Due to the lapse in appropriations, Department of Justice websites will not be regularly updated. The Department’s essential law enforcement and national security functions will continue. Please refer to the Department of Justice’s contingency plan for more information.

You are here

Justice News

Department of Justice
U.S. Attorney’s Office
Southern District of Florida

FOR IMMEDIATE RELEASE
Wednesday, May 11, 2016

22 Defendants Charged Federally With Collectively Receiving Over $13 Million From USDA By Fraudulently Trading Food Stamps For Cash

6 Additional Defendants Charged By Statewide Prosecutors For Participating In Food Stamp Fraud Schemes

Wifredo A. Ferrer, United States Attorney for the Southern District of Florida, Karen Citizen-Wilcox, Special Agent in Charge, U.S. Department of Agriculture, Office of Inspector General (USDA-OIG), Pam Bondi, Florida Attorney General, Jeff Atwater, Florida Chief Financial Officer, Mike Carroll, Secretary, Florida Department of Children and Families, Robert C. Hutchinson, Acting Special Agent in Charge, U.S. Immigration and Customs Enforcements Homeland Security Investigations (ICE-HSI), Troy Walker, Special Agent in Charge, Florida Department of Law Enforcement (FDLE), Miami Regional Operations Center, U.S. Marshal Amos Rojas Jr. for the United States Marshals Service’s (USMS) Regional Fugitive Task Force, Miami Field Office, Juan J. Perez, Director, Miami Dade Police Department (MDPD), Rodolfo Llanes, Chief, Miami Police Department (MPD), Ric Bradshaw, Sheriff, and Palm Beach County Sheriff’s Office (PBSO), announce the filing of federal charges against 22 retail store owners or operators in connection with schemes to illegally redeem food stamp benefits in exchange for cash. The indictments allege that the retailers received more than $13 million in federal payments for transactions in which they did not provide any food, a fraud scheme commonly known as “food stamp trafficking.” Stores and vendors allegedly took illicit profits from the fraudulent transactions with food stamp recipients.  In addition to the federal indictments, 6 individuals have been charged by the Office of Statewide Prosecution for their alleged receipt of additional illegal payments during the course of their participation in fraudulent food stamp schemes.  This joint operation resulted in the largest combined financial fraud loss for a food stamp trafficking takedown in history.

“When individuals defraud governmental programs, they steal taxpayer funded benefits that are intended to feed the families and children in our communities who are most in need,” stated United States Attorney Wifredo A. Ferrer.  “The U.S. Attorney’s Office and our federal law enforcement partners are committed to working with our state and local allies to investigate and prosecute individuals that commit fraudulent schemes for illicit personal financial gain.”  

“These flea market retailers are charged with having taken advantage of a provision in the SNAP program designed to provide locally sourced fresh produce and meat to low income families who otherwise would likely have no option for such food items. Instead of operating within the confines of the rules and regulations for farmers' market vendors, these retailers created an illegal benefits exchange system that defrauded the American taxpayer and denied healthy foods to needy children and their families.  Thousands of SNAP recipients are believed to have exchanged their EBT benefits for cash at the Opa-Locka Hialeah Flea Market.  The flea market retailers, who are alleged to have orchestrated this trafficking scheme, pocketed millions in "fees" which they charged for converting food assistance benefits into cash.  Any retailer who chooses to defraud taxpayers through such trafficking schemes will continue to be aggressively investigated and prosecuted by USDA-OIG and its law enforcement partners," stated Karen Citizen-Wilcox, Special Agent in Charge, USDA-OIG.

“Food stamp trafficking is a serious crime tantamount to stealing from the hardworking taxpayers in our state,” said Attorney General Bondi. “These retailers and operators thought they had devised the perfect scheme to steal from the government, but thanks to the great work by my Office of Statewide Prosecution, U.S. Attorney Wifredo A. Ferrer, and our local, state and federal law enforcement agencies, we have stopped the scheme, charged the defendants for their alleged conduct and will hold them accountable in a court of law.”

