State Obtains Indictments Against 14 For Allegedly Defrauding Federal Nutrition Program

TRENTON – Fourteen grocery store owners and employees have been indicted for conspiring to steal more than $1 million from the federally funded Women, Infants and Children (WIC) nutrition program by means of fraudulent vouchers, Attorney General Paula T. Dow and Criminal Justice Director Stephen J. Taylor announced today. An Elizabeth and an Edison resident are among the defendants; the stores are located in Newark, Camden, East Orange and Irvington.

According to Taylor, the Division of Criminal Justice obtained a seven-count state grand jury indictment on Thursday, Nov. 10, charging all 14 defendants, including 12 grocery store owners and two employees, with conspiracy, money laundering, official misconduct, theft by deception and other related charges. The indictment was not made public until today so that arrests could be completed.

An investigation by the Division of Criminal Justice Corruption Bureau revealed that between July 2004 and April 2007, three former clerks employed by the Newark WIC Program conspired to issue more than $1 million in fake vouchers. The clerks – a man and two women – have pleaded guilty in the state’s investigation and face prison sentences. A supermarket owner pleaded guilty to purchasing the fraudulent vouchers from the clerks and reselling them by the stack to other grocery store owners. Ultimately, the fraudulent vouchers were deposited into the bank accounts of more than 20 WIC-authorized vendors throughout New Jersey. The defendants indicted today allegedly stole from the WIC program by obtaining funds using false vouchers without actually providing any food products to WIC participants.

“The WIC clerks who pled guilty in this case generated fraudulent vouchers like they were printing counterfeit currency, but we allege that they could not have cashed in on their scheme without the complicity of store owners like these defendants,” said Dow. “The stolen funds, which totaled well over $1 million, should have supplied vital nutrition for disadvantaged children. Instead, the defendants fed their greed.”

The defendants include John Cepeda, 35, of Elizabeth, employee/manager of Los Tiburones on Bergen Street in Newark and Ashvin C. Patel of Edison, owner of OM Groceries on Broadway in Newark.

The top count of the indictment carries a 20-year maximum prison sentence and fines. The charges are merely accusations and the defendants are presumed innocent until proven guilty.

WIC is a federally funded program, administered by the New Jersey Department of Health and Senior Services, that provides low-income women who are pregnant or breast feeding and guardians of children up to age 5 with vouchers to purchase nutritional necessities, including baby formula, milk, orange juice and cereal. The vouchers can be redeemed at any store approved as a WIC vendor for food items specifically listed on the voucher. Once redeemed, the vendor completes the voucher by filling in the cost of the product supplied. The Newark WIC Program is one of 18 WIC programs in New Jersey.

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