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Justice News

Department of Justice
U.S. Attorney’s Office
District of Minnesota

Tuesday, May 8, 2012

Owner Of Stryker Avenue Market Sentenced For Food Stamp Fraud

MINNEAPOLIS – Earlier today in federal court, the owner of Stryker Avenue Market in St.
Paul was sentenced for trafficking food stamps. United States District Court Judge Paul A.
Magnuson sentenced Khaffak Sahib Ansari, age 46, of Arden Hills, to 41 months in prison on
one count of food stamp fraud. Ansari was indicted on May 17, 2011, and pleaded guilty on
September 22, 2011. In addition, Ansari was ordered to pay $2.4 million in restitution.

In his plea agreement, Ansari admitted that between January 1, 2006, and October 7, 2010,
he exchanged Supplemental Nutrition and Assistance Program (“SNAP”) stamps, commonly
known as food stamps, for cash and ineligible merchandise. The government believes that Ansari
trafficked more than $3 million in food stamp benefits.

Following today’s sentencing, Joe N. Smith, Special Agent in Charge of the U.S.
Department of Agriculture-Office of Inspector General, said, “When individuals illegally sell
and purchase SNAP benefits for cash, not only do they waste program resources, but they also
erode the public trust in the program. I thank the St. Paul Police Department, the Internal
Revenue Service’s Criminal Investigation Division (“IRS-CID”) and the U.S. Attorney’s Office
for effectively working together to investigate and prosecute individuals whose criminal conduct
diverts vital federal nutrition assistance away from needy families.”

In 1998, the U.S. Department of Agriculture (“USDA”) authorized Stryker Avenue Market
to accept food stamps, and Ansari affirmed that he had attended retailer orientation and
understood the rules regarding the federal food stamp program. Each individual who receives
SNAP benefits is issued an electronic benefit transfer (“EBT”) card, which contains a monthly
allocated benefit amount that can be used at authorized retailers. The USDA then reimburses
those retailers for the benefit amounts redeemed. Only eligible food items may be acquired with
food stamps, and some items, such as alcoholic beverages, tobacco products, and cell phone minutes, are strictly prohibited. Moreover, food stamps may not be redeemed for cash.

The USDA-Office of Inspector General (“USDA-OIG”) began investigating Stryker
Avenue in 2008. On numerous occasions, Ansari admittedly exchanged SNAP benefits for cash
or ineligible items. For example, on July 16, 2008, Ansari swiped a person’s SNAP EBT card for
$401.12 and provided that person with $200 in cash. Then, on January 7, 2010, Ansari swiped
another person’s card for $131.86 and provided that person $100 in cash.

According to a law enforcement affidavit filed in the case, between 2004 and 2009, the
average annual food stamp redemption for a similarly sized store in Minnesota was
approximately $322,793. In contrast, during that same period, Stryker’s annual redemptions
totaled approximately $3.1 million.

According to a 2010 USDA report, when properly functioning, SNAP benefits move into
the local economies quickly. This is important for the families that receive the benefits and the
communities where the benefits are spent because SNAP has an economic multiplier effect.
When SNAP operates as designed, every $5 spent in benefits generates $9 in economic activity.
This benefit is supposed to accrue not only to the eligible families but also to the grocery stores
where the food was purchased, the distributors who delivered the food, and ultimately the
farmers who produced it. According to recent estimates, every $1 of spending on SNAP
increases GDP by as much as $1.79 -- a significant multiplier effect, and an increase of $1 billion
in SNAP spending generates as many as 17,900 total full-time jobs.

This case was the result of an investigation by the USDA-OIG, the St. Paul Police
Department, the IRS-CID, and the Minnesota Financial Crimes Task Force. It was prosecuted by
Assistant U.S. Attorney Kevin S. Ueland.

The Financial Crimes Task Force was established pursuant to state law. It is comprised of
local, state and federal law enforcement investigators, who work to combat the growing trend of
cross-jurisdictional financial crimes. The task force is overseen by an advisory board, also
created under state law.



Updated April 30, 2015