Kathleen Lamson and Jorge Martinez admitted buying a pick-up truck and a Honda in 2007 with money from their business food stamp account.
The federal courthouse in Springfield.SPRINGFIELD – Two former convenience store owners on Wednesday pleaded guilty in a $1.1 million food stamps scam, admitting they bought a pick-up truck and a Honda with money they pilfered from the taxpayer-funded antipoverty program.
Kathleen Lamson, 57, of Enfield, Conn., and Jorge Martinez, 41, of Springfield, onetime owners of L&M Market in Holyoke, pleaded guilty in federal court to conspiracy, food stamp fraud, money-laundering and wire fraud.
Prosecutors say the three-year scheme amounted to the storekeepers allowing customers to exchange food stamps benefits for cash, and skimming portions of the illegal transaction into their business bank account. The couple then frequently wrote checks or drew cash off that account between 2007 and 2008 – many just under the $10,000 withdrawal amount that trips mandatory reporting to the IRS.
The food stamps program allows low-income beneficiaries to purchase certain types of groceries. In Massachusetts, recipients receive “EBT” cards that function essentially as debit cards, which are replenished up to a certain amount each month. Cash withdrawals from the card are prohibited.
David P. Hoose, a lawyer for Martinez, said the charges against the two far overstate the actual profits they made.
“The numbers make it sound like it was this big-profit thing,” Hoose said outside court. “There’s a lot of pressure from neighborhoods to do this sort of thing, and they were not prepared for it.
Hoose said Lamson and Martinez were former longtime employees at a greeting card company and took early retirement and their life savings to open the little bodega on High Street, which sold diapers, food, cigarettes and drinks.
“Jorge works a job, lives with his parents, has a seven-year-old car and that’s all he has in the world,” Hoose said.
However, the government contends he purchased the car with money he pilfered from the food stamps program. The charges state that in 2007, Martinez paid $12,500 from the business food stamps account toward a down payment on a Dodge Dakota and grabbed $11,000 from the account to buy a Honda.
Lamson and Martinez face up to five and six years in prison, respectively.
The two are scheduled for sentencing in U.S. District Court on Oct. 18.
Indictment: United States of America v. Kathleen Lamson and Jorge Martinez