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Financial Crimes
09/30/2013

San Diego-area grocery store owners arrested for food stamp program fraud

HSI special agents arrest market owner for defrauding federal and state food stamp program
HSI special agents arrest market owner for defrauding federal and state food stamp program
SAN DIEGO – The owners of two El Cajon neighborhood markets are expected to appear in state court tomorrow on charges they defrauded a state and federal food stamp program out of hundreds of thousands of dollars.

Rod Toma, 57, and Serror Zakar, 49, were taken into custody by federal agents Monday morning. Both men are charged with two counts of fraud for electronically submitting hundreds of phony claims involving the sale of non-food items and cash from the electronic-based food stamp program known as SNAP, the Supplemental Nutrition Assistance Program. If convicted, Toma could face up to five years in state prison. Zakar is facing a maximum sentence of three years in state prison for each count.

The charges are the result of a yearlong undercover probe by U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigators (HSI) and the U.S. Department of Agriculture’s (USDA) Office of Inspector General in San Diego. The San Diego County District Attorney’s Office also provided substantial support.

"Exploiting government food stamp programs for financial gain is a serious crime that hurts the most vulnerable," said Derek Benner, special agent in charge for ICE HSI in San Diego. "HSI is committed to using our financial expertise to uncover and wipe out fraudulent schemes that misuse a system intended to serve those in need of nutritional assistance."

"USDA OIG is engaged in extensive efforts to protect the integrity of SNAP," said Lori Chan, special agent in charge for the United States Department of Agriculture (USDA), Office of Inspector General (OIG), Western Region. "Pursuing fraud in the SNAP program is a major investigative priority for OIG. We conduct investigations across the U.S. to deter and uncover criminal activity affecting vital USDA nutrition programs. Retailers who engage in SNAP fraud exploit the program’s needy beneficiaries, and misuse the substantial funding that taxpayers provide. OIG investigators are determined to help ensure SNAP funds are used for their intended purpose – feeding families – not for the enrichment of criminal enterprises."

In affidavits filed in state court, both defendants are accused of defrauding the SNAP program, which is administered by the USDA and the California Department of Public Social Service. Individuals enrolled in SNAP are permitted to purchase only essential food items from approved vendors using a SNAP debit card.

Toma, owner of Arturos Market in El Cajon, is accused of bilking the SNAP program out of approximately $436,000 since July 2011. Some of the fraudulent transactions also included a fee for cash. Investigators estimate Arturo’s Market, which has been participating in the food stamp program since 2009, conducts approximately $40,000 in SNAP transactions each month.

In the second case, Zakar, owner of Athens Market in El Cajon, is accused of defrauding the program out of at least $50,000 for falsely submitting SNAP transactions that included prohibited non-food items and cash. After an extensive review of the market’s financial records, investigators determined the business conducted approximately $200,000 in SNAP transactions from February 2012 to May of this year.

As part of the investigation, undercover agents posed as customers and used SNAP cards at both markets. Investigators conducted multiple prohibited transactions, obtaining cash and buying cleaning supplies and cosmetics. Both markets processed the prohibited transactions and charged an additional fee, ranging from $10 to $20 for cash. The transactions were fraudulently submitted and funded by money transferred from the government’s computer after the SNAP card was swiped on the market’s point of sale device at the checkout counter.

Editors Note: To schedule an interview with HSI and obtain b-roll of the operation, please contact Lauren Mack at 619-791-7921 or by email at Lauren.Mack@dhs.gov.

Updated on Sept. 30, 2013.