Quincy Store Owner Indicted in Connection with State EBT Fraud
QUINCY – A Quincy store owner has been indicted in connection with the fraudulent use of the Supplemental Nutrition Assistance Program (SNAP), known commonly as “food stamps,” Attorney General Martha Coakley’s Office announced today.
“We allege that this defendant engaged in a scheme to unlawfully exchange food stamps for cash,” said AG Coakley. “This scheme defrauded taxpayer dollars for the defendant’s personal profit.”
Pat Lu, age 48, of Quincy, was indicted yesterday by a Statewide Grand Jury on charges of Larceny over $250, Procurement Fraud, and Access Device Fraud.
The investigation into the fraudulent use of EBT SNAP cards began in November 2011 after a referral from the Quincy Police Department. As a result of that investigation, State Police assigned to AG Coakley’s Office, in conjunction with federal agents from the United States Department of Agriculture (USDA) and Quincy Police, executed a search warrant at Lotto Luck (D.B.A Pat’s Mini Mart) located in Quincy.
On April 19, investigators arrested Lu, owner of Pat’s Mini Mart, in connection with his involvement in an ongoing criminal scheme to defraud the EBT SNAP program. Lu was arraigned in Quincy District Court on April 19. Lu was indicted yesterday by a Statewide Grand Jury and will be arraigned in Norfolk Superior Court at a later date.
Pat’s Mini Mart is a convenience store that primarily sells beverages, candy and other convenience items. Pat’s Mini Mart was authorized by the USDA to accept SNAP benefits from customers for eligible items. Authorities alleged that Lu engaged in a scheme to traffic SNAP benefits in exchange for cash. As part of the scheme, customers presented their EBT card to Lu and another store clerk. Authorities allege that Lu or the clerk would swipe the customer’s EBT card and enter fraudulent information on a dedicated EBT terminal indicating that a customer purchased groceries. Lu or the clerk would allegedly furnish cash to the customer for a half of what he charged to their EBT card account. For example, if an EBT card customer wanted $50 in cash, Lu would provide the customer with $50 cash and enter a $100 grocery sale. Lu’s account would subsequently be credited with $100 from the customer’s EBT SNAP account, providing Lu with a $50 profit on the transaction.
The SNAP program does not allow cash to be exchanged in lieu of benefits.
In the months before his arrest, it is alleged that Pat’s Mini Mart was transacting about $70,000 per month in mostly fraudulent sales. It is estimated that Lu’s cut each month resulted in roughly $30,000. Investigators allege that between October 2010 and April 2012, Pat’s Mini Mart processed approximately $800,000 worth of fraudulent SNAP transactions.
These charges are allegations, and the defendants are presumed innocent until proven guilty. The investigation into the fraudulent use of EBT SNAP benefits remains ongoing.
The case is being prosecuted by Assistant Attorney General Michael Pine of AG Coakley’s Public Integrity Division and Gabe Thornton from AG Coakley’s Insurance and Unemployment Fraud Division, with assistance from Financial Investigator Brian Bukuras of the AG’s Financial Investigations Division and Victim Witness Advocate Shannon Legrice. Examiners from AG Coakley’s Computer Forensics Laboratory also assisted in this case. The investigation was handled by Massachusetts State Police assigned to the Attorney General’s Office. Investigators from the Quincy Police Department, Department of Transitional Assistance (DTA), and the U.S. Department of Agriculture – Office of Inspector General assisted in the investigation.