MEMPHIS, Tenn. — A former, Memphis day care owner faces up to 15 years in federal prison.
Remark Chism pleaded guilty Wednesday to three counts of a 25 count indictment related to defrauding the government and taxpayers out of millions of dollars.
In November of 2013, several businesses owned by Chism and his family members were raided by federal authorities.
History of Problems for Chism Owned Day Care
Five people were indicted roughly a year later.
WREG was in the courtroom Wednesday during Chism’s hearing.
Our cameras captured video of Chism walking into the building along Front Street, alone.
The 35-year-old spoke nervously, and reached for tissue at one point while Judge Samuel Mays read the indictment aloud.
It was quite a different look from pictures the On Your Side Investigators found on Chism’s Facebook page where he brags about vacations and motorcycles.
Luxury possibly paid for with taxpayer dollars.
U.S. Attorney Edward Stanton, III told WREG, regarding the allegations in the indictment, “It’s a pretty brazen scheme.”
The government accused Chism of paying cash for EBT cards, then redeeming the full amount at the former Maxi Foods/ Save More, the grocery store he ran, owned by his father.
At the day care he owned, KARE Enrichment Center #3, prosecutors said Chism faked attendance records to claim government reimbursement for kids who never attended.
Stanton said, “It’s significant when you look at the funds, almost $3 million total in taxpayer funds that were diverted over a two year period for personal gain, lavish lifestyles.”
Chism pleaded guilty to three counts of the indictment:
- Conspiracy to commit SNAP benefit fraud (Count 1)
- Conspiracy to commit child care benefit fraud (Count 16)
- False statements (Count 18)
As part of the agreement, Chism will also forfeit certain assets he obtained through the violations.
In court, Assistant U.S. Attorney Deb Ireland described how Chism would recruit “runners” to find cards and PINS, and after paying cash to both the runners and recipients, would run the cards through a terminal in his private office at the grocery store.
One example in the indictment described a scenario in which Chism paid $300 in cash to an individual, then obtained $390 worth of SNAP benefits.
The government says at KARE III, Chism falsified attendance records and submitted them to the state for reimbursement through the Child Care Certificate Program.
The indictment explains Chism and his co-defendants would locate eligible parents and fraudulently claim they worked at one of the Chism businesses.
Attorneys say Chism would keep some of the money from the reimbursement, and pay some to the parents who consented to handing over their children’s names.
Chism Family Member Tries to Re-Open Center Closed in Raid
After the hearing ended, Chism agreed to talk with WREG, but his attorney Michael Scholl advised him against it. He said Chism had to finalize information related to the plea at the federal building.
Scholl did the interview instead, and said his client takes full responsibility for his part in what happened.
“Mr. Chism’s extremely sorry for what he’s done, he wants to, like I said, rectify the situation, make it right by the government, make it right by the individuals that were harmed and get this behind him.”
Co-defendant Erica Pitchford also reached a plea deal with the government Wednesday afternoon. She also pleaded guilty to Count One of the indictment, Conspiracy to Commit SNAP Benefit Fraud.
Each of the three counts for which Chism pleaded guilty carries a maximum of five years in prison, $250,000 in fines and one year of supervised released.
Sentencing is set for Thursday, September 24th.
Scholl says he’s hoping sentencing will be set at the lower end of the spectrum.
Ray Chism, III has a trial date of August 10th. Attorneys on both sides of the case have indicated they will likely reach a plea agreement before that time.
