Owners of SF Store Arrested for Defrauding Food Stamp Program of $480K
By Candice Naranjo
Thu Jul 10th, 2014 12:27pm America/Los_Angeles
SAN FRANCISCO — The owners of a food store in San Francisco’s Chinatown and two co-conspirators have been arrested and charged with defrauding the state’s food stamp program of over $480,000, according to the district attorney’s office.
The owners of Ivy’s Food Company located at 1216 Stockton St., Ivy Lai and Alan Wan, both 55, were arrested Tuesday after an investigation conducted by federal and local agencies.
They are accused of soliciting individuals who received CalFresh benefits, formerly known as food stamps, to purchase their benefits from them for a fraction of their cash value.
Nelson Tse, 47, and Cam Zenh Mong, 43, both of San Francisco, were also arrested Tuesday for their alleged involvement in the scheme.
The store owners and the two other conspirators were allegedly buying the program benefits in exchange for cash and then the store would report that the program recipients were making purchases at the store through the food stamps program, according to the district attorney’s office.
The CalFresh program, which is the name of the Federal Supplemental Nutritional Assistance Program, or SNAP, in California, provides food assistance to low-income families and individuals.
Food stamp recipients use an electronic benefit transfer, or EBT, card which functions like a debit card to purchased certain food items at participating stores, such as Ivy’s Food Company.
Money is added to the EBT account at the beginning of the month. In this case, the storeowners and others allegedly bought the card numbers and associated passwords from customers for cash and charged false food purchases to the program, according to the district attorney’s office.
The CalFresh program would reimburse Ivy’s Food Company for the food purchases that had never occurred.
Lai and Wan are both charged with conspiracy, misappropriation of public funds, 22 violations of CalFresh benefits fraud, six counts of money laundering and face additional enhancements.
If convicted of all charges, Lai and Wan each face a maximum of 24 years and eight months in prison, according to the district attorney’s office.
Tse is also charged with conspiracy, misappropriation of public funds and three counts each of felony and misdemeanor violations of CalFresh benefits fraud. Tse also faces additional enhancements.
If convicted of all charges, he faces up to eight years in prison, according to district attorney’s office.
The fourth suspect, Mong, is out on bail and has not yet been charged, according the district attorney’s office.
Between June 2012 and June 2014, the storeowners and the two others allegedly defrauded the CalFresh program of over $480,000, based on investigation by the U.S. Department of Agriculture’s Office of the Inspector General, the San Francisco Human Services Agency, San Francisco police and the district attorney’s office.
“Ripping off a government assistance program that helps those who can’t afford to put food on the table is pretty low,” District Attorney Gascón said in a statement.
Three of the defendants, Lai, Wan, and Tse are scheduled to be arraigned Friday. Lai and Wan each remain in custody under $1 million bail. Tse is being held under $100,000 bail.
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