SANTA MONICA—An FBI investigation has resulted in the arrest of two men who allegedly cheated Santa Monica-based firm Lionsgate Entertainment out of $2 million.

Roccio James Cuccia, 31, from Downey, and Larry D. Collins, 50, from Northridge, were arrested on Friday, March 23. They were charged in a 14-count indictment that had been returned by a federal grand jury the day before.

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The indictment includes allegations of wire fraud, money laundering, and tax evasion.

According to the indictment, Cuccia, who began working as a senior buyer for Lionsgate in 2006, used Collins as a vendor to supply display cases for the entertainment company’s products in retail stores.

The pair allegedly devised a scheme in which Cuccia used Liongate’s computer system to inflate the number of approved display cases, while Collins generated fraudulent invoices for the inflated purchase orders.

Lionsgate sent payments for the inflated orders to a third party, who wired a substantial portion of the funds to Collins. Collins then wired some of the money to Cuccia’s bank account. The indictment alleges that the scheme cost Lionsgate losses of approximately $2,064,000.

The two men were caught following a multi-agency investigation involving the FBI, IRS Criminal Investigation, and the Santa Monica Police Department.

Santa Monica Police spokesman Sgt. Richard Lewis said that the department took the initial report about the alleged kickback scheme.

“As we began investigating, we realized that there was the potential for substantial dollar loss, so we contacted the FBI,” he said.

“They decided to take the case, so we passed it onto them.”

Sgt. Lewis added that Santa Monica Police assisted with the arrests of Cuccia and Collins on Friday, March 23. He was unable to comment on the circumstances that led to the initial investigation into the two men.

Cuccia and Collins have each been charged with 10 counts of wire fraud. In addition, Cuccia is charged with two counts of conducting a monetary transaction in criminally derived property of a value greater than $10,000 and two counts of subscribing to false tax returns.

Federal agents also confiscated a 2007 Toyota Camry Hybrid and a 2006 Mercedes Benz R350 belonging to Cuccia, which they believe were purchased using some of the funds.

If convicted of all charges, Cuccia faces a maximum sentence of 226 years in federal prison, and Collins faces 200 years in federal prison.

Magnolia Gin, 52, of Seattle, and Son Hoang Le, 35, of Bellevue, who owned two adjacent businesses in the White Center were sentenced this week to prison terms for food stamp fraud.

Gin and Le were arrested in July 2011 as part of an ongoing investigation of food stamp trafficking in Western Washington. Gin was sentenced Monday, March 26, 2012, to18 months in prison and today Le was sentenced to 24 months in prison. Gin owned AsianBubble Tea, and Le owned NW Halal Asian Food Corporation, d/b/a D.P. Northwest Halal & Asian Food Corporation, LLC, on 17th Avenue SW, Seattle. The two conspired to redeem USDA Supplemental Nutrition Assistance Program (SNAP) benefits for cash. The benefits are supposed to be used only for the purchase of food.

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At Le’s sentencing hearing today, Chief U.S. District Judge Marsh J. Pechman told him:

“When you commit a fraud like this, you commit a fraud against every taxpayer, everybody who

works hard to help needy people put food on the table… It is important that other shop owners know and understand that this is wrong and it is not going to be tolerated in our community.”

According to documents in the case, undercover agents took electronic benefits cards into

Asian Bubble Tea on multiple occasions. GIN would ask the card holder how much money they wanted, and asked them to provide their personal identification number. GIN would leave with the card through the back of the restaurant and return with the cash. Records showed that the cards in question were being run at D.P. Northwest Halal. For example, a card would be swiped for $100, with $60 going to the card holder, and the co-conspirators making a $40 profit. In one instance described in the complaint, LE provided cash to an undercover agent using a SNAP benefit card at his store. Bank records indicated that LE made multiple cash withdrawals from the business account that he controlled that received payments under the SNAP program. In

some instances, customers came directly into LE’s store to redeem their cards for cash, without using GIN as a go-between.ecords showed an ever increasing amount of SNAP redemptions at D.P. Northwest Halal, from just over $2,000 in April 2010, to more than $80,000 in May 2011. In just the first three weeks of June 2011, the store had redeemed more than $100,000 in SNAP benefits. A

review of state revenue records revealed that in 2010, D.P. Northwest Halal claimed total sales of

$274,611, but federal records show that DP Halal redeemed over $380,000 in SNAP benefits during that same time frame. In his plea agreement, LE admitted $700,000 in fraud against the food stamp program.

In their sentencing memo, prosecutors noted that LE’s crime helped undermine the program. LE’s “conduct also hurt the program because it has contributed to the public perception that the program is rife with fraud. Indeed, many people have advocated ending or

severely restricting the program, as the public has increasingly begun to associate the program with widespread fraud. This perception of the program hurts the countless unseen people who

use the program for its intended purpose, to put food on the table for the family during hard times,” prosecutors wrote in their sentencing memo.

Those who trafficked their food stamps at the Halal Market are also paying a price.

According to the Washington State Department of Social and Health Services Office of Fraud and Accountability, 69 food stamp recipients who had traded at the market are under review. So

far 20 people have been disqualified from the program with another 31 cases pending disqualification. The disqualifications of 50 recipients will result in a cost savings of more than

$100,000.