Chinatown
food stamp ring
busted

Nineteen people and
four businesses are indicted
in federal court

By Susan Kreifels
Star-Bulletin

It all started with a 1994 phone call to a government hot line that a woman selling produce in Chinatown was buying food stamps for cash.

In what officials yesterday called a major national food stamp scam, the U.S. attorney announced that 19 people and four businesses were indicted for alleged illegal trafficking of more than $1.2 million in food stamps. They were also accused of money laundering.

Fourteen were arrested and arraigned in federal court yesterday and all pleaded not guilty.

Federal Magistrate Judge Francis Yamashita set bail for all at $25,000 each, except for one defendant, who had three contempt citations. That bail was set at $100,000.

Trial date was set for July 21. Individual defendants face up to 90 years in jail and $2.5 million in fines.

Officials accused the defendants of buying the stamps from recipients, then selling them to businesses authorized to accept food stamps.

The businesses allegedly received reimbursement for the stamps from banks without giving over merchandise in turn. Each defendant allegedly made a cut on the transactions.

Steven S. Alm, U.S. district attorney, called the alleged crimes "despicable" because they involved "people stealing from the poor."

"This is a good program to help children and families who are having trouble making it," Alm said. Alm said records showed the businesses were reimbursed for $1.2 million in food stamps more than their total sale of merchandise.

Tim Danaher, deputy regional inspector general for investigation at the U.S. Department of Agriculture, called the alleged food stamp scam "one of the major ones nationwide."

The four Chinatown businesses listed in the indictment were Kimson's Jewelry Inc.; California Seafoods Inc.; Thanh Lan Market Inc.; and D&M Seafood Inc.

The federal government also accused Hung Thai Meat Market, Truong Phat Grocery, Sunny Meat Market, Sunny Meat Market No. 2, and Kommaly's Market of illegally accepting food stamps.

They were not indicted, but their owners were.

All of the businesses are authorized to accept food stamps except Kimson's Jewelry, which allegedly provided money to buy the stamps from recipients, Alm said.

Up to 80 local and federal officials participated in searches and arrests yesterday, and the investigation is continuing.

Alm said the hot line caller told officials that Huyen Thi Nguyen, who was arraigned yesterday, was buying food stamps from recipients for cash.

The investigation took off after the tip.

The other individual defendants are Carol Lam Tran, Dat (David) Huy Pham, Pete Kiat, Monique Dang, Henry Wong, Bounsy and Manivanh Darasamay, Phouthong Sivongxay, Mai Thi Do, Kommaly Gordon, Kim Mai Moore, Tam Nguyen, Phong (Kim) Thi Hoang, Diem Huynh, Kinh Van Tran aka Lucky Lok, Nguyen (Michael) Tran, Nancy Doan and Dao Thi Nguyen.

Officials called Chinatown the "hotbed" of food-stamp fraud in Hawaii because there are many small businesses there.

They believe the alleged crimes have been occurring since 1990.

All states are required to track food stamp benefits electronically by 2002, and Hawaii hopes to have the system in place by this July, said Allen Ng, regional administrator of the Food and Nutrition Service in the Department of Agriculture's Western Region.

Under the new system, recipients will use bank cards instead of food stamps, and the government will be able to access household accounts. Officials hope this will combat fraud.