Pat Lu, 48, pleaded not guilty to conspiracy and fraud after police raided his Quincy, Mass. mini-mart and said he was personally skimming $30,000 per month from the federal government’s food-stamp debit card system. Bail was set at $100,000.
According to a report from NECN-TV, Lu was the ringleader of a complex scheme involving at least 53 suspects engaged in welfare fraud that has netted $700,000 in the past year and a half.
Police said customers would come into Lu’s store with debit cards they had received as part of the federal government’s Supplemental Nutrition Assistance Program. Lu would swipe the card, ring up a phony sale for the value of the card, give the customer 50 cents on the dollar in cash, and pocket the rest.
Boston Police Commissioner Ed Davis said there were 31 arrests in Boston on Thursday, though police refused to disclose the locations. The Patriot-Ledger reported that another 21 people have been charged with redeeming their food stamp benefits fraudulently.
Welfare recipients enrolled in the Electronic Benefits Transfer program can receive their entitlement payments — what used to be literal food stamps — on a debit card issued by the state where they live.
A bill in the Massachusetts legislature would reform the debit card program by limiting the cards’ use at cash ATMs and requiring the recipient’s photo to be on the card.
“The word was on the street, so to speak, [was] that you could come to this store and cash in an EBT card,” Massachusetts Attorney General Martha Coakley told the Patriot-Ledger.
WBZ NewsRadio 1030 reported that the Legislature voted in 2011 to prohibit the use of welfare debit cards to buy alcohol, tobacco and lottery tickets. And in March a state commission recommended also banning their use in nail salons, tattoo parlors, strip clubs and casinos.