Huntington Woman Sentenced in Connection with Illegal Food Stamp Fraud Scheme

HUNTINGTON, WV—U.S. Attorney Booth Goodwin announced today that a Huntington woman was sentenced to three months of community correction and six months of home confinement as a part of her four-year sentence of probation for her role in an illegal food stamp fraud scheme. Stephanie Pauley, 35, of Huntington, previously pleaded guilty in April to conspiracy to commit food stamp fraud. Pauley admitted that she participated with other known individuals in a scheme to defraud the Supplemental Nutrition Assistance Program (“SNAP”), formerly known as the Food Stamp Program. These benefits are given to eligible individuals in the form of a debit card called the Mountain State Card.

Pauley was an employee of the Huntington-area convenience store, All-in-One store (“All-in-One”) at the time of the illegal fraud scheme. Pauley admitted that some time after March 2009 and continuing until February 2012, she conspired with other known individuals in an illegal card-swiping scheme that took place at All-in-One. The owner of the All-in-One store, Abe Eloirzazi, and another store employee, Cindy Gibson, are both pending sentencing.

She fraudulently swiped certain recipients’ Mountain State Cards by charging a certain dollar amount against the value of the recipient’s card. Pauley admitted that the card recipients were given 50 to 65 cents on the dollar in cash. Pauley also admitted to illegally selling cigarettes and alcohol by charging the purchase on the Mountain State Card as though it was an eligible food item. The All-in-One bank account then received the full amount of the fraudulent transactions from the government. Pauley admitted that as a result of the scheme, she redeemed a portion of approximately $127,000 in SNAP benefits.

The court also ordered the defendant to pay $127,000 in restitution.

The Department of Agriculture Office of Inspector General, the Huntington Police Department, the West Virginia State Police, the Federal Bureau of Investigation, and the Department of Homeland Security conducted the investigation. Assistant United States Attorney Erik S. Goes handled the prosecution. The sentence was imposed by United States District Judge Robert C. Chambers.

Flint Store Owner Found Guilty of Conspiracy to Commit Food Stamp Fraud

Noha Fofana, 55, of Flint, was found guilty by a federal jury on August 17, 2012 on an indictment charging him with conspiracy to commit food stamp fraud, United States Attorney Barbara L. McQuade announced today.

McQuade was joined in the announcement by Joe N. Smith, Special Agent in Charge of USDA-Office of Inspector General and Special Agent in Charge Robert D. Foley, III of the Federal Bureau of Investigation.

The jury deliberated for just over 30 minutes before returning the guilty verdict, concluding a trial that began on August 14, 2012, before United States District Judge Mark A. Goldsmith.

Evidence introduced during the trial established that Fofana, the owner of Mandingo African Market, redeemed more than $750,000 in food stamp benefits from February 2009 to July 2011, $612,000 of which was obtained utilizing fraudulent “food stamps-for-cash” exchanges. The U.S. Department of Agriculture-Office of Inspector General, (USDA-OIG) which funds the food stamp program, calculated that during that same time period, Mandingo’s average food stamp redemption amount was $26,798 per month—compared to an average of $5,479 monthly redemption for other convenience stores in the area.

Witnesses testified during the trial that Fofana and others conspired to fraudulently submit bridge card numbers for cash benefits. Michigan’s bridge card is a debit card-like device that electronically tracks food stamp benefits. Fofana and others would obtain bridge cards or bridge card numbers from benefit recipients and call the numbers into the store. Members of the conspiracy then manually entered the bridge card numbers at the Mandingo Market in order to transfer the benefits to the market’s bank account. Members of the conspiracy agreed to pay customers, including undercover law enforcement agents, roughly 50 cents for each $1 charged against their cards.

USDA-OIG Special Agent in Charge Joe N. Smith stated, “The Office of Inspector General will continue to dedicate resources to the investigation of retailers who commit fraud in vital USDA food assistance programs. OIG’s objectives are to protect the integrity of USDA nutrition assistance programs such as Supplemental Nutrition Assistance Program and to stop unscrupulous retailers such as Noha Fofana from taking advantage of low-income individuals during these tough economic times. As we conduct fraud investigations throughout the state of Michigan, we appreciate the support of our federal and state law enforcement partners and the U.S. Attorney’s Office’s long-term commitment to prosecuting crimes against SNAP.”

Fofana’s sentencing is scheduled for November 20, 2012 at 1:30 p.m. before Judge Mark A. Goldsmith.

The case was investigated by special agents from the United States Department of Agriculture-Office of Inspector General and special agents of the FBI. The case was prosecuted by the Flint branch of the United States Attorney’s Office for the Eastern District of Michigan.