TAMPA, Fla. — A Sarasota man pleaded guilty Tuesday to theft of government funds in relation to a food stamp fraud scheme perpetrated at his convenience store, Las Americas Latin Market. The guilty plea resulted from an investigation by U.S. Immigration and Customs Enforcement's (ICE) Homeland Security Investigations (HSI), the U.S. Department of Agriculture, the Internal Revenue Service's Criminal Investigation Division and the Sarasota Police Department.
According to the plea agreement, Carlos Chavez, 46, has been the partial owner and operator of More 4 Less Grocery Store Inc., most recently operating as Las Americas Latin Market, on N. Washington Boulevard in Sarasota.
Since August 2009, Las Americas has participated in the Supplemental Nutrition Assistance Program (SNAP), formerly known as the Food Stamp Program. SNAP was established by the U.S. federal government to alleviate hunger and malnutrition among low and middle income families by increasing their food-purchasing power and ability. The U.S. Department of Agriculture administers SNAP. Regulations mandate that retail businesses are prohibited from purchasing SNAP benefits in exchange for cash, a practice commonly known as cash-back.
Between February 2010 and March 2012, Chavez conducted numerous illegal cash-back transactions with SNAP recipients at Las Americas. Chavez collected a substantial fee for providing this cash-back service to SNAP recipients – typically 25 to 50 percent of the overall SNAP transaction. For example, if a SNAP recipient requested $50 cash back, Chavez would generally charge $100 to the recipient's SNAP-issued debit card. When the $100 purchase was authorized, he would give the SNAP recipient $50 in cash, and within 48 hours, Las Americas would receive a $100 payment from the U.S. Department of Agriculture. This illegal activity resulted in a loss of $735,886 in SNAP benefits to the U.S. Department of Agriculture.
In February 2011, law enforcement officials noticed that there were numerous suspicious SNAP transactions at Las Americas. For instance, Las Americas' SNAP redemptions far exceeded those of similar convenience stores and even medium-size grocery stores in the immediate area. Also, between February 2010 and March 2012, Las Americas' SNAP redemptions far exceeded state and national averages by 1,300 percent. After law enforcement officials executed a search warrant at Las Americas, SNAP redemptions at the store fell precipitously.
Chavez faces a maximum penalty of 10 years in federal prison.