Family Affair

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Prudent senior woman looking at her coupons before paying for her groceries.

Public assistance programs, such as the Supplemental Nutrition Assistance Program, use taxpayer dollars to help the neediest among us get through hard times. It’s part of the safety net that makes for a civilized society—something all Americans are entitled to when their income falls to the point of meeting program qualifications. When people commit fraud against it, it is the same as stealing food from underprivileged people.

Today’s case looks at a Newark, N.J., grocery store manager who took part in a multi-million scheme to defraud the SNAP program. (He didn’t show any compassion for SNAP recipients or taxpayers. I doubt the judge will show any compassion for this fraudster when his sentencing time rolls around either.)

 The man ran the grocery store from October 2015 to September 2018, a period when the market was accepting SNAP payments via Electronic Benefits Transfer (EBT) cards. The SNAP program, formerly known as food stamps, allows users to purchase designated food items with government benefits. (Keep in mind that EBT card benefits may NOT be exchanged for cash.)

Even though the store manager knew he would be violating SNAP program rules, that didn’t stop him, nor his son from exchanging SNAP benefits for cash with their customers. (Otherwise, you wouldn’t be reading about it today.) Ultimately, they also exchanged government benefits for cash with an undercover law enforcement agent on nearly a dozen occasions, according to federal law enforcement. (Oops!)

 The store’s bank account showed numerous cash withdrawals in excess of $10,000 by the store manager and his wife, as well as several cashed checks in excess of $10,000 by his son. (Note to self – if you want to hide a fraud scheme, don’t cash checks in the amount of $10,000 or more. Large transactions set off alarms.)

The manager pleaded guilty to SNAP fraud and aiding in the preparation of a fraudulent tax return. He is scheduled to be sentenced in January. His son previously pleaded guilty to SNAP benefit fraud and money laundering. (Nothing like making defrauding the government a family affair).

Today’s Fraud of the Day comes from the article, Newark Merchant Admits Taking Part In $3.5 Million Food Stamp Scam,” published in The Essex (N.J.) Daily Voice, on Sept. 23, 2019.

The former manager of a Newark supermarket admitted taking part in a multi-million scheme to defraud the federal Supplemental Nutrition Assistance Program, U.S. Attorney for New Jersey Craig Carpenito said.

Juan Pedorno ran M&R Supermarket from October 2015 to September 2018, a period when the market was accepting SNAP payments via specially issued debit cards. The federally funded SNAP program, formerly known as food stamps, allows users to purchase food but the benefit cannot be exchanged for cash.

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Larry Benson
Larry Benson is currently the Director of Strategic Alliances for Revenue Discovery and Recovery at LexisNexis Risk Solutions. In this role, Benson is responsible for developing partnerships for the tax and revenue and child support enforcement verticals. He focuses on embedded companies that have a need for third-party analytics to enhance their current offerings.