NW Passage investigated for fraud

Police served a search warrant at the Northwest Passage bar in South Aberdeen Wednesday as part of a 10-month investigation into the owner, who is suspected of illegally using food purchased by welfare recipients using their government food benefits and serving it to bar patrons.

The Department of Social and Health Services Office of Fraud and Accountability has been investigating the 69-year-old man since August of last year, when local grocery stores alerted authorities to the possible fraud. The man is under investigation for food stamp trafficking and unlawful redemption of an EBT card, a Class C felony.

“The stores themselves have been critical because they’ve been cooperative with providing video and other evidence,” Senior Director Steve Lowe said. “Obviously, the stores don’t like to see food benefits abused any more than any other citizens, but they’re on the front lines.”

According to the search warrant, investigators observed the owner at grocery stores with numerous people who purchased commercial-sized food with government food benefits, paid for with debit-style EBT cards. They also saw the man put the items into his vehicle then unload them at the bar.

“These food items would then be used at his place of business as menu items,” a press release stated.

Lowe said this is the first time he’s heard of such an arrangement. More typically, when EBT cards are involved in fraud, it’s a case of welfare recipients selling them outright for cash.

“This is unusual in that the food was actually being purchased by the card holder, who was allowed to purchase the food, but was then delivered to a third person,” he said.

If food benefits are used by someone other than the person to whom they were issued, or that person’s family, it could be a crime.

“That’s called illegal redemption, and that is also a felony,” Lowe said.

DSHS Media Relations Manager Kathy Spears said part of the ongoing investigation will involve determining exactly what the arrangement was between the owner and the people using their EBT cards.

“Right now we’re looking at them as exploited clients, but it depends on what they got back from cooperating with the owner,” she said.

If the people receiving food benefits are found to have traded them for some kind of monetary gain, they could get temporary sanctions on their benefits or lose them entirely.

On Wednesday, investigators searched the bar with assistance from the Grays Harbor Drug Task Force, Aberdeen Police and the Washington State Liquor Control Board.

Lowe said they found large amounts of meat, produce, eggs and other perishables which were documented and donated to a local food bank. Non-perishable items are still held in evidence.

Four EBT cards were seized, along with what investigators believed to be prescription narcotics. They were not in prescription bottles with patient names. The search warrant was updated and the Grays Harbor Sheriff’s Office took the drugs and two firearms found on the premises.

Lowe said the case will be forwarded to the Grays Harbor County Prosecutor sometime in the next few weeks.