Eleven defendants face criminal charges for allegedly cashing out food benefits cards in schemes totaling more than $4 million, San Francisco District Attorney Brooke Jenkins announced Thursday.
According to the DA’s office, the defendants, who include the owners and employees of five San Francisco businesses, conspired to fraudulently obtain government benefits from the Supplemental Nutrition Assistance Program, formerly known as food stamps.
According to court documents, the defendants acquired Electronic Benefits Transfer cards from program recipients and processed fraudulent transactions at retail outlets. Prosecutors say the defendants split the proceeds 50-50 with the benefit recipients.
“My office is committed to ensuring the integrity of public benefits: that they remain in the hands of recipients and are used for their intended purpose of providing food to needy community members,” Jenkins said in a statement.
Investigators described a common scheme in which “runners” solicited EBT cardholders in downtown and Tenderloin neighborhoods. The runners took the cards to co-conspirators at participating stores, where employees processed transactions of $100 to $300 as if the cardholder were purchasing food items. Instead, the conspirators paid the cardholder half the transaction amount and kept the remainder.
The charges span three cases involving businesses across the city. The largest case involves Changyi Trading, Fu Yuan Food Market, and Da Chang Yuan in Chinatown, with the alleged fraud exceeding $3 million. Guo Quian Lai, Quingyuan He, Xinyi Lei, and Mandy To face charges that include conspiracy, misappropriation of public funds, and grand theft.
When approached, cashiers at Changyi Trading said they could not discuss the allegations. At Fu Yuan Food Market, cashier Jonas Zhen denied the allegations.
A second case involves H&L Super Market in the Tenderloin, with fraud losses exceeding $500,000. Hoang Le, Runcheng He, and Yulian Luo face similar charges. The third case involves Clement Dung Market in the Richmond, also with losses exceeding $500,000. Dung Ngoc Huyhn, Kuo Hon Wong, Conhi Truong, and Hau Dinh Ho face conspiracy and fraud charges.
The metal gates at H&L Super Market at 669 Geary St. were padlocked Thursday. A sign saying “We accept EBT” appeared to have been sprayed over with black paint.
Justin Marks, owner of Low Key Skate Shop a few doors down, said he believed the business had been closed for at least six or seven months.
“It was a shame,” Marks said. “That shop had lots of everything inside.”