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SALT LAKE CITY — The federal government is petitioning to seize $191,550 from the Utah-based Fundamentalist LDS Church that investigators say was fraudulently acquired through a food stamp scheme.
In a forfeiture complaint filed in U.S. District Court Tuesday, the government is seeking to reclaim money from five FLDS-owned businesses it says fraudulently profited from the Supplemental Nutrition Assistance Program.
Eleven FLDS leaders and members — including Lyle Steed Jeffs, believed to be leading the church's Utah and Arizona communities for his incarcerated brother, Warren Jeffs — have been named in a two-count indictment of conspiracy to commit SNAP benefits fraud and conspiracy to commit money laundering.
Prosecutors have alleged millions of dollars were taken in the scheme, saying FLDS members' food stamp proceeds were diverted to leaders of the church to use as they saw fit. Investigators also say the people were instructed to swipe their SNAP cards as if making purchases in church-owned businesses but left empty-handed.
In one example cited in the complaint, an FLDS member processed a SNAP transaction in October 2015 totalling $800 at the church-owned Meadowayne Dairy but did not receive any food. In another example from November 2015, a church member purchased $511 worth of food from the dairy with SNAP funds, then donated the items to the FLDS Bishops Storehouse.
Members adhering to the church's "United Order" were instructed to collectively contribute and equally share all of their material possessions, prosecutors say. Members of the United Order were told to only receive food and household commodities through the storehouse and businesses that operate as extensions to it, according to the complaint.
The five businesses from the Hildale, Utah, and Colorado City, Arizona, area known as "Short Creek" that have been named in the forfeiture complaint are Meadowayne Dairy Store, Vermillion Cliffs Produce, Quality Wholesale Distributors, Prime Wholesale Supply and Products Unlimited.
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Innuendo. Speculation. Salacious representation. Accounts from unconfirmed or biased sources. Stale information. That's how an attorney for Lyle Steed Jeffs described the arguments by federal prosecutors to keep the bishop of the Utah-based Fundamentalist LDS Church behind bars as he faces charges of an alleged food stamp scheme in the secretive community.Investigators claim that Meadowayne Dairy and Vermillion Cliffs Produce, both the size of small convenience stores, "engaged in abnormally large and frequent SNAP transactions, which rival and even surpass those sales generated by much larger stores like Wal-Mart and Costco."
The complaint notes that not all SNAP transactions in the Short Creek community have been linked to the suspected fraud.
Federal judges have ordered three defendants named in the case, including Lyle Jeffs, to be kept in custody to await trial. Seven others have been released under conditions including GPS monitoring.
A detention hearing is scheduled Thursday for John Clifton Wayman, 56, a former bishop in the border communities.
A status conference for all of the defendants is scheduled for March 22 in St. George.
