Updated 04/14/2011 07:00 PM
Welfare fraud ring busted
Albany County Law Enforcement teamed up to bust a multimillion welfare fraud ring. Several businesses in the county are accused in the investigation. Our Erin Vannella joined us from Albany with the latest.
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ALBANY COUNTY, N.Y. -- Several mom and pop shops in Albany County were raided in an investigation into an alleged welfare fraud ring that netted millions of dollars.
Albany County District Attorney David Soares described it as an illegal card for cash scheme that may have involved hundreds of cardholders. Soares says cardholders would walk into one of four stores, Franze's Market, South Pearl Street Deli, Frank & Giovanni's or New City Market, and sell the cards to the store owner for cash instead of groceries. The stores would then make 30 to 50 cents on the dollar for these food stamp debit cards.
The store owners are charged with grand larceny, but Soares says hundreds more may face charges since his office is working to track down all the cardholders.
"Simply stated, while your average transaction at your average store, that being Price Chopper, Hannaford or one of the other legitimate operations, would total about $5.50, the four stores that I've mentioned, their average transactions were $107.75," Soares said.
Soares says investigators saw customers come and go from stores with no groceries, just cash, and says the stores have been doing this for more than four years.