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VOL. 129 | NO. 250 | Wednesday, December 24, 2014

Five Indicted of Fraud in Benefits Case

By Bill Dries

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A year after federal agents boxed up records and other items at several day cares and grocery stores in an investigation of fraud in federal nutrition and child care benefits, a federal grand jury has indicted five people for the fraud totaled at millions of dollars in public money.

Federal prosecutors allege millions of dollars in federal and state child care and food subsidies were stolen over a two-year period by day care centers owned by Ray and Remark Chism. The charges were made in two sets of indictments returned earlier this month.

(Daily News File/Andrew Breig)

And U.S. Attorney Ed Stanton says the investigation continues with the possibility of more charges in schemes that currently include plenty of references to unnamed and unindicted coconspirators.

Stanton said, in a written statement, the defendants “systematically and brazenly obtained government funds intended to benefit children and poor and low income families – all to enrich themselves.”

“They will now have to answer for their alleged conduct and face severe consequences in a court of law,” he added.

The two sets of indictments were returned Dec. 11 by a Memphis federal grand jury. And the charges involve millions of dollars in government funds as paid through the Supplemental Nutrition Assistance Program – or SNAP – and the Child Car Certificate Program.

Ray Chism III and Renita Little are charged in an 18-count indictment with defrauding both government programs.

Chism, who owns Chism Express convenience store, would allegedly buy SNAP cards and the PIN numbers from those who received the government assistance. He allegedly bought them for cash at less than face value.

Through a family business, Maxi Foods, Chism would redeem the cards and their benefits for cash.

The indictment lists numerous instances over a two-year period starting in late 2011. Those instances involve cards worth between $400 and $800 each with Chism allegedly buying them for approximately $200 less than that value.

The alleged fraud counts involving state-subsidized child care and a federally-funded program that feeds children receiving such care at Helping Hands Enrichment Center, a day care center run by Little. Chism also secretly owned Helping Hands, according to the charges.

Chism allegedly paid parents who already had the day care certificate and then showed their children as enrolled and fed at Helping Hands when they weren’t going to the center. He also allegedly found parents who qualified for the benefits and showed them as working for one of the family benefits in order to get their certificates and the money that flowed from the day care program as well as the nutrition program when their children also were not attending Helping Hands.

Chism and Little are accused of manufacturing phony documents for the day care and food to show Helping Hands was complying with state and federal regulations.

The indictment estimates the day care scheme brought in $676,000 over a two-year period. It puts the “aggregate of the proceeds” from all of the alleged fraud at $1.9 million over two years.

In the other indictment, Remark Chism, Angelica Austin and Eric Pitchford are charged in 25 counts with using the some methods and funneling SNAP benefits also through Maxi Foods as well as day care benefits through K.A.R.E. 3 Enrichment Center, a day care center owned by Remark Chism.

In the instances included in the indictment, Remark Chism and Austin paid amounts closer to the value of the SNAP cards in most cases.

The charges tally the amount of day care subsidies involved at $986,000 across two years and $1.9 million in SNAP food benefits.

Ray and Remark Chism are free on bond on the federal charges. Austin, Pitchford and Little are released on their own recognizance on the federal charges.

Ray Chism III, whose case has been assigned to U.S. District Judge John Fowlkes, faces up to 95 years in prison if convicted. Remark Chism, whose case has been assigned to U.S. District Judge Samuel “Hardy” Mays, faces up to 135 years in prison.

PROPERTY SALES 36 154 6,546
MORTGAGES 34 94 4,129
BUILDING PERMITS 201 554 15,915
BANKRUPTCIES 43 126 3,396