these parents are selling their food stamp cards," the investigator said.
"We've had a case where they've been used to sell and purchase a vehicle, firearms and ammunition," Keller added.
Keller said SNAP cards have also been sold for alcohol, cigarettes and synthetic drugs. He says they have even been sold in a sophisticated dog-fighting ring.
Keller adds that the vast majority of people receiving federal benefits are not breaking the law.
"Going in and coming out of Kroger, people want to know, 'Are you buying stamps, Are you selling stamps?'" said Arnetta Baker, the woman who lives near Moustaphe Toure's store. Baker said she and her family receive SNAP benefits.
"We don't sell anything, we gotta' eat," she said. "It's not right to abuse the system, not at all. If you abuse it, you make it hard on the next person."