CAMDEN, N.J. – A Camden man today admitted his role today in a scheme to steal hundreds of thousands of dollars in government funds using fraudulently procured electronic benefits transfer (EBT) cards, U.S. Attorney Craig Carpenito announced.
Federal officials said, Luciano Estevez, 50, pleaded guilty by teleconference before U.S. District Judge Renee Marie Bumb to an information charging him with one count of conspiracy to defraud the United States and one count of defrauding the U.S. Department of Agriculture’s (USDA) Supplemental Nutrition Assistance Program (SNAP).
Estevez and his co-defendants: Jose Garcia, 52, of Camden; Octavio Rodriguez, 51, of Pennsauken, New Jersey; and Juan Melo, 56, of Woodlynne, New Jersey, were previously charged by separate complaints in August 2019 with participating in the conspiracy and defrauding SNAP. Melo previously admitted his role in the scheme when he pleaded guilty on April 28, 2020, to an information charging him with participating in the conspiracy and defrauding SNAP.
Formerly known as the Food Stamps program, SNAP is administered by the USDA to assist low-income individuals and families with the purchase of groceries and food items.
SNAP recipients receive EBT cards, similar to commercial debit cards, to make food purchases. Retailers authorized to accept SNAP benefits have EBT terminals to process the food purchases.
Food purchases are made by swiping the EBT card at the terminal, and having customers enter a Personal Identification Number (PIN). The EBT terminal verifies the PIN, determines whether the customer’s account balance is sufficient to cover the proposed transaction, and informs the retailer whether the transaction should be authorized or denied.
The amount of the purchase is deducted electronically from the SNAP benefits reserved for the customer and the purchase amount is credited to the retailer’s designated bank account.
According to documents filed in this case and statements made in court:
Estevez, Rodriguez, Garcia, Melo, and others allegedly targeted low-income individuals who possessed or had access to EBT cards, and unlawfully purchased the cards from these individuals in exchange for cash and controlled substances.
Two confidential sources working with law enforcement engaged in 43 controlled transactions involving EBT cards totaling more than $40,500, which they exchanged for cash and controlled substances, including prescription opioids.
The defendants used the unlawfully procured EBT cards to purchase bulk goods and food items from large national superstores.
These goods and food items were then resold in small convenience and grocery stores owned or affiliated with the defendants or their associates, resulting in a profit for the defendants.
Hundreds of EBT cards fraudulently procured by the defendants were used at these superstores, resulting in the misappropriation of approximately $150,000 in government funds.
Estevez also unlawfully procured an EBT terminal registered to a superstore in Philadelphia, Pennsylvania to use at his small grocery store in Camden, which was not registered as a lawful SNAP merchant in the USDA program.
Through this terminal, the scheme netted approximately $110,000 in SNAP funds.
The conspiracy count to which Estevez pleaded guilty carries a maximum penalty of five years in prison and a fine of $250,000, or twice the gross gain or loss from the offense.
The SNAP fraud offense to which Estevez pleaded guilty carries a maximum penalty of 20 years in prison and a fine of $250,000, or twice the gross gain or loss from the offense. Sentencing is scheduled for Sept. 11, 2020.