Brooklyn Man Charged With Facilitating $6 Million Food Stamp Fraud In New York

A criminal complaint was unsealed earlier this week in federal court in the Eastern District of New York charging Fowzi Naji Tareb with misappropriating government permits from the United States Department of Agriculture, Food and Nutrition Service and facilitating more than $6 million in unauthorized food stamp transactions. Tareb was arrested on Tuesday and his initial appearance was held before United States Magistrate Judge Vera Scanlon at the federal courthouse in Brooklyn.

The charges were announced by Loretta E. Lynch, United States Attorney for the Eastern District of New York, and William Squires, Special Agent-in-Charge, Northeastern Region, United States Department of Agriculture, Office of Inspector General.

The federal government, through the United States Department of Agriculture, Food and Nutrition Service (FNS), administers the Supplemental Nutrition Assistance Program (SNAP), formerly known as the Food Stamp Program. SNAP utilizes federal tax dollars to subsidize low-income households, affording such households the opportunity to achieve a more nutritious diet by increasing their food-purchasing power.

In New York, individuals who receive SNAP benefits (recipients) no longer redeem their benefits by using paper food stamp coupons, but rather redeem them electronically through the use of an Electronic Benefits Transfer (EBT) card, which operates much like ATM cards used by banks. The EBT cards may be used by recipients to purchase eligible food items at retail food stores that are authorized by FNS to participate in SNAP and have EBT terminals located in the stores. As a purchase is made, the retailer runs the EBT card through the terminal, and the amount of the purchase is deducted from the recipient’s EBT card. The purchase amount is then electronically credited to the retail food store owner’s bank account.

SNAP benefits may be accepted by authorized retailers only in exchange for eligible food items. Items such as beer, cigarettes, paper goods, and soaps are not eligible for purchase. SNAP benefits may not lawfully be exchanged for cash under any circumstances and may not lawfully be used to pay off credit accounts. SNAP benefits may be accepted only by retailers authorized to participate in SNAP by FNS.

The defendant Tareb allegedly used his position as an agent at Century Payments, a third-party vendor and distributor of EBT terminals, to provide EBT terminals capable of processing SNAP benefits and authorization codes to more than 25 retailers that were not authorized by FNS to accept SNAP benefits. In doing so, the defendant facilitated more than $6 million in unauthorized SNAP transactions. A number of the retail locations, which were searched by law enforcement over the past two days, are also alleged to have been involved in the unlawful exchange of SNAP benefits for cash.

“The government’s food stamp program enables law-abiding retailers to provide food and other essentials to low-income households and receive compensation from the government,” stated United States Attorney Lynch. “The defendant manipulated that program by misappropriating EBT terminals and codes of authorized retailers and giving them to unauthorized retailers -- allowing them to profit by engaging in millions of dollars in under-thetable transactions.” Ms. Lynch also thanked the New York City Police Department for assisting in the investigation.

If convicted, the defendant faces a maximum sentence of 10 years of imprisonment. The charges in the complaint are merely allegations, and the defendant is presumed innocent unless and until proven guilty.

The government’s case is being prosecuted by Assistant United States Attorney Saritha Komatireddy.

The Defendant:

FOWZI NAJI TAREB

Age: 43

Brooklyn, New York

E.D.N.Y. Docket No. 14-M-806