A former Laurinburg restaurant has agreed to pay a portion of $62,000 to settle claims that workers used benefits cards meant for food stamp recipients to buy items for the business.

A federal complaint was filed last October against Ladybug Family Restaurant and four of its workers, including Retha Kendall Lindsey, U.S. Attorney Anne Tompkins said in a statement released by her office on Thursday.

Ladybug operated businesses in Laurinburg and Wadesboro. The restaurant in Scotland County opened in 2011 and ran for about 11 months. The Ladybug was housed in the building previously occupied by Mac’s Breakfast Anytime, Western Sizzlin’ and Quincy’s.

Authorities say is that employees fraudulently used benefits cards to buy bulk packages of meat and other items. The Supplemental Nutrition Assistance Program cards were used at least 49 times between August 2011 and June 2012, according to Tompkins, U.S. Attorney for the Western District of North Carolina.

The purchased items were used at both restaurants, an official said.

Under the deal, the defendants would pay $21,116.01 in damages and $40,883.99 in civil penalties under the federal False Claims Act. The arrangement still must be approved by a federal judge.

The civil action arose out of an investigation by the Inspector General’s Office of the U.S. Department of Agriculture, which administers the SNAP program.

The False Claims Act allows the United States to recover triple the amount paid in fraudulent claims plus civil penalties of $5,000 to $11,000 per false claim. Each time an unauthorized party uses an EBT card constitutes a false claim to the United States subjecting the party to damages and civil penalties.

“The SNAP program is in place to ensure that low income families and individuals are able to buy food staples to combat hunger and prevent malnutrition,” Tompkins said in a news release. “Fraud on this program harms not only every American taxpayer but the vulnerable recipients who need it the most. My office will continue to use the False Claims Act to vigorously investigate and prosecute allegations of fraud on important government programs such as SNAP.”

Lady Bug

Donnell Lindsay opened his second Ladybug restaurant in Laurinburg in October 2011. He closed just shy of year citing the county’s poor economy.

“People just didn’t have any money in Laurinburg,” he said at the time. “Many people looked like they just left from the unemployment office.”

It is unclear if Donnell Lindsay and Retha Kendall Lindsey are related. An official at the US. Attorney’s Office said she was not sure of the relationship.