A multimillion-dollar welfare fraud scheme that has been running rampant in Asian communities throughout the city has been busted, authorities said.
About two dozen delis and bodegas were raided across Brooklyn, Queens and Manhattan Wednesday in a joint operation between the federal Department of Homeland Security Investigations, the state Department of Health and the state Attorney General’s Office that uncovered the endemic corruption, sources said.
Sixteen store owners were charged with allegedly purchasing customers’ WIC vouchers and giving the recipient a percentage of the cash value, court documents state.
The store owners would then pocket their cut of the money — usually around 20 percent — when the government reimbursed them for the coupons, sources said.
WIC, or, Women, Infants and Children, is a federally funded assistance program that helps struggling mothers buy essential items such as infant formula, milk or juice.
Twenty-five store owners were taken into custody in connection with the scam and more arrests are expected. Charges for the 16 store owners who appeared in Manhattan federal court Wednesday range from conspiracy to commit theft of government funds to money laundering.
Several hundred thousands of dollars were seized from various personal and business bank accounts — a mere fraction of the estimated $30 million generated by the fraud since 2009, authorities said.
Sources said the scheme was localized specifically in Asian neighborhoods like Sunset Park, Brooklyn, Elmhurst, Queens and Chinatown in Manhattan, with some stores cashing in as many as 25,000 welfare vouchers per month.
Some of the stores’ operations were so lucrative that they sold almost no groceries at all, one source said.
“A lot of these places weren’t just taking a little off the top,” said one source. “This scam was the main source of income for some of these stores. It was fraud on a massive scale.”