High Volume

Young woman carries a shopping basket filled with fresh produce. She is shopping for fresh fruit and vegetables in a grocery store.

Business owners usually rely on precise pricing methods and high-volume sales to make a profit. (The owner of a Newark, New Jersey-based deli-owner took a different approach to profit in today’s fraud article.) She made nearly $900,000 through food stamp fraud when she exchanged Supplemental Nutrition Assistance Program (SNAP) benefits for cash instead of Italian meatball subs, turkey sandwiches and other deli foods she was approved to sell through the U.S. Department of Agriculture program.

The New Jersey woman’s deli apparently processed a very high volume of SNAP benefits over a seven-year period. Instead of exchanging $885,000 in SNAP benefits for deli items, she swiped Electronic Benefit Transfer (EBT) cards at her retail terminal for a very small dollar amount of eligible items, then provided cash to the customer. Court documents showed that one customer purchased about $5 for eligible items, but the grocery store owner charged $75. (Most likely, the retailer paid about $35 in cash to the purchaser and received a government deposit of $35 in her bank account. A 50-50 split is common in food stamp fraud cases.)

The high volume of sales caught the attention of investigators who then sent a law enforcement agent under cover to make 20 purchases at the deli. The undercover agent repeatedly experienced the illegal practice of exchanging SNAP benefits for cash. (Either the owner’s father, who was employed by his daughter at the deli for about three years, or another employee regularly exchanged money for SNAP benefits.)

The Essex County, New Jersey woman pleaded guilty to SNAP benefit fraud. She was sentenced to two years in prison and two years of supervised release. She was also ordered to pay restitution of $888,487. Her father also pleaded guilty to food stamp fraud and was sentenced to two years of supervised release. His restitution amount is $573,199. (Is it just me, or would it have been much easier to operate a legitimate business selling hoagies?) While this small deli-owner from Newark, New Jersey had a high-volume business, she is paying a very high price for committing food stamp fraud.

Today’s “Fraud of the Day” is based on a Department of Justice press release, “Essex County, New Jersey Woman Sentenced to Two Years in Prison for Illegal Food Stamps Scheme,” released on February 20, 2019.

NEWARK, N.J. – An Essex County, New Jersey, woman was sentenced today to 24 months in prison for her role in a food stamps fraud scheme, U.S. Attorney Craig Carpenito announced.

Maria Teresa Venegas of Newark previously pleaded guilty before U.S. District Judge John Michael Vazquez to an information charging her 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, Senior Director of Strategic Alliances, LexisNexis Risk Solutions - Government

Larry Benson is responsible for developing strategic partnerships and solutions for the government vertical. His expertise focuses on how government programs are defrauded by criminal groups, and the approaches necessary to prevent them from succeeding.

Mr. Benson has 30 years of experience in sales and business development. Before joining LexisNexis® Risk Solutions, he spent 12 years founding and managing two software technology startups. During the 1990s he spent 10 years as a Regional Director helping to grow a New England-based technology company from 300 employees to 7,000. He started his career with Martin Marietta Aerospace working on laser guided weapons and day/night vision systems.

A sought-after speaker and accomplished writer, Mr. Benson is the principal author of “Fraud of the Day,” a website dedicated to educating government officials about how criminals are defrauding government programs. He has co-authored WTF? Where’s the Fraud? How to Unmask and Stop Identity Fraud’s Drain on Our Government, and Data Personified, How Fraud is Changing the Meaning of Identity.

Benson holds a Bachelor of Science in Physics from Albright College, and earned two graduate degrees – a Master of Business Administration from Florida Institute of Technology, and a Master of Science in Engineering from Lehigh University.