Hudson County Welfare Case Worker Admits Extorting Recipients by Threatening to Terminate Benefits

NEWARK, NJ—A Hudson County, N.J., welfare case worker admitted today to attempting to extort welfare recipients by threatening to terminate their benefits, U.S. Attorney Paul J. Fishman announced.

Walter Payton, 54, of Bayonne, N.J., pleaded guilty to an information charging him with attempted extortion induced by wrongful use of fear of economic harm and under color of official right. He entered his guilty plea before U.S. District Judge Esther Salas in Newark federal court.

According to documents filed in this case and statements made in court:

Payton was employed as a welfare case worker by the Hudson County Department of Family Services, Division of Welfare and Workforce Development for approximately nine years. In that capacity, his official duties included processing applications for food stamps, Medicaid, and cash assistance.

In August 2010, an individual identified in court documents as “the Victim” began receiving welfare benefits in an amount of approximately $280 per month in monetary payments and $330 per month in food stamps. The Victim was married and had two children, both of whom were born in the United States. Shortly thereafter, in September 2010, Payton demanded payment of $200 from the Victim, and that if the Victim failed to do so, Payton would terminate the Victim’s benefits. On September 27, 2010, Payton called the Victim to meet him at an outside location near the Hudson County Department of Family Services office building where be accepted payment of $200 from the Victim and indicated that there would be no need for additional payments.

Payton also admitted that he demanded similar extortion payments from four other Hudson County welfare recipients while working as a Hudson County welfare case worker.

The attempted extortion charge to which Payton pleaded guilty carries a maximum potential penalty of 20 years in prison and a $250,000 fine. Sentencing is currently scheduled for December 19, 2011.

U.S. Attorney Fishman credited special agents of the FBI, under the direction of Special Agent in Charge Michael B. Ward in Newark, with the continuing investigation leading to the guilty plea.

The government is represented by Assistant U.S. Attorney Zahid N. Quraishi of the U.S. Attorney’s Office Special Prosecutions Division in Newark.

Defense counsel: David Holman Esq., Assistant Federal Public Defender, Newark