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Covington business owner sentenced to 66 months

For conspiracy to commit Food Stamp Fraud, Food Stamp Fraud, and four counts of Money Laundering.
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From U.S. Attorney's Office
U.S. Department of Justice, Eastern District of Kentucky

COVINGTON, KY - (Thu 3 Aug 2017) - An Edgewood, KY, woman, who was found guilty by a federal jury in January 2017, was sentenced today to 66 months in prison.

U.S. District Court Judge David L. Bunning sentenced 49-year-old Phyllis Tyler for Conspiracy to Commit Food Stamp Fraud, Food Stamp Fraud, and four counts of Money Laundering.

Tyler operated A&E Fashion's and Beauty Supply LLC (A&E), a convenient store in Covington, Ky., which was an authorized food stamp retailer. The United States Department of Agriculture administers the food stamp program, formally called the Supplemental Nutrition Assistance Program (SNAP), which provides benefits to recipients who are eligible for assistance. Retail stores may participate in SNAP only with the authorization of the USDA, Food and Nutrition Service and may only accept and redeem food stamp benefits in connection with the sale of eligible food stamp items. Authorized retailers cannot accept food stamp benefits in exchange for cash. Food stamp recipients use an Electronic Benefit Transfer (EBT) card that maintains the benefit balance and can be used at any authorized retailer to redeem benefits.

According to the evidence at trial, from January 2, 2012 until June 26, 2015, Tyler made cash purchases of food stamp benefits from beneficiaries, paying half the value of the benefits actually on the EBT cards. She then redeemed the full benefits by conducting EBT transactions at her store, which triggered a direct reimbursement for the sale from the federal government to Tyler's business bank account. She also used cards that she purchased for cash at other retailers, to buy items for her personal use or for inventory at her store. As a result of the fraud, Tyler was responsible for causing a $408,979.76 loss to the food stamp program. On four occasions, Tyler also transferred more than $10,000 in food stamp fraud proceeds through a financial institution, in violation of federal money laundering statutes.

Under federal law, Tyler must serve 85 percent of her prison sentence and will be under supervision of the U.S. Probation Office for three years following her term of incarceration.

Carlton S. Shier, IV, Acting United States Attorney for the Eastern District of Kentucky, Tracey D. Montano, Special Agent in Charge, IRS Criminal Investigation, Nashville Field Office, and Chief Brian Carter of the Covington Police Department, announced the sentence today.

IRS Criminal Investigation, United States Department of Agriculture, Kentucky Cabinet for Health and Family Services and the Covington Police Department conducted the investigation. Assistant U.S. Attorneys Kathryn Anderson and Elaine Leonhard represented the federal government.

This story was posted on 2017-08-04 15:34:32
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