Ever since Mohammad Khan* was busted for trafficking in food stamps in Hagerstown, MD in 2007 (here he is sent to prison in 2009), I’ve followed this form of food stamp fraud as a ‘hobby.’ I was mostly interested in the fact that the majority of food stamp scammers are immigrant owners or managers of small convenience stores and those ‘mom and pop’ gas stations scattered across America. LOL! In 2008, an Arab publication wondered why there were so many Arab names among the scammers.
Everyday I get alerts to food stamp fraud busts around the country where often the fraudster has pocketed tens of thousands (up to a million) dollars in money gained by purchasing someone’s food stamp benefits for usually fifty cents on the dollar (the merchant is then reimbursed by the taxpayer/federal government for the full dollar).
For years, I have wondered why I was only seeing local papers with these stories. Now, I’m delighted to note that some enterprising reporter (Laura Crimaldi) at the Associated Press has written a larger investigative story.
Reporter Crimaldi now needs to go the next step—figure out how so many immigrants purchase these stores and set up the scam. My guess is something called the E-2 Treaty Investor program—another of those LEGAL immigration programs filled with fraud. Oh, and by the way, some of those Muslim immigrants in this fraud business are sending YOUR money back to the Middle East. (I have many documented stories if anyone is interested, but no time to link them here!).
We even have US immigration attorneys specializing in helping foreigners scout-out and buy stores in the US and then help them get all their visa paperwork completed.
Here are the opening paragraphs of the AP story posted at the Huffington Post featuring scammer Syed Shah from Providence, RI (emphasis mine):
PROVIDENCE, R.I. (AP) — A criminal swindle of the nation’s $64.7 billion food stamp program is playing out at small neighborhood stores around the country, where thousands of retailers are suspected of trading deals with customers, exchanging lesser amounts of cash for their stamps.
Authorities say the stamps are then redeemed as usual by the unscrupulous merchants at face value, netting them huge profits and diverting as much as $330 million in taxpayer funds annually. But the transactions are electronically recorded and federal investigators, wise to the practice, are closely monitoring thousands of convenience stories and mom-and-pop groceries in a push to halt the fraud.
Known as food stamp trafficking, the illegal buying or selling of food stamps is a federal offense that has resulted in 597 convictions nationwide and $197.4 million in fines, restitution and forfeiture orders, over the past three years, according to the U.S. Department of Agriculture’s Office of the Inspector General. The USDA last month awarded a 10-year contract worth up to $25 million to Fairfax, Va.-based SRA International, Inc., to step up the technology used to combat fraud.
“It’s misuse of the program. It’s a misuse of taxpayer dollars at a tough time. Not only the people who need the program are having a tough time, but the people who are paying for the program are having a tough time, too,” said Kevin Concannon, USDA Undersecretary for Food, Nutrition and Consumer Services.
The fraud is almost always found among the 199,000 smaller stores that process 15 percent of the nation’s total food stamp transactions, Concannon said.
In Providence, for example, federal prosecutors in August charged former 7-Eleven franchisee Syed Shah, 43, with conspiracy for letting customers turn in their stamps for lesser amounts of cash and purchase items like soap, over-the-counter medication and laundry detergent that are not allowed under USDA rules, court records show. Federal agents began investigating Shah’s store in July 2008.
Readers, this was not all soap and laundry detergent! Mentioning those items is a diversion from the real and massive financial fraud Shah is alleged to have been perpetrating on US taxpayers.
Investigators said redemptions at Shah’s store skyrocketed from $228,000 in 2008 to nearly $1 million last year and far exceeded that of other 7-Eleven stores.
Read the whole article!
Is food stamp usage rising simply due to our poor economy?
No! says this writer at First Things (Hat tip: Judy). It seems that Congress in 2007 changed the rules making it easier to obtain benefits and thus the sharply rising numbers of food stamp recipients we have today.
* Back in 2007 I did a little searching and found that Khan had incorporated the Nadia Convenience store in downtown Hagerstown from a seedy private address in Dundalk. If I recall he had somewhere around $300,000 to invest in the store. Within a brief couple of years he owned over a million dollars of real estate in Hagerstown before some sharp-eyed citizen directed authorities to the food stamp scam he was running.
I have no idea if Khan (a Pakistani) had any connection to the Pakistani-dominated Mosque in Hagerstown which was the subject of an FBI investigation in 2004, here.