“To steal from public programs designed to help our neighbors in their greatest time of need is to steal from every taxpayer in Florida, and I’m glad to see that those who participate in the fraudulent schemes will be brought to justice,” said Chief Financial Officer Jeff Atwater. “This partnered investigation displays our shared commitment to aggressively fighting fraud in Florida, and our collective work continues.”

“Our department is committed to not only administering the food assistance program but also protecting its integrity so we can ensure Florida families have the resources they need to get them back on their feet,” said Mike Carroll, Secretary, Florida Department of Children and Families. “Today’s indictments demonstrate the strength of our partnerships and that any individuals stealing from the system will be brought to justice.”

“We utilize our very broad authorities and capabilities to partner with other agencies to disrupt and dismantle these criminal organizations to protect the taxpayer and intended recipients of the programs,” said Robert C. Hutchinson, Acting Special Agent in Charge of HSI Miami.  “This is yet another example of the success of this teamwork.”

“Every Florida taxpayer is a potential victim in food stamp fraud cases.” said FDLE Commissioner Rick Swearingen.  “I appreciate the work of our local, state and federal partners to bring these individuals to justice.”

City of Miami Police Department Chief Rodolfo Llanes, stated “Fraud affects all our communities in a negative manner.  This case exemplified how EBT fraud is so prevalent in our jurisdiction. The Miami Police Department is very proud of its role in this case while working with our state and federal partners in order to bring this case to a successful conclusion.”

The Supplemental Nutrition Assistance Program (SNAP), formerly known as the Food Stamp Program, is a federally funded, national program established by the United States government to alleviate hunger and malnutrition among lower income families.  The United States Department of Agriculture (USDA) administers SNAP through its agency, the Food and Nutrition Service (FNS).  FNS is responsible for the authorization and disqualification of retail food establishments participating in the redemption of SNAP benefits. 

In Florida, SNAP is administered by the State of Florida Department of Children and Families (DCF).  DCF is responsible for overall program administration, as well as approving, denying or revoking assistance for recipients.  FNS and the State of Florida share jointly in the cost of administering the SNAP.  In 1998, DCF changed the format of SNAP benefits in Florida from a traditional paper coupon system to an Electronic Benefit Transfer (EBT) card system.  Recipients use the EBT card, which contains an embedded magnetic strip, to purchase approved food items from participating retailers.  Retailers must apply to and be approved by FNS to participate in the program. Authorized retailers use a point-of-sale (POS) terminal that checks the EBT card information and deducts the cash value of the purchase from the customer’s SNAP benefit balance. SNAP reimbursements are paid to retailers through electronic funds transfers. Retailers bill the government in return for providing approved food items. SNAP retailers, including the defendants, receive instruction regarding the requirements and regulations of the food stamp program, such as that only eligible food items can be exchanged for EBT benefits and that a retailer may never exchange EBT benefits for cash or non-food items.

According to the indictments listed below, the defendants owned and/or operated stores in the Southern District of Florida that were authorized to accept SNAP.  The defendants received instruction regarding the requirements and regulations of the food stamp program.  The defendants allegedly exchanged EBT benefits for cash, in violation of the food stamp program rules.  The defendants and/or their co-conspirators/employees swiped the recipient’s EBT card at a POS machine for an inflated amount, and paid the recipient, in cash, a reduced percentage of the value of food stamp benefits charged on the card.  The defendants would realize a guaranteed, significant profit from each fraudulent transaction.  In most situations, the recipient did not actually receive any food or eligible items in return for their food stamp benefits.  As a result of unlawful cash transactions, the defendants fraudulently obtained more than $13 million dollars in EBT deposits for transactions in which the stores did not provide food.

