get the stamps, and instructed him to go into the waiting room and someone Vould call his name. also told him that regardless of how much in he would get only $50 worth and

food stamps he received from
would receive the rest.

He agreed and went into the waiting room. His name was called and he went into office where filled out some papers. All asked was his name and address. At this time, gave him $186 in food stamps and upon leaving the office he met where he gave $136 worth of food stamps. He returned again the following month the same amount. that his wife

and received the same amount of stamps and gave
The following visit to the Food Stamp Center he told
had another child and

gave him $196 worth in food stamps and receive $146, while he retained $50 worth as usual.

A clerk in the Issuing Office supplied the following information concerning certification and issue procedures:

told him he could also get stamps for other people if he would send them to him. told him that they would get the same deal that he had received. He sent the following people to to obtain food stamps: his uncle, who lives off Avenue (this uncle got his stamps under his right name, but the rest of the people are supplied with fictitious names); an aunt who lives at

of

Street;

; his mother a sister of and who lives at an unknown address off Street. All of the above relatives and friend went to

a friend by the name of

and obtained these food stamps and gave services."

his stamps for "his

a Clerk in the Food Stamp

She recalls an incident where Mrs.
Issuing Office, was authorized an emergency issue of food stamps by

former Caseworker, for the simple reason that she was getting a divorce. She was
told that Mrs.
and Miss
complained to
about this issue. Once again, as far as anyone knows nothing was ever done con-
cerning this matter.

During the time that she was conducting monthly posting on the 811 forms (Receptionist's Daily Tally Sheet), she noticed several times when changes had been made for the purpose of balancing. At that time, emergency issues were not on a fixed basis. The purchase price on the amount of coupons issued fluctuated. Therefore, the coupon figures could be changed to balance the books. For example, if a person was supposed to receive $56 in coupons for $3, and the cashier overissued a $20 book, the $56 would be changed to $76. This would take care of the issuance and the cashier's 812 (Cashier's Daily Report) would not reflect an overissue, but instead would balance. The ones that she has seen where changes were made were either in handwriting.

or Mrs.

The investigation is continuing in close liaison with the United States Attorney to determine dollar loss resulting from the scheme and identify other persons who have participated. Separate reports will be issued covering the several matters now under investigation.

FRAUDULENT ACQUISITION OF AUTHORIZATIONS TO PURCHASE FOOD STAMPS AND TRAFFICKING IN FOOD STAMPS, SACRAMENTO, CALIF.

(Case No. S-2747-2)

former supervisor in the Sacramento Department of Social Services, Food Stamp Unit, was convicted by the State on a charge of embezzlement involving the illegal acquisition of authority to purchase food stamp cards (ATP). Seven others, including relatives and coworkers, were also found guilty on similar counts.

Mrs. admitted to embezzling over $90,000 in ATPs during the period July 1969 through February 1971. The ATPs were

subsequently converted into food stamps which were either sold at a discount or used for food. She said that she was able to successfully embezzle such a large amount because of the lack of controls, supervision, and interest on the part of her superior in the Department of Social Services.

State authorities believe the total amount embezzled may exceed $250,000 based upon a known figure of 246 ATPs fraudulently cashed and recovered during a 7-month period. These ATPs were worth over $27,000. A complete check for all fraudulent ATPs redeemed between July 1969 and February 1971 was not made by the State investigators. A supplemental investigation was initiated and the following statements were taken from two of the co-conspirators:

Mr. X

I first became involved in the illegal cashing of ATPs 6 months after the food stamp program in Sacramento started in the spring of 1968. My mother,

would give me one or two ATPs per month to buy food for my wife and myself. I would cash the ATPs myself using the last name that appeared on the ATP and a different first name. Sometimes I would use fictitious names but I do not remember the names. I would go to the bank and show them the identification card that came with the ATP. They never asked for additional identification. About the time of my sister's wedding in the summer of 1969, I started receiving 8 or 10 ATPs per month from my mother ($500 or $600). I went along at this level for the next 6 or 8 months. After the audit conducted by the U.S. Department of Agriculture we quit for 3 months. The amount then gradually increased to 20 ATPs per month ($3,000) to me. I went along at this level for the next 6 or 8 months to the fall of 1970. The last 3 or 4 months of the operation I had cashed approximately $30,000 worth the ATPs (face value). I believe I received approximately $60,000 (face value). I received $25,000 from the operation and received approximately $25,000 I would pay my mother $100 for each $1,000 in ATPs.

