SalemNews.com, Salem, MA

December 24, 2013

Store owner to serve 2 years

Fraudulent transactions made with customers' food-stamps cards

BY Julie Manganis Staff writer, STAFF WRITER
The Salem News

---- — SALEM — The owner of two small convenience stores in Salem and Lynn will be sentenced next month to two years in jail by a judge who said yesterday that Peter Jhonny Limat’s breach of the public trust warrants time behind bars.

“The money that pays for food stamps doesn’t come out of thin air,” said Salem Superior Court Judge Howard Whitehead. “It comes out of the pockets of working people, and it goes to people who supposedly cannot afford the necessities of life.”

But many of the customers at Limat’s two stores — Boston Street Market in Salem and J&M Mini Mart in Lynn — weren’t using their Supplemental Nutrition Assistance Program, or “SNAP,” cards to buy food, Limat admitted earlier this month.

Instead, prosecutors said, Limat, 38, of Lynn, would let people use the cards like they were using an ATM and then take half the money for himself. A customer who wanted $50, for example, would let Limat charge $100 to the card, which he would report as food sales. Each of them would get $50 in cash. The Department of Agriculture would then reimburse Limat for the full amount, sending the money directly to his bank account.

In fact, many of the cardholders simply left their cards with Limat, coming by to collect cash when they knew their benefit would be refreshed each month, a prosecutor said.

Over the course of a year, Limat conducted some $800,000 in food stamp transactions, prosecutor Phil Mallard told the judge earlier this month. More than half those transactions — a half-million dollars worth — were for purported food sales of more than $100, something Mallard argued was practically impossible given the limited inventory of both stores.

Mallard and the judge conceded it’s probably impossible to determine how many of those transactions were fraudulent, aside from the $2,100 collected by an undercover agent during an investigation. But Limat was earning enough to generate an income tax bill of $83,000 in 2011, according to a tax return his attorney, Geoffrey Nathan, submitted during yesterday’s sentencing hearing.

Whitehead said the size of that tax bill suggests that Limat, at least in 2011, was earning close to a quarter of a million dollars after deductions for business expenses like rent and payroll.

Last month, Limat’s pastor testified that Limat had been “tithing” $25,000 a year for the past decade.

But Nathan, a privately hired Boston defense attorney, argued that his client and his family are now struggling to get by.

The 2005 BMW that Limat bought needed a new transmission, and every cent Limat earns as a Haitian interpreter now goes to the state Department of Revenue to satisfy a state cigarette tax arrears, Nathan said.

Both Nathan and Limat yesterday placed the blame on customers looking for cash.

“This ‘scam,’ according to a New York Times article, is a fraud committed by the person walking into the store,” Nathan said.

Limat echoed that later in the hearing, telling the judge, “You are not the boss of them, you go by them.” He said his customers claimed they had no time to go to the ATM.

The judge agreed that customers who sought cash in order to purchase banned items like cigarettes, alcohol or even tattoos with their public benefits were partly to blame. But he said Limat facilitated those efforts.

“Why shouldn’t the facilitator of that not be punished?” the judge asked.

Nathan pleaded with the judge for no jail time, telling him that Limat’s family, including an autistic son, would be devastated, his children “forced” into foster care or to live with grandparents in New York because Limat’s wife works full time.

“There is an innocence that would be lost were Mr. Limat to be incarcerated,” Nathan insisted.

But the judge suggested that Limat profited from the crime and needed to pay a price.

“There has to be a deterrent,” Whitehead said. “I do think a sentence of incarceration has to be imposed.” He told Limat he would have to serve two years in jail.

Mallard had asked for three to five years in state prison. The maximum penalty for the crime of electronic benefits fraud is 10 years in prison.

Whitehead agreed to delay sentencing until Jan. 13, on the condition that Limat wear a GPS monitoring bracelet and not leave the state.

He also warned Limat that if he does not show up, the two-year sentence is off the table and he could face up to the maximum prison sentence.

Courts reporter Julie Manganis can be reached at 978-338-2521, via email at jmanganis@salemnews.com or on Twitter @SNJulieManganis.