Retailer Sentenced For Food Stamp Fraud
Obtained $834,996 in Payments for Food Sales That Never Occurred
Baltimore, Maryland – U.S. District Judge J. Frederick Motz sentenced Kim Man Chu, age 39, of Baltimore, to 18 months in prison followed by three years of supervised release for wire fraud in connection with a scheme to illegally redeem food stamp benefits in exchange for cash. Judge Motz also previously entered an order that Chu forfeit $834,996 and six firearms along with ammunition.
The sentence was announced by United States Attorney for the District of Maryland Rod J. Rosenstein; Special Agent in Charge William G. Squires, Jr. of the U.S. Department of Agriculture’s Office of Inspector General, Northeast Region; and Special Agent in Charge Stephen E. Vogt of the Federal Bureau of Investigation.
Chu owned and operated Long Hing, a convenience store located at 1131 Greenmount Avenue in Baltimore. According to his plea agreement, the store participated in the Supplemental Nutrition Assistance Program (SNAP), previously known as the Food Stamp Program. In Maryland, the program provides eligible individuals with an electronic benefit transfer (EBT) card called the Independence Card, which operates like a debit card. Recipients obtain EBT cards through the state Department of Human Resources, then use the EBT card to purchase approved food items from participating retailers.
Chu knew that it was a violation of SNAP regulations to trade cash for SNAP benefits. Nevertheless, from October 2010 to September 2013, Chu exchanged SNAP benefits for cash at less than face value of the EBT benefits, in violation of the food stamp program rules, and kept up to 50 percent of the benefits for himself. Chu obtained $834,996 in payments for food sales that never occurred.
In separate cases, the 10 convenience store owners or operators indicted in September 2013 in connection with schemes to illegally redeem food stamp benefits in exchange for cash have pleaded guilty to food stamp fraud and/or wire fraud. Abdullah Aljaradi, age 52, and Ahmed Ayedh Al-Jabrati, age 56, both citizens of Yemen residing in Baltimore, were each sentenced to two years in prison, and ordered to pay restitution of $1.2 million. Jung Kim, age 52, of Ellicott City, Maryland, was sentenced to 20 months in prison, and ordered to forfeit $95,453.50 and pay restitution of $205,000. Amara Cisse, age 51, of Windsor Mill, Maryland, was sentenced to 27 months in prison and ordered to pay restitution of $654,349.24, and his wife, Fanta Keita was sentenced to two months in prison. John Cunningham, age 55, of Baltimore, was sentenced to two years in prison. Retailer Hyung Cho, age 40, was sentenced to 38 months in prison, and his mother Dae Cho, age 67, was sentenced to 18 months in prison. The Chos were also ordered to forfeit $371,439.21 and pay restitution of $1.4 million. Abdo Mohamed Nagi, age 54, a citizen of Yemen residing in Baltimore, is scheduled to be sentenced on October 10, 2014.
Two more retailers, Abdulmalik Abdulla, age 37, and Ahmed Mohssen, age 54, both of Baltimore, were indicted in January 2014. A federal jury convicted them on August 8, 2014, following a four day trial, of food stamp fraud and wire fraud. They are scheduled to be sentenced on November 14, 2014.
United States Attorney Rod J. Rosenstein praised USDA’s Office of Inspector General and FBI for their work in the investigation. U.S. Attorney Rosenstein expressed appreciation to Secretary Ted Dallas and the Maryland Department of Human Resources, as well as U.S. Citizenship and Immigration Services - Office of Fraud Detection and National Security for their assistance in the investigation. Mr. Rosenstein thanked Assistant United States Attorney Kathleen O. Gavin, who prosecuted the case.