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Shop owner's wife accused of food-stamp fraud

Posted at 11:56 PM, Dec 15, 2015

COVINGTON, Ky. -- The wife of a Covington shop owner is accused in a federal indictment of committing food-stamp fraud for more than three years, netting her hundreds of thousands of dollars in money the federal government says she never should have gotten.

Phyllis Tyler faces six counts in the indictment filed Dec. 10.

According to the federal government, Tyler's husband owns A & E Fashion's and Beauty Supply on Madison Avenue. The business was licensed to accept food stamps in March 2010.

Starting in January 2012, the indictment states, Phyllis Tyler would take food-stamp cards from A & E customers, get the card's PIN, and pay customers for 50 percent of the card's balance. The indictment claims that sometimes, she made the exchange herself, and other times, she had A & E employees do it.

Then, according to the indictment, Tyler would redeem nearly the entire balance of the cards either by swiping them at A & E -- so that the shop's bank account would get reimbursed for the sales -- or by using the food-stamp cards at Sam's Club and Kroger.

Tyler bought food-stamp cards for more than half-off their value from confidential informants in 2014, according to the indictment, paying $90 cash for one worth $197.21 and $100 cash for another card worth $212.

In all, the federal government claims Tyler brought in $408,614.40 directly or indirectly through the food-stamp scheme.

If convicted, she faces up to five years in prison and a $250,000 fine on a charge of conspiracy to commit offense or to defraud the federal government; 20 years in prison and a fine of up to $250,000 on the charge of unauthorized use of benefits; and 10 years in prison and a $250,000 fine on each of four counts of engaging in monetary transactions in property derived from unlawful activity.

WCPO attempted to reach Tyler for comment on the charges. She is scheduled to appear in federal court Thursday.

Though Tyler's husband wasn't named in the indictment, it notes that "a licensed vendor at an EBT (food stamp) retailer agrees to be held liable for all actions of his/her employees regarding the food stamp program, including all acts of fraud and trafficking."