Camden County Man Admits Role in Government Benefits Fraud Scheme

CAMDEN, N.J. – A Camden, New Jersey, man today admitted his role in a scheme that netted tens of thousands of dollars in government funds using fraudulently procured electronic benefits transfer (EBT) cards, U.S. Attorney Craig Carpenito announced.

Jose Garcia, 53, pleaded guilty by videoconference before U.S. District Court Judge Renée Marie Bumb 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).

Garcia and his co-defendants, Luciano Estevez, 51, also of Camden; Octavio Rodriguez, 51, of Pennsauken, New Jersey; and Juan Melo, 57, of Woodlynne, New Jersey, were previously charged by separate complaints in August 2019 with participating in the conspiracy and defrauding SNAP. Estevez, Rodriguez, and Melo all previously pleaded guilty to participating in the conspiracy and defrauding SNAP. 

SNAP, formerly known as the food stamp program, 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 food purchases. Food purchases are made by swiping the EBT card at the terminal, and having customers enter 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:

Garcia, Estevez, Rodriguez, Melo, 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 often 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 tens of thousands of dollars in government funds.

Estevez also unlawfully procured an EBT terminal registered to a superstore in Philadelphia, Pennsylvania. to use at his small grocery store in Camden, which was not registered as a lawful SNAP merchant in the USDA program. Through this terminal, the scheme netted an additional approximately $110,000 in SNAP funds. 

The conspiracy count to which Garcia pleaded guilty carries a maximum penalty of five years in prison and a fine of $250,000, or twice the gross gain or loss from the offense. The SNAP fraud offense to which Garcia pleaded guilty carries a maximum penalty of 20 years in prison and a fine of $250,000, or twice the gross gain or loss from the offense.  Garcia’s sentencing is scheduled for Jan. 4, 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; the FBI Philadelphia Field Office, South Jersey Resident Agency, under the direction of Special Agent in Charge Michael J. Driscoll in Philadelphia; and the Camden County Police Department, under the direction of Chief of Police Joseph D. Wysocki, with the investigation leading to today’s guilty plea.

The government is represented by Assistant U.S. Attorney Christina O. Hud of the U.S. Attorney’s Office’s Criminal Division in Camden.