Disproportionate

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When talking about criminal law, the term “proportionality” is used to convey the idea that a punishment should fit the crime. Today, we look at a case involving an Essex County, New Jersey man who committed food stamp fraud as an employee working in his daughter’s convenience store. The store’s disproportionate sales tipped off the federal government, leading to many visits by an undercover agent. (Enough evidence was gathered to issue a proportionate prison sentence to fit the man’s crime.)

When the owner of the New Jersey convenience store submitted a Supplemental Nutrition Assistance Program (SNAP) application, she signed off on the request knowing the punishment for breaking the government assistance program’s rules and regulations. She also agreed to accept responsibility regarding SNAP program violations. (This includes trading cash for benefits, which is called trafficking.)

The U.S. Department of Agriculture’s Food and Nutrition Service (FNS) keeps a pretty close watch on all SNAP retailers, noticing when unusual transactions are made. The Newark-based convenience store was suspected of trafficking food stamp benefits because there were many purchases worth $50 made. (This is very rare for small convenience stores because they don’t usually carry eligible food items worth this amount of money.) The government sent in an undercover investigator to check the situation out.

Electronic Benefit Transfer (EBT) cards make it very easy for food stamp beneficiaries to pay for eligible purchases at participating retailers. (It’s also easy to use EBTs to illegally exchange cash for government benefits.) Over three years, the Essex County man who worked at his daughter’s convenience store, allowed customers to exchange their EBT benefits for cash. (Nearly $900,000 to be exact.)

Court documents give multiple examples of transactions involving more than $50 at the convenience store. Some of the purchases included SNAP-eligible items, but the value of those items was much less than the total cost. That’s where the cash was exchanged. (The benefits were siphoned out of the SNAP program and deposited into the small store’s bank account. The storeowner kept approximately 70 percent of the benefits and the purchaser kept the other 30 percent.) The FNS had plenty of supporting evidence after an undercover agent made more than 20 such illegal purchases.

The 54-year-old fraudster from Newark pleaded guilty to food stamp fraud and was sentenced to 18 months in prison. This happened after his daughter also pleaded guilty to the same crime. (She and her father exchanged more than $885,000 in SNAP benefits for cash over seven years.) The daughter received a two-year prison sentence, while her father also received two years of supervised release and must pay restitution of $573,199. (That sounds like a fair punishment that fits today’s crime.)

Today’s “Fraud of the Day” is based on an article entitled, “Essex County man sentenced to 18 months for SNAP fraud,” posted on NJToday.net on March 6, 2019.

An Essex County man was sentenced today to 18 months in prison for his role in a food stamps fraud scheme.

Manuel Venegas, 54, of Newark, previously pleaded guilty before U.S. District Judge John Michael Vazquez to an information charging him with one count of Supplemental Nutrition Assistance Program (SNAP) benefit fraud. Judge Vazquez imposed the sentence today in Newark federal court.

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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.