Politics & Government

S.J. Man Pleads Guilty to Stealing $2.5 Million in Food Stamp Reimbursements

Alexander Vargas pleaded guilty to exchanging food stamps for cash.

A Camden man pleaded guilty to stealing over $2.5 million from the federal government via a scheme involving food stamps, U.S. Attorney Paul J. Fishman announced on Wednesday.

Alexander D. Vargas, 34, pleaded guilty to an information charging him with stealing U.S. government money by ilegally purchasing Supplemental Nutrition and Assistance Program (SNAP) benefits for about 50 cents on the dollar at a Eddie's Grocery Store, where he was one of two managers from January of 2012 through December of 2012.

Eddie's was authorized to accept SNAP benefits. Stores approved to accept SNAP benefits are authorized to sell food in exchange for food stamp benefits, but they can’t exchange those benefits for cash.

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Every food stamp recipient receives an Electronics Benefit Transfer (EBT) card that works the same way as a debit card. Eddie’s Grocery had an account at Sovereign Bank to receive reimbursements for SNAP benefits.

When Eddie’s was approved to participate in the program in 2007, the owner estimated the store would generate receipts of $280,000 annually, but actual reimbursements exceeded that estimate by about $2.8 million in 2012, Fishman said.

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Additionally, between June 7, 2012 and Oct. 4, 2012, an undercover officer and a cooperating witness exchanged $1,359.75 in SNAP benefits for $650 cash, Fishman said.

Bank records show Eddie’s withdrew a total of $3,109,776 in 2012, with $2,548,510 in cash withdrawals beginning in February, when Vargas was added as an authorized cosigner on the account. Vargas’s name was on 40 withdrawals totaling $1,869,266, Fishman said.

Vargas faces a maximum potential penalty of 10 years in prison and a $250,000 fine, or twice the gross gain or loss from the offense, Fishman said.

He agreed to forfeit 22,273 seized from him when he was arrested on May 16 of this year. He also agreed to the entry of a forfeiture money judgment for $2,981,642.

He is scheduled to be sentenced on Feb. 5, 2014. 


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