Welfare Recipients Allegedly Gambled With EBT Money in Florida
Posted on: September 8, 2016, 07:00h.
Last updated on: October 12, 2016, 08:36h.
Welfare recipients in Tallahassee, Florida, have purportedly been using their electronic benefit transfer (EBT) cards to purchase, among other things, alcohol and tobacco, and also used the funds to gamble.
A multi-agency investigation led by the Leon County Sheriff’s Office in Tallahassee has identified 132 suspects involved in an illegal gambling and fraud scheme. Four local residents in Leon County have been arrested on charges of racketeering, money laundering, welfare card fraud, and illegal gambling.
Leon County Sheriff Mike Wood says the operation netted the ringleaders hundreds of thousands of dollars in ill-gotten gains.
Wondwossen Gizaw-Tessema, 57, Eyerusalem Hiluf, 31, Firehiwot Gebre, 35, and Christabel Ekhosuehi, 29, were apprehended by Leon County, with the first three accused of being the ringleaders of the multi-venue enterprise.
According to a press release, the Wondu Marathon Convenience Store, Euro Fashions Boutique, One Stop College Market, Pretty Game Boutique, and Belen Mart businesses were all used as gambling enterprises and EBT exchange centers.
Down with EBT
Law enforcement believes Gizaw-Tessema was the boss of the operation, as he owns several of the businesses involved in the ring. Leon County described the illegal gambling machines as being similar to slots, in that players simply deposited money, hit a button, and won or lost.
A total of 24 machines were apprehended from the Sheriff’s Office raids that occurred in July after obtaining search warrants.
Issued by the Florida Department of Children and Families, EBT cards cannot be used to purchase alcoholic beverages, nor can the funds be spent in bars, liquor stores, adult entertainment venues, or pari-mutuel or gambling facilities.
Gizaw-Tessema created a nifty solution to the EBT regulations by offering cash in exchange for typical essential family supplies. He allegedly gave Costco and Sam’s Club shopping lists to EBT cardholders, and when the welfare recipients returned with the items, he paid them 50 cents on the dollar for the goods.
With cash in hand, many “customers” are suspected of trying to recoup their losses on Gizaw-Tessema’s gaming machines.
Detectives estimate the EBT operation pulled in upwards of $1,000 a day. Financial records show Gizaw-Tessema deposited a total of $1.4 million to four bank accounts dating back to January.
The story out of Tallahassee is certainly not the first time EBT monies have been used to gamble.
A 2010 audit in California revealed that $1.8 million in welfare funds were spent at casinos. And in Seattle, a local news station investigation in 2013 found that $2 million of EBT money was gambled with at Washington casinos.
Congress encouraged states in 2012 issuing welfare money to “maintain policies and practices” that prevent wasteful spending by recipients in “any liquor store, any casino, gambling casino, or gaming establishment.” However, the federal law doesn’t explicitly mandate that states follow the guidelines.
Most state lawmakers have obliged.
Only two states, Minnesota and Texas, do not have any regulations preventing EBT money from being used for gambling. Minnesota does ban EBT cards from alcohol and tobacco purchases, while Texas has no regulations on how one’s welfare money is spent.