Two Retailers Convicted For Food Stamp Fraud
Defendants Received Over $1 Million from USDA for Food Stamps Traded for Cash
Baltimore, Maryland – A federal jury convicted Abdulmalik Abdulla, age 37, and Ahmed Mohssen, age 54, both of Baltimore, today on charges of food stamp fraud and wire fraud in connection with a scheme to illegally redeem food stamp benefits in exchange for cash.
The convictions were 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 Office of Inspector General, Northeast Region; and Special Agent in Charge Stephen E. Vogt of the Federal Bureau of Investigation.
“Retailers who trade food stamp credits for cash are on notice that federal authorities are on their trail,” said U.S. Attorney Rod J. Rosenstein. “Taxpayers fund the program to provide food for needy recipients, not to turn retail store cash registers into ATM machines.”
The Supplemental Nutrition Assistance Program (SNAP), previously known as the Food Stamp Program, is administered by the Food and Nutrition Service (FNS) of the United States Department of Agriculture (USDA), together with state agencies. The program funds low-income individuals to allow them to obtain a more nutritious diet. 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 use the EBT card to purchase approved food items from participating retailers.
Retailers must apply to and be approved by FNS to participate in the program. Authorized retailers use a point-of-sale terminal that checks the EBT card information and deducts the cash value of the purchase from the customer’s SNAP benefit balance. SNAP reimbursements are paid to retailers through electronic funds transfers. Retailers bill the government in return for providing approved food items. SNAP retailers, including the defendants, receive instruction regarding the requirements and regulations of the food stamp program, such as that only eligible food items can be exchanged for EBT benefits and that a retailer may never exchange EBT benefits for cash or non-food items.
The evidence presented at the four day trial showed that the defendants, who operated Sam’s NY Grocery, a convenience store on North Milton Street in Baltimore, received over $1.5 million in federal payments for transactions in which they did not provide any food, but split the proceeds with food stamp recipients. According to testimony at trial, the defendants exchanged EBT benefits for cash, typically paying half the value of the EBT benefits in cash and keeping the rest for themselves. The testimony at trial also showed that the defendants sold packs of cigarettes to food stamp recipients using their EBT card at twice the value they would normally sell a pack of cigarettes. As a result of the unlawful transactions, the defendants obtained more than $1.5 million in EBT deposits for transactions in which the store did not provide food.
Abdulla and Mohssen face a maximum sentence of 20 years in prison for each of seven counts of wire fraud, and a maximum of five years in prison for each of four counts of food stamp fraud. U.S. District Judge Richard D. Bennett has scheduled sentencing for the defendants on November 14, 2014, at 10:00 a.m.
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, and Kim Man Chu, age 39, of Rosedale, Maryland, pleaded guilty and are scheduled to be sentenced on September 5 and October 10, 2014, respectively, each at 10:00 a.m.
United States Attorney Rod J. Rosenstein praised the USDA 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 Attorneys David I Sharfstein and Leo J. Wise, who are prosecuting the case.