Newark Man Admits $3.4M Food Stamps for Cash Scheme
NEWARK, N.J. – An Essex County, New Jersey, man today admitted his role in exchanging $3.49 million in Supplemental Nutrition Assistance Program (SNAP) benefits for cash, U.S. Attorney Craig Carpenito announced.
Federal officials say Mr. Juan Perdomo, 60, of Newark, pleaded guilty before U.S. District Judge Esther Salas in Newark federal court to an information charging him with one count of SNAP fraud, one count of engaging in monetary transactions in property derived from SNAP fraud, and one count of aiding in the preparation of a materially false tax return.
According to documents filed in this case and statements made in court:
From October 2015 to September 2018, Perdomo ran M&R Supermarket, a business that was authorized to accept benefits provided by SNAP, formerly known as the Food Stamp program.
SNAP is administered by the U.S. Department of Agriculture. Retail food stores approved for participation may sell food in exchange for SNAP benefits, but may not exchange SNAP benefits for cash.
Every SNAP recipient receives an Electronic Benefit Transfer (EBT) card, similar to a debit card, to use to make purchases.
Every retailer authorized to accept SNAP benefits has an EBT terminal. Food purchases are made by swiping the card at the terminal.
After the customer enters 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.
Law enforcement agents verified the fraudulent exchange of SNAP benefits for cash through the use of an undercover law enforcement agent who engaged in 11 “purchases” at M&R Supermarket, where Juan Perdomo and his son, Jose Perdomo, exchanged money for SNAP benefits.
The bank account of M&R Supermarket showed numerous cash withdrawals in excess of $10,000 by Juan Perdomo and his wife, Maria Rodriguez, as well as several cashed checks in excess of $10,000 by Jose Perdomo.
In September 2018, Juan Perdomo, Jose Perdomo and Maria Rodriguez were charged by complaint with SNAP benefit fraud and conspiracy to commit wire fraud. They were also charged with money laundering conspiracy. Jose previously pleaded guilty to SNAP benefit fraud and money laundering. The charges against Rodriguez remain pending, and they are merely accusations; the defendant is presumed innocent unless and until proven guilty.
The count of SNAP benefit fraud carries a maximum penalty of 20 years in prison and a fine of $250,000, or twice the gross pecuniary gain or loss. The count of engaging in monetary transactions in property derived from specified unlawful activity carries a maximum penalty of 10 years in prison and a fine of $250,000 or twice the value of the property involved in the transaction.
The count aiding in the preparation of false tax return carries a maximum penalty of three years in prison and a fine of $250,000 or twice the value of the property involved in the transaction. Sentencing is scheduled for Jan. 8, 2020.
U.S. Attorney Carpenito credited special agents of the U.S. Department of Agriculture – Office of Inspector General, under the direction of Special Agent in Charge Bethanne M. Dinkins, special agents of the U.S. Department of Homeland Security, Homeland Security Investigations (HSI), under the direction of Special Agent in Charge Brian A. Michael, and IRS - Criminal Investigation, under the direction of Special Agent in Charge John R. Tafur, with the investigation leading to today’s guilty plea.
The government is represented by Special Assistant U.S. Attorney Perry Farhat of the U.S. Attorney’s Office Criminal Division in Newark