A Philadelphia man today admitted that he stole more than $1.2 million dollars from the U.S. Government through a food stamp scheme, U.S. Attorney Paul J. Fishman announced.
Kaher Abdullah, 57, pleaded guilty before U.S. District Judge Joseph H. Rodriguez in Camden federal court to an information charging him with one count of theft of government funds.
According to documents filed in this case and statements made in court:
In June 2011, Abdullah opened Express Food Mart on South Broadway in Camden, New Jersey.
From November 2011 until about October 2014, Express Food Mart was a small grocery store that was authorized to accept Supplemental Nutrition and Assistance Program (SNAP) benefits (formerly known as food stamps).
The program is administered by the U.S. Department of Agriculture. Retail food stores that have been approved for participation in SNAP may sell food in exchange for food stamp benefits. They may not, however, exchange food stamp benefits for cash.
Every food stamp recipient receives an Electronic Benefits Transfer (EBT) card, similar to a debit card, with which to make purchases. Every retailer authorized to accept food stamp 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. If the transaction is authorized, the amount of the purchase is then deducted electronically from the food stamp benefits reserved for the customer, and the amount is credited to the retailer’s designated bank account.
Abdullah admitted he controlled a business bank account at CitiBank to receive the reimbursements for SNAP benefits. Bank records listed Abdullah as the president of the corporation that owned Express Food Mart. He admitted that from November 2011 until October 2014, the SNAP redemptions were more than $1.2 million.
The volume of SNAP benefits reimbursement received at Express Food Mart substantially exceeded estimates for businesses of similar size, indicating large-scale food stamp fraud.
Law enforcement agents verified the fraudulent exchange of SNAP benefits for cash through the use of undercover law enforcement officers. During a series of transactions, undercover law enforcement agents exchanged SNAP benefits from Abdullah and other employees at Express Food Mart for cash. Abdullah admitted that, in general, he and other employees redeemed SNAP benefits for approximately 50 cents on the dollar.
A review of the bank records showed that Express Food Mart received through its Citibank Business account $1,264,006 for illegally redeemed SNAP benefits. Abdullah admitted that shortly after receiving the money in the Express Food Mart account, he transferred the money to another account which he used to pay personal expenses.
The count of theft of government funds carries a maximum penalty of 10 years in prison and a fine of $250,000, or two times the amount of the loss to the United States, whichever is greater.
Under the terms of the plea agreement, Abduallah has agreed to the entry of a forfeiture money judgment for $1,264,006. Sentencing is scheduled for Sept. 13, 2016.