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WASHINGTON (Reuters) - Federal investigators uncovered two grocery store owners who trafficked in more than $1 million in food stamps apiece and seized four luxury cars, including a Ferrari, from one of them, the Agriculture Department's watchdog agency said on Wednesday.

In Lake Charles, Louisiana, the owner of two grocery stores was ordered to pay more than $1.7 million in restitution and was sentenced to five-and-a-half years in prison after trading food stamps for cash and other goods, the department's inspector general said in a report.

Investigators seized a Ferrari, Porsche, BMW and Mercedes-Benz, and two bank accounts in the case, the report said.

The food stamp program, formally named the Supplemental Nutrition Assistance Program, helps poor people buy food.

In Waco, Texas, a federal judge ordered a grocery owner to pay $1.3 million in restitution for swapping food stamps for cash, alcohol and tobacco. The owner was sentenced to 33 months in prison.

Some of the cash generated by the trafficking was spent on playing video poker machines in the store, the inspector general said.

The Agriculture Department has come under criticism by Republicans in Congress for not doing more to crack down on fraud. The program is up for renewal by Congress this year and faces complaints that its $76 billion cost is too high.

A proposal in the Republican-led U.S. House of Representatives would cut enrollment by 5 percent as part of sweeping budget cuts.

The Agriculture Department said trafficking has been reduced to 1 percent of the program's cost, down from 4 percent 15 years ago. The department permanently disqualified 1,382 stores this year for food stamp trafficking and sanctioned 772 stores for violations.

(Reporting By Charles Abbott; Editing by Vicki Allen)

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