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New Jersey man admits stealing $2.5 million in food stamp benefits

NEWARK, New Jersey (Reuters) - A New Jersey grocery store manager pleaded guilty in federal court on Wednesday to stealing more than $2.5 million from the government in food stamp benefits, federal prosecutors said.

Alexander Vargas, 34, pleaded guilty before U.S. District Judge Joseph Rodriguez in Camden to a scheme in which he overcharged the Supplemental Nutrition and Assistance Program (SNAP) for purchases and split the proceeds with customers, the U.S. Attorney's Office for the District of New Jersey said.

SNAP, also known as food stamps, works by allowing recipients to purchase food with an electronic benefits transfer card, similar to a debit card.

Using a cooperating witness and an undercover law enforcement officer, investigators found Vargas swapped almost $1,360 in benefits for $650 in cash during a series of five transactions in 2012.

In all he was believed to have pocketed more than $2.5 million, prosecutors said.

Vargas faces up to 10 years in prison and a $250,000 fine. He also agreed to forfeit $22,273 found on him when he was arrested in May 2013 and agreed to forfeit another $2.98 million under a money judgment. He has been in custody since, and is scheduled for sentencing February 5, 2014.

His lawyer Jeffrey Zucker, was not immediately available for comment.

(Reporting by David Jones; Editing by Daniel Trotta and Eric Walsh)

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