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Religious sect leader and 10 others indicted for food stamp fraud, money laundering

RAPID CITY, S.D. -- The leader of secretive religious sect in the Black Hills of southwestern South Dakota has been charged with 10 others for conspiracy to commit food stamp benefit fraud and money laundering.

RAPID CITY, S.D. - The leader of secretive religious sect in the Black Hills of southwestern South Dakota has been charged with 10 others for conspiracy to commit food stamp benefit fraud and money laundering.

Seth Jeffs, 42, who leads the group at the fenced-in, 140-acre compound near Pringle, was arrested Tuesday by the Custer County sheriff and will appear in federal court in South Dakota. Other leaders and members of the Fundamentalist Church of Jesus Christ of Latter-day Saints were also arrested or being pursued by authorities on Tuesday.
The other arrests took place in Hildale, Utah, and Colorado City, Ariz.
The indictment unsealed in Salt Lake City, Utah, alleges the church leaders diverted benefits from the Supplemental Nutrition Assistance Program, what used to be known as food stamps and now known as SNAP, from authorized beneficiaries to leaders of the FLDS Church - possibly in the millions of dollars per year.
U.S. attorney officials said a large percentage of the church members were receiving food stamps.
The church has been in trouble before as former church president Warren Jeffs - a brother to Seth and current top official Lyle Jeffs - is serving a life sentence plus 20 years for two felony counts of child sexual assault of a 12-year-old girl and a 15-year-old girl. The sect is known for practicing polygamy and at times with underage brides. Warren Jeffs’ compound in Texas was shut down after his arrest. The brothers’ father, one of the leaders in the early days of the church, was said to have 60 wives.
“This indictment is not about religion. This indictment is about fraud,” Utah U.S. Attorney
John W. Huber said Tuesday in a news release. “This indictment charges a sophisticated group of individuals operating in the Hildale-Colorado City community who conspired to defraud a program intended to help low-income individuals and families purchase food.”
According to the indictment, the church leaders diverted SNAP food benefits from members to a “storehouse” where food was then distributed sometimes to non-eligible persons..
The church leaders also gave “instructions on how to avoid suspicion and detection by the government,” the indictment said.
Not only did the church leaders divert food to non-eligible persons, but they also used SNAP fraud proceeds for other purposes, the indictment said.
A few of the examples were:

  • In March 2015, using SNAP fraud proceeds, a church leader signed a check for $16,978 to buy paper products.
  • In October, an FLDS member conducted a SNAP transaction for $800 without receiving eligible food products.
  • A church leader on at least one occasion collected cards from legitimate beneficiaries and gave them to another church member who purchased food and goods for non-eligible persons.
  • SNAP fraud proceeds were used to write checks for a 2013 John Deere loader tractor and for a 2012 Ford F-350 pickup for the compounds.

The money laundering count of the indictment alleges the defendants conspired to conceal and disguise the nature, location, source, ownership and control of proceeds of an unlawful activity while conducting or attempting to conduct financial transactions. The conspiracy counts carry a potential penalty of five years in prison, while the money laundering count carries a potential penalty of 20 years.
Also charged in the indictment is Lyle Jeffs, 56, the brother to Warren and Seth, who handles the daily affairs of the organization. He was arrested Tuesday in Salt Lake City and will make his first court appearance Wednesday in federal court in Salt Lake City. Some of those indicted were still being sought. None of the others charged were from South Dakota
It’s unknown how many members of the church are in the South Dakota compound - although some estimates are that there are about 100 sect members, but they are rarely seen and the place is surrounded by an 8-foot tall wooden fence with a guard tower serving as the entrance.
A large number of agencies were involved in the case including from South Dakota the Custer County Sheriff’s Department, the U.S. attorney’s office and the FBI office.
The investigation started out small in Utah’s Washington County with Sheriff Cory Pulsipher and grew to a multiagency effort.

Related Topics: CRIME
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