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

Investigations Bulletin 

October 31, 2016

Extensive SNAP Fraud Activity at Flea Market Results in Sentences and 

Restitution Orders of $1.7 Million and $452,000—Florida

On October 11, 2016, in U.S. District Court, Southern District of Florida, a mother and son pled 

guilty to counts charging them with conspiracy to commit an offense against the United States 

and wire fraud. The son was sentenced to 41 months in prison and was ordered to pay 

$1.7 million in restitution. The mother was sentenced to 12 months and 1 day in prison and was 

ordered to pay $452,000 in restitution. This case was part of Operation Stampede/Operation 

Cash Hungry, a multi-agency investigation involving State and Federal law enforcement, as well 

as the U.S. Attorney’s Office and the Florida Attorney General’s Office. This joint investigation 

was based on information provided by the Florida Department of Children and Families 

regarding an identity theft case originating out of Palm Beach County. The identity thief took 

fraudulently obtained EBT cards to a flea market and exchanged Supplemental Nutrition 

Assistance Program (SNAP) benefits allocated to them for cash. Substantial evidence of SNAP 

fraud was obtained during the investigations, including EBT cards, cash, and ledgers.1 

Storeowner Sentenced to Prison and Ordered to Pay $1.3 Million in Restitution to 

USDA for SNAP Fraud—Michigan 

On October 3, 2016, in U.S. District Court, Eastern District of Michigan, a storeowner was 

sentenced pursuant to charges of SNAP and wire fraud. He was ordered to serve 30 months in 

prison and was ordered to pay approximately $1.3 million in restitution to USDA. Additionally, 

$38,000 of the fraud proceeds has been forfeited. From April to June 2014, multiple SNAP 

trafficking transactions for cash and ineligible items occurred at the Michigan store. The 

storeowner also conspired with owners of another local store in an effort to conceal/launder 

fraudulent SNAP transactions at his store. 

Fraud by Cattle Farmer Leads to Sentence and Restitution Order Results of 

$262,000—Missouri 

On October 3, 2016, in U.S. District Court, Western District of Missouri, a cattle farmer was 

sentenced to 2 years in prison without parole, and was ordered to pay $262,000 in restitution to 

his victims, including the Farm Service Agency (FSA), a cattle company, and individual victims. 

This case was opened based on a referral from FSA that the farmer, who had both an Annual 

Operating Loan and a Term Operating Loan, was delinquent on his loans. He was in the county 

jail for receiving stolen property and it appeared he may have sold FSA collateral without its 

consent. The OIG investigation determined the defendant was in a three-part fraud scheme that 

caused a loss of almost $300,000. He sold at least 114 head of FSA mortgaged cattle, which 

were valued at approximately $138,000. The defendant also engaged in a scheme to remove ear 

tags from 646 head of cattle that were owned by others and had been placed in his care to graze. 

 

1 Many other sentencings have occurred in this case, including two storeowners whose sentences included 

restitution orders of $873,000 and $997,000, respectively. Another defendant was ordered to pay approximately 

$127,000 in restitution. 
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He commingled these cattle with his own and sold $124,000 worth of cattle that did not belong 

to him. He further made false statements to his insurance company by claiming cattle had either 

drowned or died, thereby receiving $31,000 as a result. The defendant entered a guilty plea to 

fraud using property mortgaged to a farm credit agency. As part of his plea agreement, he agreed 

to waive his Chapter 7 Bankruptcy discharge. 

Storeowner Sentenced to Imprisonment and Restitution of $1.2 Million to USDA 

for Theft of Government Funds—New Jersey 

On October 3, 2016, in U.S. District Court, District of New Jersey, a storeowner was sentenced 

to 2 years in prison and was ordered to pay $1.2 million in restitution to USDA. OIG and the 

Department of Homeland Security’s Homeland Security Investigations office (HSI) began an 

investigation of this store based on a referral from the Food and Nutrition Service’s Retailer 

Investigation Branch (FNS RIB). During the course of the joint OIG and HSI investigation, 

multiple SNAP trafficking transactions occurred resulting in SNAP benefits being exchanged for 

U.S. currency. In May 2016, the store owner pled guilty to theft of Government funds. He 

agreed to forfeit approximately $1.2 million under the terms of the plea agreement. 

SNAP Fraud Results in Prison Sentence and Restitution Order of $954,000—

Michigan 

On September 20, 2016, a storeowner was sentenced in U.S. District Court, Eastern District of 

Michigan, to 21 months in prison and was ordered to pay $954,000 in restitution. During 2012, 

SNAP benefits were trafficked in exchange for cash, cigarettes, and other ineligible items at the 

owner’s two stores. The search warrants yielded evidence of SNAP fraud to include numerous 

EBT cards, business banking records and inventory records. HSI personnel executed seizure 

warrants on bank accounts and cash located at the warrant locations, and in the process seized 

$272,000. In May 2016, the storeowner pled guilty to food stamp fraud.2

Pre-Trial Diversion Agreement Includes $52,000 Payment to FSA—South Dakota

On October 12, 2016, in U.S. District Court, District of South Dakota, the owner of a land and 

buffalo company agreed to terms of a pretrial diversion settlement agreement, which included a 

payment of $52,000 to FSA. Additional monies have been recouped through administrative 

action. He submitted a Livestock Forage Program application to FSA for the loss of grazing land 

due to drought; the application resulted in a disaster payment of $94,000. However, the 

investigation determined he was not in control of the grazing land during the drought period 

because he had leased it to another party. Furthermore, he did not have the 361 head of his cattle 

on the land, as he claimed on his application. He also falsified supporting documentation which 

he had submitted to FSA in support of his cattle numbers. He was indicted on counts related to 

fraudulent claims. 

 

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This investigation was conducted jointly with the Michigan State Police Bridge Card Enforcement Team and HSI.
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Storeowner Sentenced to County Jail and Restitution Order of $810,000 for SNAP 

Fraud—California 

On September 15, 2016, in Superior Court of California, Santa Clara County, a storeowner was 

sentenced to 1 year in county jail was ordered to pay $810,000 in restitution. The case was 

initiated when OIG received a referral from FNS RIB alleging SNAP trafficking. OIG opened 

an investigation, during which several SNAP trafficking transactions occurred. 

Defendant Sentenced and Ordered to Pay $137,000 Restitution for Conversion of 

FSA-Mortgaged Property--Iowa

On October 12, 2016, in U.S. District Court, Northern District of Iowa, a farmer was sentenced 

to 6 months in prison and was ordered to pay $137,000 in restitution. This OIG investigation 

was conducted to determine if this farmer converted property that was mortgaged to FSA and 

failed to apply those sales proceeds to his FSA loans. The investigation disclosed that he sold 

over 102,000 bushels of corn that was pledged as collateral for a FSA grain loan. He received 

$332,000 from these sales and did not use any of these proceeds to pay down his FSA debt. 

Investigation further determined loan proceeds were not used in accordance with terms of the 

loan agreement. During 2015, FSA withheld $58,000 in Agriculture Risk Coverage and Price 

Loss Coverage payments, which was applied to offset his debt to the agency.