U.S. Department of Justice
Peter F. Neronha
United States Attorney
District of Rhode Island
May 16, 2012
Convenience Store Owner Pleads Guilty to Defrauding Food Stamp Program of Nearly $650,000
PROVIDENCE, R.I. – Syed T. Shah, 44, of Lincoln, R.I., the former franchisee and owner of a Providence convenience store, pleaded guilty in U.S. District Court in Providence today to defrauding the Supplemental Nutrition Assistance Program (SNAP) of nearly $650,000. Shah pleaded guilty to an Information which charges him with one count of conspiracy to commit food stamp fraud and one count of money laundering.
Shah faces up to 15 years in federal prison followed by up to 3 years of supervised release, and a fine of up to $500,000, when he is sentenced on August 8, 2012, by U.S. District Court Judge John J. McConnell, Jr.
Shah’s guilty plea was announced by United States Attorney Peter F. Neronha; William G. Squires, Special Agent in Charge of the United States Department of Agriculture - Office of Inspector General, Northeast Region; and William P. Offord, Special Agent in Charge of the Boston office of the Internal Revenue Service, Criminal Investigation.
At today’s change-of-plea hearing, Shah admitted to the court that beginning in as early as July 2008, and continuing until December 20, 2010, he allowed recipients of SNAP (food stamp) benefits to redeem their benefits for cash and ineligible items at his Providence convenience store. In return, he charged to their SNAP electronic benefits card a surcharge equal to the amount of cash that was given to the recipient. Shah admitted that he defrauded the food stamp program of approximately $648,000.
Shah admitted to the court that he and an unindicted co-conspirator trained Shah’s employees to exchange cash for SNAP benefits. Shah admitted that he knew that SNAP benefits rules and regulations prohibit trading cash for SNAP benefits and accepting SNAP benefits as payment for ineligible items.
Shah admitted to the court that the food stamp funds he fraudulently obtained were used to pay for his own personal expenses, including the cash purchase of a 2010 Mercedes S550V4 for $76,652.
The case was prosecuted by Assistant U.S. Attorney Sandra R. Hebert.
The matter was investigated by the United States Department of Agriculture - Office of Inspector General, and Internal Revenue Service, Criminal Investigation.