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Office of Inspector General / U.S. Department of Agriculture 

Investigations Bulletin

March 30, 2017

Storeowner Sentenced to Incarceration and Restitution of $2.5 Million for Supplemental Nutrition 

Assistance Program (SNAP) Trafficking—Ohio

On February 21, 2017, in U.S. District Court, Northern District of Ohio, a storeowner was sentenced to 

33 months in prison and ordered to pay $2.5 million in restitution for SNAP fraud. As part of this 

investigation, 29 SNAP recipients were charged with SNAP fraud and were sentenced to a combined total 

of 22 months in prison, 78 years of probation, and ordered to pay $214,000 in restitution to FNS.1 OIG’s 

investigation disclosed that the store owner was trafficking SNAP benefits. The estimated fraud amount 

was approximately $2.6 million. At an earlier stage of this SNAP investigation, during the execution of a 

search warrant at the storeowner’s residence, he pointed a firearm at OIG agents and local law 

enforcement officers. For this action, the storeowner was charged with assault on a Federal officer and 

possession of a firearm in connection with a violent felony. He was convicted of these charges in 2015, 

and was sentenced in 2015 to 7 years in prison.

Producer Sentenced and Ordered to Pay Restitution for Fraud Related to Crop Insurance—

Wisconsin

On February 13, 2017, in U.S. District Court, Western District of Wisconsin, a producer was sentenced to 

pay $228,000 in restitution, which was collected at sentencing, and he was ordered to pay a $20,000 fine 

within 90 days. The judge also ordered him to serve 1 year of probation and 6 months of GPS-monitored 

home confinement at his expense. The defendant agreed in the plea to permanent debarment from 

participation in all USDA programs. This OIG investigation, initiated to determine if this producer was 

committing crop insurance fraud, confirmed that he submitted false statements to his insurance company 

with the intent to bolster his indemnity payments. He pled guilty in November 2016.

Former County Executive Director Sentenced to Incarceration and Restitution of $146,000 for 

Fraudulent Payment Scheme—South Carolina

On February 9, 2017, in U.S. District Court, District of South Carolina, a former county executive 

director (CED) was sentenced to 27 months in prison and ordered to pay approximately $146,000 in 

restitution to the Farm Service Agency (FSA). This investigation was conducted to determine if the CED 

authorized approximately $161,000 in fraudulent payments from FSA’s Emergency Conservation 

Program to family members. The CED and seven of her family members were indicted on charges of 

conspiracy, theft of government money, and wire fraud. Three other defendants entered into pre-trial 

diversion agreements in 2016, which required them to pay restitution in the range of $3,150–$20,700.2

Producer Sentenced and Ordered to Pay $321,900 in Restitution Related to Sale of Mortgaged 

Commodities—Iowa

On January 20, 2017, in U.S. District Court, Southern District of Iowa, a farmer was sentenced to 

15 months in prison and was ordered to pay $321,900 in restitution to FSA. This investigation was 

conducted to determine if a farmer converted property which was mortgaged to FSA, and failed to apply 

the sales proceeds to his FSA loans. After he defaulted on one of the loans, FSA personnel conducted a 

spot check of his grain and determined that 150,000 bushels of corn and 5,000 bushels of soybeans were 

1 All defendants in this case have pled guilty or were convicted.

2 One defendant (the CED’s husband) was found guilty and is awaiting sentencing. Indictments were dismissed against 

two defendants and one defendant was acquitted.
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missing. The OIG investigation determined that he sold the majority of the pledged grain before taking 

the loans out in March 2015, and falsified several loan documents in the process. He pled guilty to three 

counts of false statements and overvaluation of securities. 

Defendant Sentenced and Ordered to Pay $1.5 Million in Restitution for Role in Broad SNAP 

Fraud Scheme—New York 

On January 11, 2017, in U.S. District Court, Eastern District of New York, a former account executive for 

a third party processor was sentenced to 21 months in prison and was ordered to pay $1.5 million in 

restitution. The defendant had been employed by a third party processor for electronic benefit transfer 

(EBT) cards. He sold EBT terminals to stores authorized to participate in SNAP in the New York City 

area. OIG’s investigation revealed that he was also selling EBT terminals to stores not authorized to 

participate in SNAP. From 2012 to 2014, he provided EBT terminals to approximately 50 unauthorized 

stores that used the terminals to redeem SNAP benefits totaling approximately $6.5 million. Eight of the 

stores where search warrants were executed also exchanged SNAP benefits for U.S. currency and 

ineligible items during the course of our investigation. The defendant was charged with theft of 

Government funds, wire fraud, and a criminal forfeiture allegation. He pled guilty to wire fraud. 