In the fall of 1970, I got

to cash ATPs for me. I had sold stamps

to him before that and got narcotics from him for stamps. I have no idea who he sold the stamps to.

My mother got the ATPs at the Welfare Department in Sacramento, where she worked, by duplicating legitimate ATPs with high stamp value (large number of stamps for a low purchase price). She said she did something with the record books so they would not get caught but I do not know what she did.

Between my mother, myself,

$150,000 to $200,000 in ATPs (face value)."

Mr. Y

I first became involved in the cashing of illegal ATPs in January or February 1970. I was a heroin addict and I had known for approximately asked me

two and a half years prior to this. He was also on drugs. to cash ATPs for him. He paid me with drugs or food stamps to live on. I cashed ATPs for him twice a month for four months. I would cash 35 to 40 ATPs each time for a value of approximately $100 each ATP. I cashed a total amount of $15,000 face value. I know of no other persons in family involved in cashing illegal ATPs. I met at one time but I do not know his connection. I started re

Approximately one year prior to cashing ATPs for ceiving food stamps from I received food stamps from

--)

approximately ten times during the year and would pay him 50¢ on the dollar. During that time I was living at Sacramento and was buying my food at In March or April 1969 asked me if I had any food stamps to sell. I had been buying food there approximately ten months prior to this and using food stamps. He purchased approximately $1,500.00 in food stamps from me prior to the sale that resulted in his arrest. He also purchased a color TV from me in March or April of 1970 and paid me $120.00 in cash. He knew the TV was stolen. I purchased the TV from for $100.

purchased stamps from me 12 or 15 times and would pay me 50¢ on the dollar. This is the only store that I sold food stamps to. I heard that someone stated I had been selling stamps at in Sacramento but this is not true. I believe a was also selling food stamps to but

I am not sure. He lives near

store.

I have never heard of

situation. I had no idea where

most of the narcotics I used from narcotics.

and I do not know his connection in this: was getting the ATPs. I purchased I have no idea where he got the

He further stated orally as follows:

He sold food coupons to several hippie type individuals but does not remember their names as his mind was clouded due to the use of heroin. He does remember selling food coupons to a a couple of times for a total of $100. He wanted name left out of his sworn statement for fear of reprisal. He has been off heroin for three years and has attempted to straighten himself out. He did not want trouble from and his friends.

-"

FOOD STAMP PROGRAM BOGALUSA AND FRANKLINTON, LA.-MISAPPROPRIATION OF FOOD COUPONS

and Mrs.

(Case No. T-2741–26)

Examination of over 16,000 Authorization of Purchase (ATP) Cards, executed from March through August 1973, disclosed 239 cards, which were negotiated through FSIŎ employees Mrs. and former FSIO employees Mrs. Bogalusa, and Miss Covington, Louisiana, contained alterations indicating misappropriation of $8,700 in food coupons.

--

Twelve food stamp recipients furnished statements of having purchased less than their full allotment and less than that shown on their ATP Cards as having been purchased. Four of the twelve recipients purchased coupons at FSIO windows operated by Mrs. during April through October 1973, in which a total of $202 worth of coupons were misappropriated. Eight of the twelve recipients purchased coupons at FSIO windows operated by Mrs. during September 1972 through September 1973, in which a total of $798 worth of coupons were misappropriated. The three FSIO employees, Mrs.

and Mrs.

