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UNDERCOVER INVESTIGATION NETS 331 FOOD-STAMP DEFRAUDERS

Undercover investigators who looked for food stamp fraud found it at 41 percent of the suspected merchants they examined last month, the Agriculture Department says.

The 331 stores that were cited did everything from buying food stamps for cash to accepting stamps for liquor, cigarettes and clothing, the department said Wednesday.The three-week investigation could result in some of the retailers being fined or barred permanently from the food stamp pro-gram. The investigation targeted stores in and near Jacksonville, Fla.; Seattle-Tacoma, Wash.; and Virginia's Tidewater area.

Undercover investigators from USDA's Food and Consumer Service posed as customers and visited 798 stores.

Of the 331 retailers cited, 82 were accused of trafficking - buying food stamps for cash. The department said the 82 bought $13,500 worth of food stamps for more than $6,900 in cash. Those stores face possible fines or permanent disqualification from the program.

An additional 249 stores sold items other than food in exchange for stamps, investigators said. Of the 249 alleged violations, 113 were serious enough for the stores to face possible fines or temporary disqualification. The other 136 stores will get warnings.

All the stores that were cited had redeemed $11 million worth of food stamps last year. The 82 accused of trafficking had redeemed $3.2 million.

Some 203,000 stores nationwide have permission to take food stamps, a program that will spend more than $26 billion this year to help feed 26 million people.