Businesses on camera trading cash for food stamps



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Posted on October 5, 2010 at 10:00 PM

Updated Tuesday, Oct 5 at 11:45 PM

SEATTLE -- The businesses are paying 50 cents on the dollar, in violation of state and federal laws. The rip-off of the publicly supported program is drawing food stamp recipients from all over the region to Seattle’s International District, where this underground economy is flourishing.

How it Works

A man who we’ll call “Rob” explained to us that people ride into the International District on the main bus line through the intersection of 12th and Jackson in Seattle.

“They're coming from all over,” says Rob. “They're coming from Kent, from the Eastside, from Bellevue…"

Like Rob, they are carrying a Washington Quest card, which is the modern day version of food stamps. Our hidden camera follows Rob into the Hop Thanh Supermarket at 1043 South Jackson Street.

“You just walk in there and you say 'food stamps',” says Rob. “A lot of times, the people approach you.”

Sure enough, once inside the Hop Thanh, Rob is directed to the cashier who swipes his Quest card in the card reader next to her cash register. The store charges $50 to Rob’s food stamp card.

If you’re not looking closely, you won’t see what he gets in return. On his way out, a second woman at the front door is trying to shield a handful of cash from anyone who may be watching.

"She'll slip you the cash,” says Rob, after the woman discreetly placed the money in his hand.

Rob walks away with $25 cash.

Hop Thanh paid $25, but has $50 of Rob's food stamps to redeem through the federal government’s food program. The store has used tax dollars to double its money.

It's a profit-margin several businesses in 12th and Jackson area can’t resist.

Across the street from the Hop Thanh, Seattle Chinese Herb and Grocery only recently opened for business. But employees are already seasoned experts.

One woman behind the counter swipes Rob’s Quest card and another quickly moves in to hand off $25 in cash. The receipt they hand Rob clearly tells merchants in the food stamp program that they are not to be traded for cash or alcohol. That's exactly why addicts in particular will trade stamps for half their value in cash.

"A lady I know has three kids,” says Rob.“ She does this, spends her money on crack and feeds her kids out of the food bank."

Restaurants cannot accept food stamps, but that's not stopping one long-time eatery from cashing in.

“You approach their back door,” says Rob as he walks behind the Four Seas Restaurant. “You knock on the back door.”

It's literally a back-alley deal made with the man who answers the rear door at the Four Seas. There’s a house minimum for this deal -  $100 in food stamps. Rob is instructed to wait in the alley. A few minutes later there's another quick hand-off. The man Rob met moments earlier at the restaurant’s back door walks by without ever making eye contact and stuffs $50 into Rob’s hand.

Rob says he’s seen lines of food stamp recipients form at these businesses during the first few days of each month when state benefits are distributed.

We returned to the Hop Thanh, this time with our camera in full view. We asked the woman at the front door if she’s been paying cash for food stamps. “No, no, no,” says the woman, who identified herself as Ahn Nguyen. But our undercover video clearly shows her handing cash to Rob.

“Are you sure you’re telling me the truth?” asks the KING 5 reporter.

“I tell you the truth,” answers Nguyen. “I don’t buy nothing,” Nguyen says, claiming to be just a customer at the store.

But we found otherwise. Nguyen is known on the streets as “Momma." For days, we watched her work in front of the Hop Thanh Market with cash in hand. She was the one who paid Rob after a store clerk scanned her card.

The Arrests

Nguyen didn’t convince us – or the Feds – who on Tuesday put her in handcuffs and charged her with food stamp fraud.

Federal agents raided both the Hop Thanh and the Chinese Herb and Grocery which prosecutors say redeemed $2 million in food stamps in one year alone.

“Our agents have analyzed those reports and have determined that a vast majority of those likely were fraudulent,” said Assistant United States Attorney Kate Crisham.

What’s next?

Have the feds now stamped out food stamp trafficking in Seattle?

Maybe not. Blocks away from Tuesday’s raid, a line of men waits at the back of another business where we recorded more food stamp fraud this summer. And the man behind that scheme is still on the street.

Watch KING 5 News Wednesday at 10pm on KONG and 11pm on KING for our continuing investigation “Their Crime, Your Dime”.