Multiple Defendants Arrested and Charged for Defrauding CalFresh EBT Assistance Program of over $480,000

FOR IMMEDIATE RELEASE
July 9, 2014
Twitter: @GeorgeGascon

CONTACT:

Alex Bastian (415) 553-1931
Maxwell Szabo, (415) 553-9089


MULTIPLE DEFENDANTS ARRESTED AND CHARGED FOR DEFRAUDING CALFRESH EBT ASSISTANCE PROGRAM OF OVER $480,000

SAN FRANCISCO, CA – Multiple defendants have been arrested and charged with soliciting recipients of CalFresh Benefits, formerly known as Food Stamps, to sell their benefits for a fraction of its cash value. Between June of 2012 to June of 2014, it is estimated that the defendants defrauded the CalFresh program of over $480,000. The CalFresh program, the name of the Federal Supplemental Nutritional Assistance Program (SNAP) in California, provides assistance to low-income families and individuals to help them buy food. The defendants are charged with Conspiracy to Commit Fraud, Misappropriation of Public Funds, Food Stamp Fraud and Money Laundering.

“These conspirators are accused of defrauding a system designed to help the most vulnerable among us,” said District Attorney George Gascón. “Ripping off a government assistance program that helps those who can’t afford to put food on the table is pretty low.”

The CalFresh Program provides assistance to low income families and individuals to help them buy food. Eligible individuals receive an electronic benefit transfer (EBT) card, which operates like a debit card, and recipients use the EBT card to purchase approved food items from participating retailers. Benefits, which are in the form of dollars, are added to the recipients’ EBT accounts at the beginning of each month so the recipients can use their card to purchase food. On multiple occasions over an eleven month period, the co-conspirators would solicit recipients to sell their benefits for a fraction of its cash value. The co-conspirators would obtain the card numbers and PIN numbers from recipients and then use the card devices registered to Ivy’s Food Company to charge false food purchases to the program. The CalFresh Program would reimburse Ivy’s Food Company for the food purchases that had never occurred. The owners of Ivy's Food Company, Ivy Lai and Alan Wan, are the two additional defendants in the case.

"We appreciate the efforts of law enforcement and the District Attorney's Office as they protect the integrity of the safety net programs that are in place to benefit low income families and individuals in our community," said Trent Rhorer, Executive Director of SF Human Services Agency.

"We continue to work with our federal partners to combat this criminal activity. WIC and SNAP provide services for our community members that are in most need. We want to make sure that we do our part to assist with preventing abuse of these services. " said SFPD Acting Chief Lyn Tomioka.

Owners of Ivy’s Food Company, Ivy Lai and Alan Wan, both age 55 and of San Francisco, are charged with the following: a felony violation of Penal Code Section 182(a)(4) – Conspiracy; a felony violation of Penal Code Section 424(a) – Misappropriation of Public Funds; 22 felony violations of Welfare and Institutions Code Section 10980(g) – CalFresh Benefits Fraud; and 6 felony violations of Penal Code Section 186.10 – Money Laundering. Further, there are allegations of the aggravated white collar enhancement pursuant to Penal Code Section 186.11 and an excessive taking allegation pursuant to Penal Code Section 12022.6(a)(2). If convicted of all charges, they face a maximum of twenty-four years and eight months in state prison.

Nelson Tse, age 47 and also of San Francisco, is charged with a felony violation of Penal Code Section 182(a)(4) – Conspiracy; a felony violation of 424(a) – Misappropriation of Public Funds; 3 felony violations of Penal Code Section 10980(g) – CalFresh Benefits Fraud; 3 misdemeanor violations of Welfare and Institutions Code Section 10980(b) – CalFresh Benefits Fraud. Further, there are allegations of the aggravated white collar enhancement pursuant to Penal Code Section 186.11 and an excessive taking allegation pursuant to Penal Code Section 12022.6(a)(2). If convicted of all felonies, he faces a maximum of eight years in state prison.

A fourth defendant, Cam Zenh Mong, age 43 and also a San Francisco resident, was arrested in connection with this case and a charging decision is forthcoming.

The arrests are a result of an investigation by the United States Department of Agriculture’s Office of the Inspector General, the San Francisco Human Services Agency, Sgt. Joe McCloskey of the San Francisco Police Department and the District Attorney’s Bureau of Investigations.

Three of the defendants, Ivy Lai, Allan Wan, and Nelson Tse are scheduled to be arraigned today at 1:30 pm in Department 9.

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