Multi-Million Dollar Welfare Fraud Scheme Runs Rampant Though New York

Welfare is intended to help those in need. It provides a minimal level of well-being and social support for all citizens. It helps the heavily burdened and low privileged to survive. It’s a form of public aid, like a crutch for the less fortunate, a crutch that some people choose to take advantage of, until their luck runs out.

A multimillion-dollar welfare fraud scheme that has been common in Asian communities throughout New York has come to an end. Authorities raided nearly two dozen delis and bodegas across Brooklyn, Queens and Manhattan Wednesday in a joint operation between the federal Department of Homeland Security Investigations, the state Department of Health and the state Attorney General’s Office that have been working on the case together, the New York Post reports.

Sixteen separate store owners were charged with allegedly purchasing customers’ Woman, Infants and Children (WIC) vouchers for a percentage of the cash value. They would then pocket their own cut of the money, which generally amounted to roughly 20 percent, when the government later reimbursed them for the coupons. The charges range from conspiracy to commit theft of government funds to money laundering.

In total, 25 store owners were taken into custody in connection with the the fraud scheme, while more arrests are expected to come. In addition, several hundred thousands of dollars were seized from various personal and business bank accounts, although authorities estimate that the scam has generated nearly $30 million since 2009.

The scam was most commonly practiced in Asian neighborhoods like Sunset Park, Brooklyn, Elmhurst, Queens and Chinatown in Manhattan. Some store owners cashed up to 25,000 welfare vouchers per month.

“A lot of these places weren’t just taking a little off the top,” one source said. “This scam was the main source of income for some of these stores. It was fraud on a massive scale.”

In the end, the scam helped the poor help the poor. But that’s not how the system works.