ALBANY, N.Y. -- New York Attorney General Eric T. Schneiderman announced on Thursday a 60-count indictment lodged against two Suffolk County convenience store owners and 24 Supplemental Nutrition Assistance Program (SNAP, formerly known as the Food Stamp Program) recipients for illegally trading cash for hundreds of thousands of dollars in SNAP benefits.
Ravinder Parkash, 59, the owner of Shivani Enterprises Inc., Riverhead, N.Y., is charged with felony grand larceny and money laundering for orchestrating a scheme to steal more than $670,000 from the government program. His wife, Prabha Rani, 58, and the two-dozen recipients also face significant theft charges. If convicted, Parkash faces up to 15 years in prison. His wife faces up to seven years. The recipients are faced with lesser counts of felony grand larceny and faced up to 4 years in prison.
"The conduct alleged in this case became even more heinous when we found that the defendants stole emergency benefits for victims of Hurricane Sandy, and used it for their own selfish purposes," Schneiderman said. "Not only do we seek to recoup the losses suffered by the food program, but we also intend to seek justice for the public and punishment for the perpetrators who defrauded it."
Suffolk County District Attorney Thomas J. Spota said, "These defendants used phantom transactions to steal hundreds of thousands of dollars from taxpayers, and exploited post-Sandy assistance to pocket even more illegal proceeds."
Schneiderman filed a civil suit seeking restitution in an amount of $674,638 and damages in an amount of $2,023,914 for violations of the New York False Claims Act, against Parkash, Rani and their business, Shivani Enterprises, which was also criminally charged.
In the wake of Hurricane Sandy, the U.S. Department of Agriculture (USDA) allocated an additional 50% in benefits to all SNAP recipients in affected areas without regard to need. Each of the recipients charged in this case received Sandy benefit and illegally used their cards for cash in the months after the storm.
SNAP recipients are issued a benefit card to purchase specified food items. But, according to the indictment unsealed today, Parkash and his wife processed phantom SNAP transactions in cooperation with the 24 SNAP cardholders without selling them any food from April 2010 to June 2013. The owners gave the cardholders cash equaling up to half of the amount of the fake purchase and kept the remainder of the money for themselves.
The 18-month investigation revealed that in 2012 alone, Parkash and Rani rang up over $329,000 in SNAP benefits. That is significantly higther than stores located within a one mile radius of the business, where the totals were no higher than $6,439 and in one case just $371. In every month since November 2011, Parkash and Rani redeemed more than $22,000 in SNAP benefits. This number spiked to over $36,000 in November 2012 and $30,000 in December 2012, after all SNAP card holders in Suffolk County received the emergency Hurricane Sandy SNAP award equal to 50% of their monthly benefit.
The money laundering charge filed against Parkash is the result of his use of a bank account set up for the use of New York State Lottery business that came into his store, but which he used to launder proceeds of his illegal scheme.
Also indicted were Brenda Richardson, 50, of Riverhead; Eric Brown Jr., 24, of Riverhead; and Anthony Durham Jr., 26, of Riverhead. They have not yet been apprehended.
The charges are accusations and the defendants are presumed innocent unless and until proven guilty.
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