Passaic County, New Jersey Couple Charged in Food Stamps Scheme
NEWARK, N.J. – A Passaic County, New Jersey, couple was charged today for their respective roles in a food stamps fraud scheme, U.S. Attorney Craig Carpenito announced.
Ibrahim Zughbi, 64, and his wife, Miriam Zughbi, 59, of Wayne, New Jersey, are charged by complaint with Supplemental Nutrition Assistance Program (SNAP) benefit fraud and conspiracy to commit wire fraud. Ibrahim Zughbi is also charged with money laundering. Both appeared today before U.S. Magistrate Judge Michael Hammer in Newark federal court.
According to documents filed in this case and statements made in court:
From January 2014 to the present, the defendants managed Jamaica Meat Market, a medium-size grocery store in Paterson, New Jersey, that was authorized to accept benefits provided by SNAP, formerly known as the Food Stamp Program. The program is administered by the U.S. Department of Agriculture. Retail food stores approved for participation in SNAP may sell food in exchange for SNAP benefits. They may not exchange SNAP benefits for cash. While the Zughbis ran the store, another individual owns the store and is the person registered with SNAP. According to the complaint, Ibrahim and Miriam Zughbi exchanged more than $4 million in SNAP benefits for cash between 2014 and 2017.
Every SNAP recipient receives an Electronic Benefit Transfer (EBT) card, similar to a debit card, with which to make purchases. Every retailer authorized to accept SNAP benefits has an EBT terminal. Food purchases are made by swiping the card at the terminal. After the customer enters a Personal Identification Number (PIN), the EBT terminal verifies the PIN, determines whether the customer’s account balance is sufficient to cover the proposed transaction and informs the retailer whether the transaction should be authorized or denied. The amount of the purchase is deducted electronically from the SNAP benefits reserved for the customer and the amount is credited to the retailer’s designated bank account. In addition to the high volume of SNAP benefits redemptions for Jamaica Meat Market indicating fraud, law enforcement agents verified the fraudulent exchange of SNAP benefits for cash through the use of a confidential source who, at the direction of law enforcement, engaged in 16 “purchases” at Jamaica Meat Market where one or both defendants exchanged money for SNAP benefits.
Ibrahim Zughbi had previously participated in SNAP when he was the owner of Neighborhood Supermarket, a grocery store that operated out of the same location as the Jamaica Meat Market. In March 2011, the USDA had permanently disqualified Ibrahim Zughbi from SNAP when Zughbi and the Neighborhood Supermarket were administratively charged with SNAP violations. Another individual took over the business, changed its name to Jamaica Meat Market, and certified in writing to the USDA that Ibrahim Zughbi would have nothing to do with the business or its participation in the program. Zughbi continued to run Jamaica Meat Market, and continued to exchange cash for SNAP benefits.
The complaint also charges Ibrahim Zughbi with money laundering. The bank account of Jamaica Meat Market, where the store receives SNAP payments, shows payments in excess of $471,000 to Ibrahim Zughbi and various family members not connected to the business, even though Ibrahim Zughbi is not permitted to associate with Jamaica Meat Market as a participant in SNAP.
Each of the counts with which the defendants are charged carries a maximum penalty of 20 years in prison and a fine of $250,000, or twice the gross pecuniary gain/loss. The count of money laundering with which Ibrahim Zughbi is charged carries a maximum penalty of 20 years in prison and a fine of $500,000 or twice the value of the property involved in the transaction.
U.S. Attorney Carpenito credited special agents of the U.S. Department of Agriculture – Office of Inspector General, under the direction of Special Agent in Charge Bethanne M. Dinkins, and U.S. Immigration and Customs Enforcement (ICE) Homeland Security Investigations (HSI), under the direction of Acting Special Agent in Charge Michael McCarthy, with the investigation leading to today’s charges. He also thanked the Passaic County Prosecutor’s Office, the Wayne Township Police Department and the Paterson Police Department for their roles in the investigation.
The government is represented by Assistant U.S. Attorney Sammi Malek of the U.S. Attorney’s Office Criminal Division in Newark.
The allegations and charges in the complaint are only accusations and the defendants are considered innocent unless and until proven guilty.