News and Press Releases

Downtown Pittsburgh Convenience Store Owners Defrauded Food Stamp Program

FOR IMMEDIATE RELEASE
April 30, 2014

PITTSBURGH – The owners of a local convenience store pleaded guilty to charges of conspiracy to commit wire fraud and food stamp fraud, United States Attorney David J. Hickton announced today.

Hadi and Wesam Ibrahim, brothers and owners and operators of City News & Arcade on Wood Street, Pittsburgh, Pa., each pleaded guilty to one count of conspiracy before Senior United States District Judge Maurice B. Cohill. The defendants also executed civil settlement agreements for violations of the False Claims Act, and agreed to pay to the United States the sum of $199,605.38.

In connection with the guilty plea, the court was advised that City News & Arcade participated in the United States Department of Agriculture's Supplemental Nutrition Assistance Program, commonly known as the food stamp program. Food stamp recipients could purchase eligible food items using food stamp benefit cards at City News & Arcade. As a condition of participation in the food stamp program, the defendants certified that they would comply with all rules and regulations of the program and were aware that program rules strictly prohibited the exchange of food stamp benefits for cash and/or for ineligible items. Despite this knowledge, on multiple occasions, the defendants exchanged food stamp benefits with customers in exchange for cash on a discounted basis, usually giving the customers only .50 cents on the dollar for their food stamp benefits. The defendants also permitted food stamp customers to purchase ineligible non- food items, such as cigarettes, with food stamp benefits.

Judge Cohill scheduled sentencing for Aug. 14, 2014. The law provides for a total sentence of five years in prison, a fine of $250,000, or both for each defendant. Under the Federal Sentencing Guidelines, the actual sentence imposed is based upon the seriousness of the offense and the prior criminal history, if any, of the defendants.

Pending sentencing, the court released the defendants on bond.

Assistant United States Attorney Tonya Sulia Goodman is prosecuting these cases on behalf of the government. Assistant United States Attorney Colin Callahan is litigating the cases on behalf of the Affirmative Civil Enforcement Section of the United States Attorney's Office.

The Office of the Inspector General for the United States Department of Agriculture and the Department of Homeland Security, Homeland Security Investigations conducted the investigation that led to the prosecution of the Ibrahim brothers.

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