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Justice News

Department of Justice
U.S. Attorney’s Office
Western District of Kentucky

Friday, November 10, 2017

Louisville Business Owner Convicted Of Defrauding A United States Department Of Agriculture Program

Owner of the Meat Store convicted of Food Stamp Fraud

 LOUISVILLE, Ky. – The former owner of a Louisville specialty food store was convicted in United States District Court yesterday, before Senior Judge Thomas B. Russell, of Food Stamp fraud, following a four day jury trial announced United States Attorney Russell M. Coleman.  

Elias Estephane was the owner of the Meat Store located at 1066 South 28th Street and the Meat Store 2 located at 4835 Poplar Level Road. Both were specialty food stores focusing on meats and both were accepted as Supplemental Nutrition Assistance Program (SNAP), or Food Stamp retailers. SNAP is a program administered by the United States Department of Agriculture (USDA) to provide food-purchasing assistance to low-income individuals through the issue of (EBT) cards to recipients.  Evidence at trial showed that on multiple occasions Estephane traded cash for SNAP benefits, in violation of program rules that only permit benefits to be exchanged for eligible food items.  Estephane generally paid customers fifty cents on the dollar for their benefits. 

In 2015, the USDA and the Federal Bureau of Investigation (FBI) began investigating the Meat Store’s redemption of SNAP benefits. They targeted the Meat Store because it had a significantly higher level of redemption of SNAP benefits compared to similar stores in the area. Specifically, the Meat Store’s month-to-month SNAP redemptions in 2015 were around 20 times the average redemptions from similar stores in the same geographic area.

During the course of the investigation, USDA and FBI sent two undercovers into the Meat Store to attempt to sell SNAP benefits for cash. Between September 1, 2015, and July 12, 2016, the two undercovers exchanged SNAP benefits for cash with defendant Estephane at the Meat Store on nine different occasions, eight of which were captured on video. Sometimes the undercovers would present multiple SNAP EBT cards in different names and request cash from all of them.

During the trial, the United States submitted surveillance video of the Meat Store from four different days then compared transaction data with the video, flagging instances in which people spent $100 or more but left the store holding only one bag.  Further the United States had five customer witnesses and one former employee testify.

Sentencing is scheduled before Senior Judge Russell in February 2018. Estephane faces up to five years in prison, three years of supervised release, restitution and a fine of up to $10,000. 

The case was prosecuted by Assistant United States Attorneys Amanda E. Gregory and Stephanie M. Zimdahl, with the assistance of paralegal Mary Kennedy, and was investigated by U.S. Department of Agriculture, Office of Inspector General and the Federal Bureau of Investigation (FBI).

Financial Fraud
Updated November 10, 2017