By Christine McCarthy
WACO- The owner of the East Waco pizza and convenience store busted last July for illegal gambling and a food stamp abuse scheme that later publicly unraveled pleaded guilty in United States District Court on Thursday.
Phillip Ferguson Haynes, Jr., owner of Swift P's Pizza, admitted to devising and carrying out a scheme to allow customers to swipe their Lone Star Cards and receive cash back to gamble and to buy gasoline, cigarettes and alcohol.
Federal court documents read aloud to Haynes on Thursday afternoon charged him with wire fraud and unauthorized use of benefits for instructing employees to let the customers swipe their cards and receive half the dollar value in cash. Haynes and employees then reportedly allowed the customers to use illegal video poker machines and make ineligible purchases with the money. According to the court papers, the damages totaled $1,474,428, from Nov. 1, 2009, to June 28, 2011, while Haynes only reported $218,178 to the State of Texas Comptroller of Public Accounts.
Haynes disputed the exact numbers and his role in allegedly directing all of the illegal transactions, but proceeded to enter his guilty plea.
To cover up his scheme, Haynes instructed his employees to write up bogus invoices for "meat packs," or packages of meat in bulk. He also told the customers to lie and report meat purchases, if ever asked by the state, and Haynes himself showed investigators in 2010 a bogus receipt book with recorded meat purchases that had never been made.
The court documents cite an example of the abuse on Apr. 14, 2011, when Haynes allowed a customer to swipe a Lone Star Card for $400, then went to the back of the store to get $200, which he handed to the customer.
Haynes also created and submitted false sales reports for sales tax benefits.
Judge Walter Smith accepted Haynes' plea and ordered a pre-sentence report from the probation office before Haynes' sentence on August 22.
Haynes faces a maximum of 40 years in prison with the possibility of restitution.