 

1.         United States v. Karla Rodriguez Diaz and Luis Marzo Machado, Case No. 16-20324-CR-Gayles

According to the indictment, Karla Rodriguez Diaz, 28, of Hialeah, owned a food stand business, Opa Locka Fruit and Produce Market, LLC (“Opa Locka Fruit and Produce”), located at 12705 NW 42nd Avenue, in Opa-Locka, Florida. Diaz applied for, and obtained, authorization to participate in SNAP.  Diaz was the sole authorized signatory on the company’s bank accounts.  Luis Marzo Machado, 30, of Hialeah, is married to Diaz.  Machado originally opened the business, but soon transferred ownership to Diaz, though he continued to work at the business.  Between August 2014 and May 2016, Diaz and Machado were involved in a scheme in which they exchanged food stamp benefits for cash. From August 2014 through March 2016, Diaz and Machado fraudulently redeemed over $2,400,000 in EBT food stamp benefits.

 

2.         United States v.  Pedro Sanchez Barrero and Antonia Barrero, Case No. 16-2621-MJ-Simonton

According to the criminal complaint, Pedro Sanchez Barrero, 26, of Miami, Florida, the owner of a food stand business Pedro Produce, Inc. (“Pedro Produce”), located at 12705 NW 42nd Avenue, in Opa-Locka, Florida.  Pedro Barrero applied for and obtained authorization to participate in SNAP.  From March 2016 through May 2016, Pedro Barrero and Antonia Barrero, 48, of Miami, Florida, were involved in a scheme in which they exchanged food stamp benefits for cash and fraudulently redeemed approximately $2 million in EBT food stamp benefits.

 

3.         United States v. Diocenila Castro, Case No. 16-20319-CR-Moreno

According to the indictment, Diocenila Castro, 49, of Miami, owned a food stand business, Castro Produce, Corp. (“Castro Produce”), located at 12705 NW 42nd Avenue, in Opa-Locka, Florida. Castro applied for and obtained authorization to participate in SNAP.  Between November 2014 and May 2016, Castro was involved in a scheme in which she exchanged food stamp benefits for cash. From November 2014 through March 2016, Castro fraudulently redeemed over $1,500,000 in EBT food stamp benefits.

 

4.         United States v. Matias Jose Ramirez and Jorge Saladrigas Milian, Case No. 16-20306-CR-Williams

According to the indictment, Matias Jose Ramirez, 37, of Miami and Jorge Saladrigas Milian, 56, of Opa-Locka, owned food stand businesses, Ramirez Produce, Corp. (“Ramirez Produce”) and Jorge Produce, Corp. (“Jorge Produce”), located at 12704 NW 42nd Avenue, in Opa-Locka, Florida.  Ramirez and Milian applied for, and obtained, authorization to participate in SNAP.  From at least as early as April 2014 and continuing through March 2016, Ramirez and Milian were involved in a scheme in which they exchanged food stamp benefits for cash.  From April 2014 until March 2016, Ramirez and Milian fraudulently redeemed approximately $1.5 million in EBT food stamp benefits.

 

5.         United States v. Reinaldo Arteaga and Luisdian Hernandez Gonzalez, Case No. 16-20307-CR-Middlebrooks

According to the indictment, Reinaldo Arteaga, 62, of Miami Gardens owned a produce stand, Arteaga Produce, Corp. (“Arteaga Produce”), located at 12705 NW 42nd Avenue, in Opa Locka, Florida. Arteaga applied for, and obtained, authorization to participate in SNAP.  Between August 2014 and May 2016, Arteaga and Luisdian Hernandez Gonzalez, 22, of Miami, were involved in a scheme in which they illegally exchanged food stamp benefits for cash, by swiping EBT cards at Arteaga Produce. From August 2014 through March 2016, Arteaga and Gonzalez fraudulently redeemed over $1,200,000 in EBT food stamp benefits which were deposited into a bank account controlled by Arteaga.

Luisdian H. Gonzalez was also charged in Case No. 16-20321-CR-Gayles for his alleged involvement in a separate food stamp fraud scheme. 

 

6.         United States v. Zulfiqar Mithavayani and Jamal Al-Hawa, Case No. 16-20284-CR-Altonaga 

According to the indictment, Zulfiqar Mithavayani, 51, of Miramar, owned a convenience store, ABC Food Market, located at 163 Northwest 14th Street in Miami, Florida. Mithavayani applied for and obtained authorization to participate in SNAP.  Mithavayani and Jamal Al-Hawa, 60, of Davie, were involved in a scheme in which they illegally sold food stamp benefits in exchange for cash. Since March 2013, Mithavayani and Al-Hawa redeemed and caused to be redeemed over $1,100,000 in EBT food stamp benefits, over $1,000,000 more than the average convenience store in Florida during this period. 

