Buying and selling food stamps for cash is illegal under state and federal law. But that is no problem for Jay and the band of other homeless people who pursue an active trade in cash-for-food stamps at their business address: the HRS office at Sixth Street and Alton Road in Miami Beach. (Florida's HRS is responsible for determining eligibility and administering the federal food stamp program.)
They arrive promptly at 7:00 a.m. every day, when the office opens, to use the bathrooms and set up shop under a shade tree in the adjacent alley. Then they service their clients by taking turns sitting inside the HRS office -- near a sign warning that food- stamp trafficking is a state crime -- and soliciting recipients as they leave the stamp windows, in full view of HRS staff and a security guard. They will shepherd willing recipients to nearby stores that pay 80 percent of the stamps' face value. The stores then share the difference with the runners.
Providing cash to buy alcohol, cigarettes, and other nonfood items that encourage addictions rather than basic nutrition is exactly what the food-stamp program is designed to prevent. The U.S. Department of Agriculture emphasizes this principle by regularly releasing a list of stores caught buying stamps for cash. Working with state and local authorities, USDA agents investigate stores in the cash-for-stamps trade, and Dade County leads the state in food stores kicked out of the stamp program. Since last year, 48 Dade markets have received the ultimate penalty, which can seriously cut into a small store's profits. Only one of those markets was in Miami Beach, where business is still booming at the HRS office, which pours out close to one million dollars in food stamps every month. Stamp traffickers divert enough of that into cash to support their alcohol and cocaine habits.
Marlyn T. Smith, the Miami office program administrator, says she is aware of the alcohol and drug problems of the homeless commune in the alley; some of the homeless, she says, have even been known to smoke crack in the HRS bathrooms. But the idea that her office is headquarters for the business that pays for their addictions comes as a complete surprise. She had never heard of the trafficking until confronted by a reporter.
Smith's policy toward the homeless has been one of concern rather than police action. "It's a very difficult situation with the homeless out there," she admits. "I don't want to be unkind, I don't want to harass them, but they're a problem. My concern has always been more about drug use and abuse [than food-stamp trafficking]." The HRS office staff has attempted to maintain a workable peace with the homeless, trying to keep them from bothering the public without provoking them. According to Smith, some staffers have even brought them clothes and other gifts.
But soliciting the sale of food stamps right there in her office? "I guess we are just naive, unfortunately," Smith concedes.
Such naivete is hard to maintain after spending even one day watching business as usual at the food-stamp office. A three-day surveillance of the HRS office and nearby stores by New Times revealed a steady stream of customers who turned from the stamp windows to do business with the runners, or met them outside in the alley. "Selling your stamps today, Joe?" asked one red-faced woman with a gray ponytail, the apparent leader of the runners, as an elderly man shuffled away from a stamp window. When he agreed, the woman called a runner to take him to a nearby store.
HRS program administrator Smith says she has never had a food stamp recipient complain about the solicitations despite incessant complaints on every other subject, from rude HRS employees to the stinginess of stamp allotments. But it may be the futility of complaining about the obvious that holds back stamp recipients like Steven DeFreze, who cannot believe HRS officials haven't seen the trafficking for themselves. "This makes it hard for guys like me to get any assistance," DeFreze says. "HRS is so afraid of being screwed [by illegitimate food-stamp claims] all the time, but then this is going on right in their lobby."
DeFreze, 32 years old and recently laid off from security work at a South Beach restaurant, has a wife and small son to support. He made three trips to the food-stamp office in the last few weeks to fill out paperwork before his stamps were issued. Each time he was solicited to sell his stamps in the HRS office and again outside in the alley. On his last visit, when he actually received his stamps, DeFreze, at New Times's request, accepted a runner's offer and went as far as the store before breaking off the deal.
A runner cruising the HRS office, chatting with HRS clients and the security guard, saw DeFreze and motioned him into the alley. "Are you looking to sell those?" asked the runner, who can be seen any day hanging out in the alley with Jay and the other homeless people.
They agreed that DeFreze would be paid $190 for his $206 worth of food stamps by a store several blocks away. The runner hurried DeFreze along, past the market Jay uses, toward a rendezvous with his "old lady," who would take him to another store and finish the transaction. "I got to get back," the runner said breathlessly. "I got two more people. I'm going to make [our] weekend money [today]." He boasted that every day he makes at least ten trips to the nearby stores with willing sellers.
When DeFreze got to the market, it was easy to stop the deal before he broke the law: The clerk waved off the runner because there were too many stamp deals taking place in the store at one time. Later the clerk admitted that the store pays runners ten dollars per hundred for bringing the recipients from the HRS office. The store's owner immediately stepped in to say the employee was crazy; the store does not pay cash for stamps.
The market where Jay does business was equally busy on the day his girlfriend demanded the money for her beer habit. Legitimate neighborhood customers lined up at the front counter while Jay, with other members of the HRS homeless camp, stood in a more unruly queue at the back of the store. They were looking for Jose, a short, nervous man who cashes the stamps. "Hey, Jose," shouted one of the runners, "don't ya know you got customers out here?"
Jay passed the time comparing his wad of stamps with the equally thick roll of another runner, and trying to set up a crack purchase with one of the local dealers. Jay had already had a pretty tough day without the demands of his girlfriend, who continued to scream at him from the store entrance until she got her beer money. In the morning, he had mugged an elderly man leaving the HRS office and had stolen his bag, but the old guy chased him through the alleys with pathetic determination. The man got his bag back virtually empty, but Jay had had to work for the contents.
"They call this Little Vietnam," observed the store's manager while standing at the front door. "It's hell out here." He admitted the market bought stamps for twenty cents on the food-stamp dollar, but he dismissed the scam as inconsequential next to the drug dealing going down on the street. For emphasis he pointed out the neighborhood's biggest crack dealer and a seven-year-old girl, who acts as his runner, walking by his store.
Marlyn Smith, who has been in charge of the Miami Beach HRS office for seven years and with HRS for thirty-five years, says she heard more than a year ago that Miami Beach police and the USDA were investigating food-stamp fraud in the local stores. Smith says she also called the police about muggings outside the office, but she never heard the results of either investigation. (According to Greg Shubert, USDA's regional inspector general in Atlanta, there has never been a trafficking investigation in the area of the Miami Beach HRS office.)
Smith says she could hardly have called in the feds because she didn't know what was going on. "I have never heard of solicitation for sale in the alley or in the [HRS] building," she contends. "My reaction is we need to investigate this and take steps to prevent it.
