Former HSI Special Agent Sentenced to More Than Six Years in Prison on Tax, Structuring, and Concealment Charges
ROCKFORD — Seven Rockford residents have been charged by a federal grand jury with multiple counts of wire fraud and additional offenses. FEUY KHAIKHAM, 57; LEEFORM XAYVANDY, SR., a.k.a. “John,” 37; BOUNLEUNG THAMONTRI, a.k.a. “Tommy,” 54; VANSY XAYVANDY a.k.a. “Dee,” 42; SOM XAYVANDY, 47; CHRISTIANA XAYVANDY, a.k.a. “Tina,” 26; and AUNG GYAW, a.k.a. “AJ,” 23, were each charged with seventeen counts of wire fraud in a superseding indictment returned on July 31, 2018.
The wire fraud charges relate to the Supplemental Nutrition Assistance Program (“SNAP”), formerly known as the food stamp program. SNAP is a federal benefit program that assists low-income individuals and families purchase food. The U.S. Department of Agriculture, Food and Nutrition Service (“USDA”) is responsible for administering and implementing SNAP in conjunction with state governments. The Illinois Department of Human Services, which administers SNAP in Illinois, provides benefits to eligible individuals and families on their Illinois Link cards. To use their SNAP benefits, Illinois recipients must present their Link card to a retailer authorized to participate in SNAP by the USDA. Stores authorized to participate in SNAP can accept SNAP benefits only as payment for eligible food items and cannot accept SNAP benefits in exchange for cash. The illegal exchange of SNAP benefits for cash is commonly referred to as SNAP trafficking.
The superseding indictment alleges that between April 2015 and January 18, 2017, the defendants schemed to defraud the USDA and the State of Illinois by fraudulently accepting and redeeming SNAP benefits exchanged for discounted amounts of cash, knowing that such exchanges were prohibited under SNAP. It is alleged that the seven defendants fraudulently obtained more than $3 million in reimbursement for SNAP benefits over the course of the SNAP trafficking scheme. Each count of wire fraud carries a maximum penalty of 20 years in prison and a fine of up to $250,000 or twice the gross gain or gross loss resulting from the offense, whichever is greater.
The superseding indictment also charges Khaikham, Leeform Xayvandy, Som Xayvandy, and Gyaw with one count each of SNAP fraud, and it charges Vansy Xayvandy with two counts of SNAP fraud. SNAP fraud carries a maximum penalty of 5 years in prison and a $10,000 fine.
In addition to wire fraud and SNAP fraud charges, the superseding indictment charges Khaikham, Leeform Xayvandy and Thamontri with conspiracy to commit money laundering and multiple counts of money laundering. The superseding indictment alleges that Khaikham and Thamontri recruited an individual to act as a nominee owner of a grocery store in Rockford, obtain SNAP authorization for the grocery store, and open a bank account for the grocery store in the nominee owner’s name. The superseding indictment alleges that proceeds of SNAP trafficking transactions conducted by Khaikham, Thamontri, and Leeform Xayvandy were deposited into the bank account, which was controlled by Khaikham and Thamontri. The superseding indictment further alleges that Khaikham, Thamontri, and Leeform Xayvandy conspired to conduct and attempt to conduct financial transactions to liquidate and distribute those proceeds while concealing the nature, control and ownership of the proceeds. Each count of money laundering and conspiracy to commit money laundering carries a maximum penalty of 20 years in prison and a $500,000 fine.
The superseding indictment also charges Leeform Xayvandy with one count of engaging in a monetary transaction in criminally-derived property in an amount greater than $10,000. This count carries a maximum penalty of ten years in prison and a $250,000 fine.
The charges were announced by John R. Lausch, Jr., United States Attorney for the Northern District of Illinois; Anthony Mohatt, Special Agent-in-Charge of the Midwest Regional Office of the U.S. Department of Agriculture, Office of Inspector General in Chicago; and Gabriel L. Grchan, Special Agent-in-Charge of the Chicago office of the Internal Revenue Service, Criminal Investigation Division. The Rockford Police Department and the Winnebago County Sheriff’s Office assisted in the investigation.
Leeform Xayvandy, Christiana Xayvandy and Gyaw were arraigned on Aug. 7, 2018, and pleaded not guilty to all charges. Vansy Xayvandy and Som Xayvandy were arraigned Tuesday and also pleaded not guilty to all charges. Khaikham is scheduled to be arraigned on the superseding indictment on Sept. 6, 2018, at 11:00 a.m. With the exception of Thamontri, who remains at large, the other defendants are currently released on bond pending trial.
The public is reminded that an indictment contains only charges and is not evidence of guilt. Each defendant is presumed innocent and is entitled to a fair trial at which the government has the burden of proving guilt beyond a reasonable doubt. If convicted, the Court must impose a reasonable sentence under federal sentencing statutes and the advisory United States Sentencing Guidelines and order full restitution.
The government is represented by Assistant U.S. Attorney Talia Bucci.