Former School Teacher Sentenced To 14 Years In Prison In $8 Million Food Stamp Fraud Case

Federal authorities dismantled an organization that operated 13 phony
grocery stores across Georgia which trafficked in Food Stamp and WIC benefits

SAVANNAH, GA: Rashella Reed, 41, a former Atlanta Public School teacher from Riverdale, Georgia, was sentenced on Wednesday by United States District Judge William T. Moore, Jr. to serve 14 years in prison for her role in a massive $8 million fraud upon the Food Stamp and WIC programs.  Earlier this year, Reed and 2 others were convicted after a 4-day jury trial of conspiring to defraud the Supplemental Nutrition Assistance Program (SNAP), commonly known as the Food Stamp Program, and the Women, Infant and Children Program (WIC).  In addition to her prison sentenced, Reed was ordered to serve 3 years of supervised release upon her release from prison and to pay $8,254,239.46 in restitution.    

According to evidence presented during the trial and at Reed’s sentencing, Reed and others conspired to traffic over $8 million in government benefits from the Food Stamp and WIC programs, and to launder the proceeds of their ill-gotten gains.  The scheme involved 13 storefronts throughout Georgia, including stores in Savannah, Augusta, Atlanta, Decatur, Macon and Columbus.  Reed owned and operated the Decatur, Georgia store known as, “The Baby Spot.”  The 13 stores amounted to “pretend” grocery stores, which were used as a front to buy over $8 million in food stamp benefits and WIC vouchers for cash.  Food Stamp and WIC recipients were paid anywhere from $.10 to $.60 on the dollar for their benefits; Reed and other conspirators pocketed the rest.  The organization was attempting to expand into Alabama and Tennessee when it was dismantled by federal agents investigating the case.  A total of 16 defendants were charged with the scheme; 13 pled guilty and 3 were convicted at trial.  To date, this case was the largest prosecution of its kind in the State of Georgia.  

United States Attorney Edward J. Tarver said, “SNAP and WIC are part of the hunger safety net put in place to provide assistance to eligible, low income individuals and families who qualify.  These defendants scammed federal food programs, swindled American taxpayers and literally took food out of the mouths of children.  The work of dedicated and hardworking federal agents prevented this scam from spreading further into neighboring states and costing taxpayers many more millions of dollars.  This case is an example of the work that federal agents and prosecutors are doing to end fraud in federal programs.”

Karen Citizen-Wilcox, Special Agent-in-Charge of the United States Department of Agriculture, Office of Inspector General said, “This OIG investigation shows how greed attracts individuals at all levels.  Ms. Reed was college educated and employed as a teacher.  However, she found it necessary to take part in a multi-million dollar fraud scheme that offended the sensibilities of the American taxpayer and deprived needy individuals of nutrition.  The jury conviction and 14 year sentence handed down by U.S. District Court Judge Moore serves as an extreme eye opener for individuals who think that such crimes only get a slap on the hand.  OIG remains ever committed to such investigations and to working with the DOJ to prosecute individuals consumed by such greed.”

The prosecution of this case arose out of an investigation led by Special Agent Salina Walker of the USDA-OIG.  Assistant United States Attorneys James D. Durham and E. Gregory Gilluly prosecuted the case for the United States.  For additional information, please contact First Assistant United States Attorney James D. Durham at (912) 201-2547.