Prosecutions against other stores in this case are pending. 

Feeding Program Sponsor Sentenced and Ordered to Pay $380,000 for Fraud Related to Child 

Nutrition Programs—Arkansas

On January 10, 2017, in U.S. District Court, Eastern District of Arkansas, a feeding program sponsor was 

sentenced to 2 years in prison and was ordered to pay $380,000 in restitution, jointly and severally. This 

case is one of many cases in Arkansas in which multiple subjects conspired to defraud the Food Nutrition 

Service’ (FNS) Summer Food Service Programs and At-Risk Afterschool Programs. The program 

sponsor claimed to feed over 240 children per day at each of two feeding sites. The OIG investigation 

determined that that no more than 15 children were fed per day at either site. The program sponsor 

received approximately $380,000 in USDA funds intended to feed needy children. The program sponsor 

paid another defendant approximately 40 percent of these funds. In exchange, that defendant’s spouse (an 

ADHS employee) approved the sponsor’s application and shielded him from Arkansas Department of 

Human Service scrutiny.3

In 2016, the program sponsor pled guilty to conspiracy to commit wire fraud. 

Storeowner and Store Manager Sentenced and Ordered to Pay $722,000 for SNAP Fraud—

Michigan

On January 11, 2017, in U.S. District Court, Western District of Michigan, a storeowner and store 

manager were sentenced to 33 months in prison and 20 months in prison, respectively. Both were ordered 

to pay $722,000 in restitution, jointly and severally. The storeowner resided illegally in the United States 

and will be subjected to deportation upon completion of her incarceration period. This OIG investigation 

examined whether owners and employees of a convenience store were exchanging SNAP benefits for 

cash, cell phones, and other ineligible items. The storeowner and two clerks (children of the owner) were 

indicted and eventually pled guilty to charges of conspiracy and SNAP fraud.4

3 The spouse (the ADHS employee) has pled guilty and is awaiting sentencing. The defendant (husband of the ADHS 

employee) has been indicted and his trial is pending.

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In November 2016, one clerk was sentenced to 6 months in prison and ordered to pay $722,000 in restitution, jointly and 

severally. She received a downward departure from sentencing guidelines for having provided substantial assistance to the 

Government.
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Defendant Sentenced and Ordered to Pay $157,800 in Restitution for Fraud Related to Rural 

Development Housing Subsidy—Washington State

On January 13, 2017, in King County Court, Seattle, Washington, a defendant was sentenced to 

50 months in prison and ordered to pay $157,800 in restitution. This OIG investigation disclosed that the 

defendant claimed no income on a Rural Development housing subsidy application in order to obtain 

approximately $36,000 in subsidies. She failed to disclose approximately $144,000 she obtained illegally 

by stealing from an elderly woman in Seattle. Her income, though obtained illegally, made her ineligible 

for the housing subsidy. She pled guilty in King County Court to three felonies, one of which included a 

vulnerable victim aggravator.

Defendant Sentenced for Obstruction of Justice Related to Identity Theft—Wisconsin

On February 2, 2017, in U.S. District Court, Eastern District of Wisconsin, a defendant pled guilty and 

was sentenced to 1 year and 1 day in prison for conspiracy to obstruct justice. This sentencing arose out 

of an OIG investigation into the defendant’s brother, a former Forest Service (FS) employee. The 

investigation was initiated to determine if the former FS employee misused his access to the personal 

information of other FS employees. It was determined that the former FS employee used this 

information to open credit cards in the names of other FS employees for the purpose of identity theft.

The former FS employee was indicted on counts pertaining to unauthorized access device fraud and 

identify theft. In December 2016, the former FS employee was sentenced to 4 years in prison and was 

ordered to pay $91,100 in restitution.

Defendant Sentenced to Probation and Restitution for Misrepresentation in Settlement 

Application—Oklahoma

On February 16, 2017, in U.S. District Court, Northern District of Oklahoma, a defendant was sentenced 

to 3 years’ probation, 8 months’ home confinement, and was ordered to pay $62,500 in restitution for 

misrepresentation which resulted in her receiving payment under Keepseagle settlement. This 

investigation determined that she received a settlement under Pigford v. Glickman and Keepseagle v. 

