Ex-Grocery Store Owner Sentenced for Food Stamp Scheme

Older Food coupons. Tim Boyle/Getty Images

NEWARK, N.J.—The former owner of a small grocery store in New Jersey’s largest city is headed to prison for her role in a food stamps for cash scheme that cheated the government out of more than $885,000.

Maria Teresa Venegas received a 2-year sentence Feb. 20, and must pay $888,487 in restitution. Upon finishing her stay in prison, Venegas will be subject to two years of supervised release, according to a release by the U.S. Attorney’s office, District of New Jersey.

Federal prosecutors say Venegas owned Jenny’s Deli in Newark from November 2011 to March 2018. During that time, she illegally gave some customers cash in return for their food stamp benefits.

The Newark woman had pleaded guilty last September to a fraud count.

Her father, Manuel Venegas, 54 also pleaded guilty in the case to the same charge on Oct. 30. He could face 20 years in prison when he gets sentenced on March 6.

Manuel was an employee at Jenny’s Deli, according to documents filed in the case and statements released in the court.

Canned tomatoes line the shelves of a pantry at the SF-Marin Food Bank in San Francisco, California on May 1, 2014. Justin Sullivan/Getty Images

“In addition to the high volume of SNAP benefits redemptions for Jenny’s Deli, indicating fraud, law enforcement agents verified the fraudulent exchange of SNAP benefits for cash through the use of an undercover law enforcement agent who engaged in approximately 20 “purchases” at Jenny’s Deli where Manuel Venegas, Maria Teresa Venegas, or another Jenny’s Deli employee acting at their direction exchanged money for SNAP benefits,” the release said.

Jenny’s Deli was authorized to accept food stamps scheme benefits, a program administered by the United States Department of Agriculture.

“Retail food stores approved for participation in SNAP may sell food in exchange for SNAP benefits but may not exchange SNAP benefits for cash,” the Department of Justice said.

Many Cases of Food Stamps Fraud

Supplemental Nutrition Assistance Program (SNAP) currently benefits 19 million households and amounts to $4.8 billion in benefits a month, according to the Centre on Budget and Policy Priorities.

State agencies completed 963,965 food stamp fraud investigations in 2016, a 33.31 percent increase from 723,111 investigations in FY 2015, according to statistics from the United States Department of Agriculture (USDA).

Harlem residents pack free groceries at the Food Bank For New York City in New York City on Dec. 11, 2013. John Moore/Getty Images

“In SNAP, fraud is typically defined as the exchange of benefits for cash or other ineligible items (trafficking) or purposefully misrepresenting information on your SNAP application in order to receive benefits that you are not entitled to or more benefits than you are entitled to receive,” said the USDA.

The largest food stamp fraud, worth $20 million, happened in South Florida. The Justice Department called it “the largest combined financial fraud loss for a food stamp trafficking takedown in history.”

Twelve defendants were charged federally with collectively receiving over $20 million from the USDA by fraudulently trading food stamps for cash, according to a release by the Department of Justice.

“The indictments allege that the retailers received more than $20 million in federal payments for transactions in which they did not provide any food, a fraud scheme commonly known as ‘food stamp trafficking.’ Stores and vendors allegedly took illicit profits from the fraudulent transactions with food stamp recipients,” the Department of Justice said.

The Associated Press contributed to this report.