Dairy Owner Accused of Skimming Millions From Federal Program

The owner of a Los Angeles home-delivery dairy has been arrested and charged with skimming $2.5-million from a federally funded nutrition program for low-income women and children.

Fermin Vasquez, 57, who operates the Pure Milk Dairy in Lincoln Heights, is scheduled to be arraigned Tuesday on felony counts of grand theft, conspiracy to commit grand theft and unlawful trafficking in food stamps, the district attorney’s office announced Friday.

Vasquez, who faces a maximum five years in state prison, allegedly conspired with his firm’s drivers to defraud the Special Supplemental Food Program for Women, Infants and Children (WIC) from 1983 to 1986. Also arrested on theft and forgery charges were two of Vasquez’s drivers, Arturo Galicia-Perez and Francisco Balbuena.

Coupons Provided

Under the WIC program, coupons are provided to qualified women who are pregnant, nursing infants or raising small children who need supplemental nutrition. The coupons are redeemable through authorized vendors for milk, cheese, eggs, baby formula and cereal products.

Vasquez’s drivers would sell women “anything they wanted,” including soda, tortillas and cookies, charged Deputy Dist. Atty. Ardith Javan. In exchange for the coupons, she said, the drivers would provide food or cash worth as much as 25% less than the face value of the coupons.

Vasquez would then redeem the coupons from the government for nearly the full value, Javan added.

“No question there is nickel-and-dime stuff in every government program,” the prosecutor said. “But this is more extensive.”

The charges followed a three-year investigation by the district attorney’s office, in conjunction with the state Department of Health Services and the federal Department of Agriculture.

Truck Drivers Arrested

Last June, 44 Pure Milk Dairy truck drivers were arrested on charges of forgery for having altered WIC vouchers made out to other vendors in order to cash them, Javan said. But when authorities discovered evidence that money was also being skimmed, they conducted an extensive audit and filed charges on only 14 drivers. Most of the cases are in the pretrial stage.

Vasquez, who publicly blamed last year’s alleged abuses on greedy milk truck drivers, was arrested based in part on evidence from informants, Javan said.

Pure Milk Dairy is one of the largest state vendors in the WIC program, according to Jack Metz, chief of the state program. Metz said that $110 million in federally funded coupons will be redeemed in California during the current fiscal year by food vendors participating in the WIC program.