Three NJ Men Charged with ’SNAP’ Food Stamp Benefits Scheme
CAMDEN, N.J. – Three men were arrested today in connection with a scheme in which they allegedly stole hundreds of thousands of dollars in government funds using fraudulently procured electronic benefits transfer (EBT) cards, U.S. Attorney Craig Carpenito announced.
Federal authorities say Mr. Luciano Estevez, 50, and Mr. Jose Garcia, 52, both of Camden; and Mr. Juan Melo, 56, of Woodlynne, are charged by separate complaints with one count each of conspiracy to defraud the United States and one count each of defrauding the U.S. Department of Agriculture’s (USDA) Supplemental Nutrition Assistance Program (SNAP).
They appeared this afternoon before U.S. Magistrate Judge Ann Marie Donio in Camden federal court. A fourth defendant, Octavio Rodriguez, 50, of Pennsauken, New Jersey, is charged with the same crimes and remains at large.
SNAP, formerly known as the food stamp program, is a program 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 and narcotics.
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. Estevez was able to unlawfully receive through this terminal approximately $110,000 in SNAP funds.
The conspiracy count with which all four defendants are charged 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.
Estevez, Rodriguez, and Garcia each are each charged with a SNAP fraud offense in which the value of the trafficked benefits exceeded $5,000, which 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. Melo is charged with a SNAP fraud offense in which the value of the trafficked benefits is less than $5,000, but greater than $100, which 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.