Convenience Store Owner And Manager Sentenced For Running Massive Food Stamp Fraud Scheme
Scheme Caused Nearly $2 Million in Losses to SNAP Program
DALLAS — Two North Texas men have been sentenced for their roles in a massive food stamp fraud scheme that caused nearly $2 million in losses to the Supplemental Nutrition Assistance Program (SNAP), announced U.S. Attorney Sarah R. Saldaña of the Northern District of Texas.
Kamardeen Ogunleye, 52, of Arlington, Texas, was sentenced by Chief U.S. District Judge Sidney A. Fitzwater on Friday to 60 months in federal prison. On Thursday, July 24, 2014, Robert Gordon, 31, of Balch Springs, Texas, was sentenced by Judge Fitzwater to 27 months in federal prison. Each was also ordered to pay approximately $1.9 million in restitution, jointly and severally, to the U.S. Department of Agriculture (USDA), Food and Nutrition Service. Both must surrender to the Bureau of Prisons on September 9, 2014.
In April 2014, both Ogunleye and Gordon pleaded guilty to one count of conspiracy to commit food stamp fraud. Ogunleye also pleaded guilty to one count of wire fraud.
Ogunleye owned and operated KSO Dollar Mart, located in a strip mall at 1918 Martin Luther King Jr. Boulevard in Dallas. Gordon managed the business for Ogunleye. Ogunleye’s and Gordon’s scheme was funneled through this storefront, which offered very few food and beverage items to its customers.
According to plea documents filed in the case, from March 2010 to September 2013, Ogunleye and Gordon devised and executed a scheme to defraud the USDA by using, acquiring, transferring and possessing SNAP benefits. Ogunleye and Gordon conspired to purchase food stamp benefits from actual recipients in exchange for cash and at an approximately 50 percent exchange rate, meaning Ogunleye and Gordon would pay recipients approximately one dollar in exchange for every two dollars’ worth of benefits. Recipients were then free to spend the exchanged-for-cash without the restrictions imposed on SNAP benefits. Both Ogunleye and Gordon knew it was illegal to transfer SNAP benefits in exchange for cash, or for any consideration other than eligible food items.
The full amount of SNAP benefits redeemed in exchange for discounted cash were deposited into Ogunleye’s Omni American Bank and Bank of America accounts held in Arlington, Texas. Between April 9, 2010, and June 17, 2013, SNAP redemptions totaling $2,109,859 were deposited into those two accounts.
Ogunleye, who provided all cash funds that were distributed to customers in exchange for benefits, also collected and retained the bulk of the proceeds obtained from SNAP because of this scheme. For his part as a store clerk, Gordon, who was instructed by Gordon to purchase food stamp benefits in exchange for cash, received a weekly salary from Ogunleye ranging from $300 - $600 throughout the course of his participation in the conspiracy.
The USDA Office of Inspector General investigated the case. Assistant U.S. Attorney P. J. Meitl prosecuted.