Mrs.

were suspended on November 28, 1973, by

the

MRS.

Police Jury.

AND MRS.

CLERKS, FLOYD

COUNTY, FOOD STAMP ISSUANCE OFFICE, PRESTONSBURG, Ky.— SHORTAGE OF FOOD STAMPS AND FUNDS

Mrs.

(Case No. C-2741-14)

and Mrs.

former Control Clerk

of the Public Assistance Office who resigned in May 1971, said they inventoried Mrs. food stamps at the Prestonsburg bank in March 1971, and discovered a shortage of over $8,000, which was made up by Mrs. with food stamps which she told them

she had hidden in the Prestonsburg issuance office. Mrs.

and Mrs. said that they had left food stamps in the issuance office without their supervisor's knowledge, in order to avoid returning them to the bank at night.

Between the months of May 1968 and September 1969, cash deposited in banks was $12,208.75 less than the total of Authority to

Purchase Food Stamp (ATP) cards issued in the county, while food stamp issuance errors totaled $14,800. Mrs. daily issuance records showed substantial agreement with corresponding ATP card totals, while Mrs. daily records showed numerous and Mrs.

discrepancies and alterations. Mrs. another control clerk, said they had compared monthly figures with Mrs. to see that all totals agreed with figures on monthly reports prepared by Mrs.

Since it appeared that one or both issuance clerks had the opportunity to pocket food stamp recipients' money and destroy ATP cards, 34 recipients whose household control cards showed they had missed purchasing their monthly quotas of food stamps were contacted. Twenty-seven of these said they had not missed their purchases. In August 1971, an audit of the Floyd County food stamp issuance office at Prestonsburg, disclosed shortages of $26,500 worth of food stamp coupons and $12,200 in cash.

GARY IND.-ISSUANCE OF FALSE FOOD STAMP
CERTIFICATION DOCUMENTS

(Case No. C-2742-6)

A Supervisor stated that:

On June 26, 1972, I discovered several fraudulent Household Issuance Record Cards (FS-8 cards), against which $1,488 worth of food stamps were issued for a cash outlay of only $18, resulting in a U.S. Department of Agriculture bonus of $1,470. I checked these cards out and found that the recipients to whom they were made out were not known at the addresses indicated on the cards, and there were no applications or case records in file to support the cards. All of the cards bore the initials of Case Aide Mrs. which indicated the cards

were made up by her.

The next day, June 27, 1972, I went around and visited each of the addresses on the FS-8 cards with the assistance of a General Student Assistant

in the office. I found that the persons whose names appeared on those cards were not known at those addresses. When I returned to the office I ordered a check of all FS-8 files, which produced yet another card with initials as the maker, and

out in the name of

name as the proxy. This card was made East Chicago, which also failed to check out.

A purchase had been made on this card on June 23, 1972.

The total amount of food stamps purchased on the aforementioned FS-8 cards was $3,350 for a cash outlay of only $68.50, resulting in a U.S. Department of Agriculture bonus of $3,281.50. Another $392 worth of food stamps would have been purchased for $10 cash had not Mrs. stopped the transaction.

individual who had purchased the meat for use in his establishments with food coupons and that

owner of

was in no way involved. Eureka and

were interviewed on January 20 and 23, 1975,

at their place of work and stated:

A Mexican-American man had been coming to their establishment on frequent occasions during the past two years to purchase meat. He would purchase $10-$30 worth of meat at a time. On one occasion, sometime in January 1974, the man asked for an invoice to be made out in the name of the restaurant. could not accept food

that he

The man was told by coupons for meat to be used in a restaurant. The man then stated that the meat was for himself and paid for it with food coupons without further requesting an invoice.

On two subsequent occasions the man purchased meat for which he paid cash and requested invoices made out to the The man has since come

in several times to purchase meat, though in smaller quantities, and used food coupons to pay for it. Neither had been able to learn the name of

the man.

(76)