CAMDEN, N.J. – A Camden County, New Jersey man today
admitted his role in a scheme to steal hundreds of thousands of dollars in
government funds using fraudulently procured electronic benefits transfer (EBT)
cards, U.S. Attorney Craig Carpenito announced.
Juan Melo, 56, of Woodlynne, New Jersey, pleaded guilty by
teleconference before U.S. District Judge Renee Marie Bumb in Camden federal
court to an information charging him with one count of conspiracy to defraud
the United States and one count of defrauding the U.S. Department of
Agriculture’s (USDA) Supplemental Nutrition Assistance Program (SNAP). Melo and his co-defendants, Luciano Estevez,
50, and Jose Garcia, 52, both of Camden; and Octavio Rodriguez, 51, of
Pennsauken, New Jersey, were previously charged by separate complaints in
August 2019 with participating in the conspiracy and defrauding SNAP.
Formerly known as the food stamp program, SNAP is
administered by the USDA to assist low-income individuals and families with the
purchase of groceries and food items. SNAP recipients receive EBT cards, similar
to commercial debit cards, to make food purchases. Retailers authorized to
accept SNAP benefits have EBT terminals to process the purchases, which are
made by swiping the EBT card at the terminal and entering a Personal
Identification Number (PIN). The EBT terminal verifies the PIN, determines
whether the customer’s account balance is sufficient to cover the proposed
transaction, and informs the retailer whether the transaction should be
authorized or denied. The amount of the purchase is deducted electronically
from the SNAP benefits reserved for the customer and the purchase amount is
credited to the retailer’s designated bank account.
According to documents filed in this case and statements
made in court:
Melo, Estevez, Rodriguez, Garcia, and others allegedly
targeted low-income individuals who possessed or had access to EBT cards, and
unlawfully purchased the cards from these individuals in exchange for cash and
controlled substances. Two confidential sources working with law enforcement
engaged in 43 controlled transactions involving EBT cards totaling more than
$40,500, which they exchanged for cash and controlled substances, including
prescription opioids.
The defendants used the unlawfully procured EBT cards to
purchase bulk goods and food items from large national superstores. These goods
and food items were then resold in small convenience and grocery stores owned
or affiliated with the defendants or their associates, resulting in a profit
for the defendants. Hundreds of EBT cards fraudulently procured by the
defendants were used at these superstores, resulting in the misappropriation of
approximately $150,000 in government funds.
Estevez also unlawfully procured an EBT terminal registered
to a superstore in Philadelphia to use at his small grocery store in Camden,
where Melo was an employee. Through this
terminal, the scheme netted approximately $110,000 in SNAP funds.
Each of the counts to which Melo pleaded guilty carry a
maximum penalty of five years in prison and a fine of $250,000, or twice the
gross gain or loss from the offense. Melo’s sentencing is scheduled for Sept.
8, 2020.
U.S. Attorney Carpenito credited special agents of the U.S.
Department of Agriculture-Office of Inspector General, Northeast Region, under
the direction of Special Agent in Charge Bethanne M. Dinkins; the U.S.
Department of Health and Human Services-Office of Inspector General, under the
direction of Special Agent in Charge Scott J. Lampert, and the FBI Philadelphia
Field Office, South Jersey Resident Agency, under the direction of Special
Agent in Charge Mike Driscoll in Philadelphia.
The government is represented by Assistant U.S. Attorney
Christina O. Hud of the U.S. Attorney’s Office’s Criminal Division in Camden.
The charges and allegations against the remaining defendants
are merely accusations, and they are presumed innocent unless and until proven
guilty.
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