Vilsack. The condition of participation in these discrimination settlements precludes an individual from 

seeking relief under more than one settlement. It was determined that she lied on the Keepseagle claim 

form and certified she did not receive a Pigford settlement. The investigation also revealed the woman 

was not a member of a Federally recognized tribe at the time of the alleged discrimination. As a result of 

these false representations, she fraudulently received a payment for $62,500 under the Keepseagle

settlement.

Additional Defendant Sentenced and Ordered to Pay Restitution for Role in SNAP Fraud 

Scheme—New Mexico

On January 23, 2017, in U.S. District Court, District of New Mexico, an individual was sentenced to 

2 years’ probation for defrauding SNAP and was also ordered to pay $4,600 in restitution. In his 

guilty plea, he admitted that he met with the main investigative subject, a New Mexico Human 

Services Department (NMHSD) employee, and paid him $100 to process a SNAP benefit application 

in his name even though he was ineligible to receive SNAP benefits. He admitted that he obtained 

$4,600 in illegal SNAP benefits due to this scheme. OIG initiated an investigation based on an 

allegation that an employee assigned to the Income Support Division of the NMHSD had established 
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fraudulent SNAP benefit cases for approximately 150 individuals.5 The investigation disclosed that 

the employee had several co-conspirators who assisted him with the scheme; they also received cash 

payments from individuals fraudulently receiving SNAP benefits. The amount of SNAP benefits paid 

out by the State of New Mexico due to this scheme was estimated at $230,000. The employee and 

five co-conspirators were indicted on charges involving conspiracy, SNAP benefits fraud, and aiding 

and abetting.

Previously, the NMHSD employee was sentenced in 2016 to 1 year in prison and was ordered to pay 

$181,000 in restitution for his role in establishing fraudulent SNAP benefit cases. Four of the five 

Federally indicted co-conspirators pled guilty and received sentences of up to 4 years’ probation, and 

were each ordered to pay restitutions of up to $9,300. The remaining co-conspirator completed a pretrial diversion program and the charges were dismissed.6

Defendant Sentenced for Lacey Act Violations and False Statements—Mississippi

On January 17, 2017, in U.S. District Court, Southern District of Mississippi, the third and final defendant 

in a case involving Lacey Act violations was sentenced to 45 days of house arrest, 3 years’ probation, and 

ordered to pay a $10,000 fine. The judicial ruling on the amount of the defendant’s restitution is pending. 

This OIG investigation disclosed that for a period exceeding 5 years, three individuals made false 

statements to Animal and Plant Health Inspection Service and violated the Lacey Act by transporting 

numerous white tailed deer from Texas to Mississippi.7 The three defendants were charged with various 

Lacey Act violations and false statements. In August 2016, all three subjects entered guilty pleas. 

Previously, the other two defendants were each sentenced to 3 years’ probation and ordered to pay a 

$10,000 fine.

Storeowner Agrees to False Claims Payment Due to SNAP Fraud—Oklahoma

On February 13, 2017, in U.S. District Court, Western District of Oklahoma, a store owner agreed to pay 

$65,000 to the Government to settle the civil false claims case against him. This investigation disclosed 

that owner of an FNS-qualified retail store was trafficking in SNAP benefits with several recipients. The 

investigation revealed that he was exchanging SNAP benefits for cash and charged approximately $20 

more for every $100 in cash the recipients received. The defendant plead nolo contendere in State court 

to misdemeanor charges of SNAP trafficking. He paid approximately $3,000 in restitution and fees, and 

signed a voluntary 1-year SNAP disqualification with the Oklahoma Department of Human Services. 

Thereafter, OIG referred the case to the U.S. Attorney’s Office for the Western District of Oklahoma to 

pursue a False Claims Act case against the owner and the store.

5 OIG received a referral on the allegations from the NMHSD OIG’s Investigations Bureau. The investigation was 

conducted jointly with the NMHSD OIG. The Social Security Administration’s OIG assisted.

6 To date, five SNAP recipients have been indicted in Bernalillo County for violation of New Mexico statutes related to 

this scheme. Four pled guilty and received sentences up to 2 days in prison and 362 days’ deferred incarceration 

(probation). They were ordered to pay restitution ranging from $570 to $2,900.

7 This investigation is being conducted jointly with the U.S. Fish and Wildlife Service and the Mississippi Department of 

Wildlife, Fisheries and Parks.