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2 more arrested in Clearwater food stamp scam

CLEARWATER — A food stamp scam that has already landed a local Quick Check clerk in prison is leading to a massive search and roundup of more than 500 people across the area.

Two Clearwater residents who authorities say illegally exchanged their food stamps for cash and other ineligible goods were arrested within eight hours of each other by Pinellas County sheriff's deputies late Friday and early Saturday. Each was charged with food stamp fraud.

Harold H. Phipps, 55, and Elaine Carlton, 56, face felony charges. Both are accused of taking part in the scam. They are among at least 30 people who have been arrested thus far in connection with the scheme.

The Florida Department of Law Enforcement analyzed the dollar amount of food-stamp-eligible inventory at Clearwater's Quick Check, 701 N Fort Harrison Ave., and determined that the suspects' purchases didn't make sense, said FDLE spokesman Mike Morrison.

The arrests came in the wake of the plea deal and sentencing Friday of former Quick Check employee Naushad Shahabuddin, 34. Shahabuddin originally faced up to 25 years in prison but was sentenced to just 21 months.

Shahabuddin exchanged food stamps for cash at below-value rates and pocketed $130,000, authorities said. For nearly two years, Shahabuddin ran the scam until he unknowingly cut a deal with undercover U.S. Secret Service agents.

Agents raided the store in July 2008. Shahabuddin later pleaded guilty to charges of wire and food stamp fraud.

"Sorry to you, to society and especially to my family," Shahabuddin told U.S. District Judge Elizabeth Kovachevich at his sentencing Friday in Tampa.

Authorities arrested Carlton, 304 S Corona Ave., No. 7, and Phipps, 615 S Evergreen Ave., at their homes.

From January 2006 to June 2008, Carlton sold or traded $2,300 in food stamps, authorities said. From April through July 2008, Phipps improperly used $850 worth of food stamps, according to arrest warrants issued by the Florida Department of Law Enforcement.

Assistant U.S. Attorney Terry Zitek said he believes that 510 food stamp recipients participated in the fraud.

"The purpose of the program was to do good, and you turned it around to do bad," Kovachevich told Shahabuddin at Friday's hearing.

Phipps was released from the Pinellas County Jail on $5,000 bail Saturday; Carlton was released on $3,000 bail Friday.

A phone call to Phipps at home was not returned Monday evening.

Brian Spegele can be reached at bspegele@sptimes.com or (727) 445-4154.

2 more arrested in Clearwater food stamp scam 07/13/09 [Last modified: Monday, July 13, 2009 8:30pm]
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