Ex-Oregon Department of Human Services Employee Sentenced for Theft of Welfare Benefits

PORTLAND, Ore – Yesterday, U.S. District Judge Marco A. Hernandez sentenced Denise Lachelle Palfrey, 38, of Tacoma, Washington, for stealing welfare benefits while employed at the St. John’s branch of the Oregon Department of Human Services (ODHS).  On November 18, 2013, pursuant to a plea agreement, Palfrey pleaded guilty to one count of theft of government funds and one count of Supplemental Nutrition Assistance fraud, both felony offenses.  Judge Hernandez sentenced Palfrey to three years of probation, including eight months of home detention, and full restitution in the amount of $4,233.76.

In pleading guilty, Palfrey admitted that in November and December of 2011, she stole Supplemental Nutrition Assistance (SNAP) benefits (previously known as food stamps) and Temporary Assistance for Needy Families (TANF) benefits.

Palfrey previously worked for the ODHS in the St. John’s branch office in Portland.  Defendant’s duties included screening applications for welfare programs, determining applicant eligibility for SNAP benefits and other welfare programs, and issuing Oregon Trail cards to clients.  An Oregon Trail card is an Electronic Benefits Transfer (EBT) card, similar to a bank debit card.  When individuals qualify for food or cash benefits, Oregon Trail card accounts are set up for them.  Benefits are automatically deposited onto the card each month.  The Oregon Trail card is used to access the SNAP food benefits and TANF cash benefits.

An investigation revealed that in November and December of 2011, Palfrey fraudulently cancelled eight Oregon Trail EBT cards without the knowledge or consent of the cardholder and, forged the victim cardholder’s name in a log kept in the St. John’s ODHS branch office.  Palfrey issued and then converted the new Oregon Trail EBT card to her own use.  Palfrey activated each of the Oregon Trail cards and used the benefits on the card at local merchants within days of activation.   Palfrey used or transferred to others the Oregon Trail cards with SNAP benefits for use at merchants including Costco, Safeway, and others.  The TANF benefits were withdrawn from the Oregon Trail cards as cash at merchant and bank EBT terminals.

The ODHS, Office of Payment Accuracy and Recovery and the U. S. Department of Agriculture, Office of Inspector General – Investigations (USDA-OIG) jointly conducted the investigation.  Assistant U. S. Attorney Donna Brecker Maddux handled the prosecution.