18 Held in Food Stamp Inquiry

Eighteen county residents were arrested and more than $24,000 worth of cash and food stamps was seized by local and federal law enforcement officers in what U.S. Department of Agriculture officials describe as the county’s first-ever large-scale investigation of food stamp fraud.

The two-month investigation, focusing on Santa Ana and Anaheim, zeroed in on so-called “runners,” who buy food stamps at 50% of their value from recipients and then resell the stamps to grocery stores authorized by the USDA to redeem the stamps.

Undercover investigators employing video surveillance also targeted grocery store owners who hired runners to buy the stamps on the street and then purchased the stamps from the runners at 70% of their value--netting a 30% profit because the full cost of the stamps is reimbursed by the federal government.

California residents receive more than $2.7 billion worth of food stamps annually from the federal government, with Orange County residents receiving more than $9 million monthly.

Nationwide, however, taxpayers could be losing up to $3 billion annually in food stamp trafficking, the USDA says.

In Orange County, USDA officials stressed that Tuesday’s arrests represent only a small part of illegal activity that could be costing taxpayers millions.

“We don’t know how expansive this is,” said Roger Viadero, USDA inspector general. “We are on a learning curve. These are significant results for a two-month investigation.”

The investigation was spearheaded by the USDA but included several other federal agencies, the Orange County district attorney’s office, the Santa Ana Police Department and a citizens’ crime-fighting organization, WE-TIP.

The owners of five markets--Cerritos Produce, Sahuago Produce Market, Alva’s Market, La Union Market and Harbor West Groceries--and a clerk at Santa Ana Food Market were arrested in addition to the runners. During the last year, the USDA estimates, more than $800,000 in food-stamp sales was redeemed at the six markets.

Only one person, Santa Ana resident Gladys Rodriguez, 22, has been charged with a felony, of trafficking in more than $2,000 worth of food stamps.