Dozens arrested in Klamath food stamp fraud

At a news conference, Klamath County sheriff’s Detective Eric Shepherd explained how the phony transactions worked: The store would give the cardholder cash, and the cardholder would let the store swipe their card for a greater amount and keep the money.

KLAMATH FALLS, Ore. (AP) — Authorities have shut down a Klamath Falls meat market they say was the center of food stamp fraud that brought in up to $20,000 a month.

Three primary suspects, including the two store owners, were arrested Thursday, along with 27 other people, the Klamath Falls Herald and News reported.

Warrants were out for 32 more.

At a news conference, sheriff’s Detective Eric Shepherd explained how the phony transactions worked: The store would give the cardholder cash, and the cardholder would let the store swipe their card for a greater amount and keep the money.

Usually, Shepherd said, the payments to cardholders were in cash, but sometimes in methamphetamine or alcohol.

The Carniceria Mi Pueblo market was investigated on a tip from a suspect in a meth investigation last year that resulted in 47 indictments, Shepherd said.

State and local investigators sent 300 officers out before dawn in May 2013 to round up suspects in what they said was a drug operation with ties to Mexican cartels.

In the investigation of the Klamath store, the U.S. Agriculture Department, which oversees food stamps, provided special benefit cards for use in undercover transactions, Shepherd said. The benefit cards are called Oregon Trail Cards.

The investigators named three people as leaders of the fraud scheme and said they had been booked on theft conspiracy and other charges: Severo Toro-Castellon, 52, and Rafael Ortega-Vargas, 45, the owners of the market, and Jose Morena Hernandez, 33.

It could not be immediately determined if they had lawyers yet.

District Attorney Rob Patridge said the building will be seized, and his investigators will interview the other suspects to determine what charges might be brought in the use of the cards.

“We have to have a balance, and we want to be compassionate with what we’re doing, but we want to stop what’s going on here, and that’s what’s critical,” he said. “We need to send a message to the community that this has got to stop.”



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