 

7.         United States v. Maikel Manuel Riviaux, Case No. 16-20305-CR-Moore

According to the indictment, Maikel Manuel Riviaux, 42, of Hialeah, owned a seafood market, Pucho Fish Market, located at 2060 NW Opasar Locka Boulevard, in Opa Locka, Florida.  Between December 2014 and May 2016, Riviaux and his co-conspirators were involved in a food stamp fraud scheme.  From May 2015 through March 2016, Riviaux redeemed approximately $1,000,000 in EBT food stamp benefits which were deposited into bank accounts which he controlled.  Riviaux and his co-conspirators used point of sale machines to swipe the recipient’s EBT cards at both Pucho Fish Market at 2060 NW Opa Locka Boulevard, in Opa Locka, Florida and at the Opa Locka Flea market located at 12705 NW 42nd Avenue in Opa Locka, Florida.   

 

8.         United States v.  Jose Antonio Gonzalez and Noraida Pi Figueroa, Case No. 16-20304-CR-Gayles

According to the indictment, Jose Antonio Gonzalez, 45, of Miami Gardens owned a seafood delivery route business, Los Corticos Fish Corpation (“Los Corticos”), located at 3310 NW 171st Terrace, in Miami Gardens, Florida.  Gonzalez applied for, and obtained, authorization to participate in SNAP.  Between May 2015 and May 2016, Gonzalez and Noraida Pi Figueroa, 40, of Miami Gardens, were involved in a scheme in which they exchanged food stamp benefits for cash.  From May 2015 through March 2016, Gonzalez and Figueroa fraudulently redeemed approximately $1,000,000 in EBT food stamp benefits.

 

9.         United States v. Rafael Gonzalez Cuellar and Luis Casola Rojas, Case No. 16-20322-CR-Altonaga

According to the indictment, Rafael Gonzalez Cuellar, 54, of Opa Locka owned a food stand business, Cuellar Produce, Corp. (“Cuellar Produce”), located at 12705 NW 42nd Avenue, in Opa-Locka, Florida. Cuellar applied for, and obtained, authorization to participate in SNAP.  Between January 2015 and May 2016, Cuellar and Luis Casola Rojas, 43, of Hialeah, were involved in a scheme in which they exchanged food stamp benefits for cash. From January 2015 through March 2016, Cuellar fraudulently redeemed over $900,000 in EBT food stamp benefits.

Luis Casola Rojas was also charged in Case No. 16-20323-CR-Moore for his alleged involvement in a separate food stamp fraud scheme. 

 

10.       United States v. Katia Nunez Landerio, Case No. 16-20283-CR-Gayles

According to the indictment, Katia Nunez Landeiro, 35, of Miami, owned a food stand business, Katy Produce, Corp. (“Katy’s Produce”), located at 12704 NW 42nd Avenue, in Opa-Locka, Florida. Landeiro applied for, and obtained, authorization to participate in SNAP.  Between July 2014 and March 2015, Landeiro was involved in a scheme in which she exchanged food stamp benefits for cash. Reyes fraudulently redeemed over $700,000 in EBT food stamp benefits.

 

11.       United States v. Idaysi Landeiro Reyes and Javier Gallardo Gonzalez, Case No. 16-20309-CR-Scola

According to the indictment, Idaysi Landeiro Reyes, 47, of Miami Gardens, owned a food stand business, Landeiro Produce, Corp. (“Landeiro Produce”), located at 12705 NW 42nd Avenue, in Opa-Locka, Florida. Reyes applied for and obtained authorization to participate in SNAP. Reyes and Javier Gallardo Gonzalez, 47, of Miami Gardens, were involved in a scheme in which they exchanged food stamp benefits for cash. From July 2015 through March 2016, Reyes fraudulently redeemed and caused to be redeemed over $600,000 in EBT food stamp benefits.

