A Wilkinson County man has pleaded guilty in what authorities said was the largest food stamp fraud investigation in Georgia’s history.
Elbert Eugene Shinholster, the owner of Shinholster’s Grocery and Meat Market in Irwinton, pleaded guilty to charges against him in U.S. District Court on Monday. Authorities said the food stamp fraud and money laundering charges involved a $4.6 million scam.
The Irwinton store was the target of an investigation earlier this year along with a McIntyre convenience store.
The probe, dubbed Operation Handout, uncovered the state’s largest food stamp fraud in terms of monetary loss to state taxpayers, said Ravae Graham, a Georgia Department of Human Services spokeswoman.
Nationwide, 230,000 retailers participate in the U.S. Department of Agriculture’s food stamp program. In 2010, the USDA conducted 5,000 undercover investigations of participating stores, and 14,000 stores were put on a watch list, said Aaron Lavallee, a USDA spokesman.
In a plea agreement filed in court this week, Shinholster admitted that he defrauded the food stamp program of more than $4.68 million during a five-year period by conspiring with nearly 2,000 food stamp recipients.
Food stamp recipients receive an allotted amount of money monthly on an electronic benefit transfer, or EBT, card to buy food from authorized stores. Shinholster’s store had been an authorized store since 1990.
Between June 2006 and March 2011, food stamp recipients would tell Shinholster or his employee how much cash they wanted in exchange for their food stamps, according to court records. On each occasion, the recipient’s card would then be debited as though the person had bought food, but they received a cash payment instead. In exchange, the store also debited 30 percent of that amount from the card as a kind of interest or courtesy charge.
Shinholster admitted that he laundered money he received from the scam by withdrawing money from the store’s bank account that it got from the government program. That money was used to pay out cash to food stamp recipients after the cards were illegally debited, according to the records.
In exchange for his plea, Shinholster and the U.S. Attorney’s Office have agreed that an appropriate sentence would be for Shinholster to serve a term on probation under house arrest and to pay a yet-to-be-released amount of money, according to the plea agreement.
A judge will ultimately decide his punishment. A sentencing date hasn’t been set.
Authorities have seized $209,387 from bank accounts belonging to Shinholster, who initially was arrested in March. They also seized 34 firearms.
When Shinholster is sentenced, seven guns given to Shinholster by his father will be released to a “third party,” and $22,000 of the seized funds will be released to his daughter because the money belonged to her, according to the records.
In a separate case, Alfred “Goop” Boyd, owner of Northwind Mini-Mart in McIntyre and his employee, Chiquita “Kita” Boyd, were indicted Oct. 13 on one count of conspiracy and two counts of food stamp program fraud.
Alfred Boyd is additionally charged with structuring financial transactions, according to the indictment filed in U.S. District Court for the Middle District of Georgia. Chiquita Boyd is Alfred Boyd’s niece.
Both were initially arrested in March as part of the same Operation Handout.
Soon after the EBT program became operational statewide in Georgia in November 2008, patterns of trafficking and misuse became known, according to the Georgia Department of Human Services.
Information from Telegraph archives was used in this report. To contact writer Amy Leigh Womack, call 744-4398.