Memphian Sentenced to Federal Imprisonment for $2.8 Million Federal Benefit Fraud Scheme
Memphis, TN – A Memphis man who masterminded a federal benefit fraud scheme that cost the government approximately $2.8 million has been sentenced to 37 months in federal prison. Edward L. Stanton III, U.S. Attorney for the Western District of Tennessee, announced the sentencing today.
From October 2011 to December 2013, Remark Chism, 35, defrauded two public assistance programs: Supplemental Nutrition Assistance Program (SNAP) benefits and Child Care Certificate Program.
Chism, along with co-conspirators, recruited multiple SNAP recipients willing to sell their allotted benefits for amounts less than face value. The benefits were redeemed through Maxi Foods, a grocery store owned by Chism, for full monetary value. More than $1.9 million in SNAP benefits were unlawfully redeemed for cash over the two-year period.
SNAP (formerly known as Food Stamps) is a program designed to help low- and middle-income families purchase food. A SNAP beneficiary is provided a designated amount of funding each month via a rechargeable Electronic Benefits Transfer (EBT) card. Cardholders are able to use the allotted funding to purchase eligible food items at authorized retailers. Maxi Foods possessed a SNAP EBT card system, enabling SNAP beneficiaries to pay for eligible food items with their EBT card.
Chism also masterminded a scheme to defraud the Certificate Program, which provides federal funding to assist underprivileged families with child care costs, from October 2011 to December 2013. Chism, along with co-conspirators, paid cash to parents who qualified for Certificate Program benefits in exchange for use of their child care certificates. After acquiring the information, Chism would falsely report the children’s attendance at his daycare center, K.A.R.E. 3 Enrichment Center, and receive reimbursement for care.
The loss to the Certificate Program through K.A.R.E. is estimated at more than $986,000 over the two-year period.
In June 2015, Chism pled guilty today to one count of conspiracy to commit SNAP benefit fraud, one count of conspiracy to commit child care benefit fraud, and one count of false statements.
On Wednesday, October 28th, Judge Samuel H. Mays sentenced Chism to 37 months in prison on each of the counts. The prison terms will be served concurrently. Chism was also ordered to pay more than $2.8 million dollars in restitution.
This investigation was conducted by the United States Department of Agriculture Office of the Inspector General; United States Secret Service; United States Marshals Service; Memphis Police Department Organized Crime Unit; and the Tennessee Department of Human Services.
Assistant U.S. Attorneys Larry Laurenzi and Debra Ireland prosecuted the case on the government’s behalf.