 

12.       United States v. Nelson Chico and Luisdian H. Gonzalez, Case No. 16-20321-CR-Gayles

According to the seven-count indictment, Nelson Chico, 59, of Hialeah owned a produce stand, Rey Produce, Corp. (“Rey Produce”), located at 12705 NW 42nd Avenue, in Opa-Locka, Florida. Chico applied for, and obtained, authorization to participate in SNAP.  Between September 2014 and March 2016, Chico and Luisdian H. Hernandez, 22, of Hialeah, were involved in a scheme in which they exchanged food stamp benefits for cash, by swiping EBT cards at Rey Produce. From September 2014 until March 2016, Chico and Hernandez redeemed over $600,000 in EBT food stamp benefits which were deposited into a bank account that Chico controlled. 

 

13.       United States v. Fernando Fernandez Garcia, Case No. 16-20320-CR-Lenard

According to the indictment, Fernando Fernandez Garcia, 33, of Miami, owned a food stand business, Santa Cruz Shark Inc., (“Santa Cruz Shark”) located at 12704 NW 42nd Avenue, in Opa-Locka, Florida. Garcia applied for, and obtained, authorization to participate in SNAP.  Between December 2014 and May 2016, Garcia was involved in a scheme in which he and his employees exchanged food stamp benefits for cash. From December 2014 through March 2016, Garcia fraudulently redeemed over $500,000 in EBT food stamp benefits.

 

14.       United States v. Luis Casola Rojas, Case No. 16-20323-CR-Moore

According to the indictment, Luis Casola Rojas, 43, of Hialeah, owned a food stand business, Casola Produce, Corp. (“Casola Produce”), located at 12705 NW 42nd Avenue, in Opa-Locka, Florida. Rojas applied for, and obtained, authorization to participate in SNAP.  Between September 2015 and May 2016, Rojas was involved in a scheme in which he exchanged food stamp benefits for cash. From October 2015 through March 2016, Rojas fraudulently redeemed over $380,000 in EBT food stamp benefits.

 

15.       United States v. Angelo Socarras, Case No. 16-20308-CR-Cooke

According to the indictment, Angelo Socarras, 37, of Hialeah, owned a food stand business, Angelo Produce, Corp. (“Angelo Produce”), located at 12705 NW 42nd Avenue, in Opa-Locka, Florida. Socarras applied for and obtained authorization to participate in SNAP.  From October 2015 through March 2016, Socarras was involved in a scheme in which he exchanged food stamp benefits for cash and fraudulently redeemed approximately $190,000 in EBT food stamp benefits.

 

If convicted of the charged conduct, a defendant faces a possible maximum statutory sentence of 20 years’ imprisonment for conspiracy to commit wire fraud; 20 years’ imprisonment for wire fraud; and 5 years’ imprisonment for food stamp/EBT fraud.

U.S. Attorney Ferrer acknowledged the dedicated efforts of the Florida Attorney General, Florida Department of Children and Families, Florida Department of Financial Services to provide services to the community and identify for prosecution those individuals who compromise public benefits.  Mr. Ferrer also commended the investigative efforts of USDA-OIG, PBSO and MPD, and expressed his gratitude to ICE-HSI, FDLE, U.S. Marshals Service, MDPD and the United States Coast Guard (District 7), for their assistance with the investigation and law enforcement operation.  Mr. Ferrer recognized Assistant United States Attorneys Timothy J. Abraham, Miesha S. Darrough, Anne P. McNamara, Daya Nathan, Jonathan K. Osborne, Brian J. Shack, and Jonathan D. Stratton, who are prosecuting these cases.

A complaint or an indictment is only an accusation and a defendant is presumed innocent unless and until proven guilty in a court of law.      

Related court documents and information may be found on the website of the District Court for the Southern District of Florida at www.flsd.uscourts.gov or on http://pacer.flsd.uscourts.gov

Updated May 11, 2016