Two undercover informants entered Jefferson's Liquor Palace and spotted the owner at the register. "Big baby," said one, "we gon' do this?"
The man behind the counter provided $50 in cash, two bottles of liquor, two porn DVDs and two Viagra pills — all in exchange for taking $280.85 off a food-stamp card, say federal investigators who recorded the deal.
Fraud in the government program that helps the poor has added up to nearly $100 million since 2007, according to the U.S. Agriculture Department. It's a fraction of the more than $40 billion spent to feed people each year, but the crime has become a brazen way for some small stores to literally swipe cash from the U.S. Treasury, especially in the Detroit area.
There have been at least 122 fraud-related convictions of owners or employees in the five-state Midwest region since 2007, nearly double the number from 2004-06, says USDA, which oversees the welfare program. About half of those have occurred in southeastern Michigan.
Among the latest cases: A store west of downtown Detroit is accused of selling bags of the exotic chewy drug khat in exchange for food-stamp benefits. Agents in another investigation discovered that cash was wired to Somalia and other countries.
"You have a money machine on your counter. It's a crime of opportunity. We see a lot of cases," said Sheldon Light, head of the economic-crimes unit at the U.S. attorney's office in Detroit.
Debit-style cards replaced paper coupons in the 1990s. Customers step to the counter with groceries, and their card is swiped to electronically record the transaction.
The boldest scam works like this: People hungry for cash ask the store to ring up a small food sale or a phony one. An employee agrees to hand over money, maybe $50, but takes a larger amount off the card for a nice profit, sometimes as high as 100 percent.
Taxpayers get stung when money is transferred to a store's bank account from the U.S. Treasury.
"When times get tough, people do desperate things," said Doraid Markus, a defense lawyer who has represented merchants.