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Justice News

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

FOR IMMEDIATE RELEASE
Wednesday, June 3, 2015

Two Memphians Plead Guilty to Defrauding Federal Government of an Estimated $3 Million

Memphis, TN Two Memphians have pled guilty to partaking in a federal benefit fraud scheme that cost the government an estimated $3 million.

Remark Chism, 35, and Erica Pitchford, 36, both face prison time for their roles in defrauding two public assistance programs: Supplemental Nutrition Assistance Program (SNAP) benefits and Child Care Certificate Program.

From October 2011 to December 2013, Chism, with occasional assistance from Pitchford, recruited multiple SNAP recipients willing to sell their allotted benefits for amounts less than face value. The two subsequently redeemed the benefits 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 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.

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. He faces a maximum sentence of 15 years and a maximum fine of $750,000.

Pitchford pled guilty to one count of conspiracy to commit SNAP benefit fraud. She faces a maximum sentence of five years and a maximum fine of $250,000.

Chism is scheduled to be sentenced on September 24 at 1:30 p.m. by Judge Samuel H. Mays.

Pitchford is scheduled to be sentenced September 25 at 9 a.m. by Judge Samuel H. Mays.

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. This case is being prosecuted for the government by Assistant U.S. Attorneys Larry Laurenzi and Debra Ireland.

Updated June 4, 2015