POSTED: Tuesday, November 16, 2010

UPDATED: 6:08 pm EST November 16, 2010

http://www.news4jax.com/money/25817267/detail.html

JACKSONVILLE, Fla. -- A Palatka man was arrested on charges of racketeering, fraud and money laundering after state investigators said he used food stamps to scam the government -- and the taxpayers -- of $257,000 of fraudulent payments.

The Federal Department of Law Enforcement said Craig Fells, 41, misrepresented himself as a seafood retailer to get permission to accept food stamps.

"This goes to the heart of our tax dollars. It also goes to the heart of a very beneficial program," said FDLE Special Agent Dominick Pape. "They're supposed to help people in need buy groceries at the store."

Investigators said Fells then applied for food stamp cards in the name of prison inmates and had them sent to his house. He would use the cards on a terminal in his home and received payments from the government for transactions that never occurred.

When the FDLE got wind of the scheme, they said they sent undercover agents to Fells home, when he would swipe their food stamp cards and give them cash equal to 50 percent of the transaction, pocketing the other half.

Investigators said Fells ran the fraudulent scheme from January 2009 until last month. They said he knew the system since he was a food stamp recipient himself.

"There are a lot of people struggling out there that need this program to get through tough times. But we don't need somebody like this manipulating the system, using it for his personal greed," Pape said.

Prior to this arrest, Fells had seven felony convictions and had served three prison sentences. He could face up to 15 years if convicted on these new charges.

Fells was being held in the Putnam County Jail on $2 million bond.

Investigators said they are still investigating the case and charges may be filed against food stamp recipients who were going to Fells to get cash from their benefit cards.