I-Team: Paying For fraud

CREATED May 9, 2013 - UPDATED: May 9, 2013

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MILWAUKEE - When you ask the federal government about food share fraud, it claims it happens only 1 percent of the time.

But over the course of a seven month-long investigation, the I-Team exposed how millions of your tax dollars are being stolen by people abusing the system. We asked if laws and punishments need to be strengthened.

On Thursday, May 9, 2013 John Sedric Williams strolled in the federal courthouse wearing dark sunglasses. He waved at the I-Team camera. This was his sentencing day. Williams entered a guilty plea one day after the I-Team exposed how he stole nearly a million dollars of your money.

"Once he got this and saw how easy it was selling the food stamps he succumbed to the temptation,” explained Joseph Bugni, Williams’ attorney.

A federal judge sentence Williams to 24 months in federal prison for pretending to sell frozen food to the homeless. Inside the federal courthouse Williams told the court, "I would like to apologize to the community and for wasting tax dollars."

The Fox Pointe man admitted he really just swiped quest cards and paid cash to people for years and pocked up to $800,000. Bugni said it’s unclear if better regulations would have kept Williams from being tempted but he believed greed got the best of Williams. It appears greed and lax enforcement contributed to this case of fraud.

“I think the I-Team is on the right on track and if I were a citizen, I would be upset,” said Alan White, Inspector General of Wisconsin.

Since November 2012, the I-Team has gone undercover showing empty shelves at food share approved stores. We exposed how millions of your tax dollars were stolen thanks to people abusing the system. After we told the USDA about empty stores, approved by the federal government to accept your money, only then did the USDA update its approved vendors list. It begged the one key question: How is this system regulated?

"This is something we need to take seriously,” said Inspector White. As the Inspector General for the state White leads the fight against fraud.

“When the I-Team goes out there and shows some of these things and we get a good reaction we get the additional resources,” said White.

Randy Kong owns and operates a convenience store in Racine. He’s also an approved food share vendor.

“The problem is the vendor stealing not the customer,” said Kong.

He knows cheating the goes on and adds it is easy and tempting.

“All I have to do is swipe in $50, I put $25 in my pocket…that's a hundred percent profit without doing anything,” said Kong.

But he admits it leaves honest store owners in a bind.

"I'm barely getting by. I work 80 hours a week,” explained Kong.

But after talking to many lawmakers from the local, state and federal levels there’s now a new bill making its way through Madison to combat fraud in the state.

“Although we would like to see more federal resources, we'd like to see things move quicker,” said White.

Inspector White said Assembly Bill 82 will give the state more teeth to go after people stealing, people like Williams. The state first alerted the federal government about Williams’ scheme back in June 2011. But instead the USDA gave Williams more food share card readers, which allowed him to steal more money until January 2013.

White said this bill will allow the state to act without waiting on the feds. Williams is set to go to prison in August 2013. Besides the 24 month sentence the judge ordered Williams to pay back $716,000 in restitution. But he’s only obligated to pay $125 dollars a month.

At that rate it will take more than 400 years to pay so essentially that’s money tax payers will never get back.