The indictments allege the retailers received almost USD 7 million in federal payments for transactions in which they did not provide any food, a fraud scheme commonly known as "food stamp trafficking."
Stores allegedly split the proceeds with food stamp recipients.
The indictments were returned last week and unsealed on Tuesday. Federal agents arrested the defendants and executed search warrants at the stores and related locations this morning.
The indictments 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.
"Taxpayers fund the food stamp program to put food on the tables of needy recipients, not to put money in the pockets of greedy criminals," said U.S. Attorney Rod J. Rosenstein.
"Food producers and distributors benefit when food stamp funds are used to buy food and honest storeowners work hard to earn a profit by actually selling food. People who play by the rules deserve to know that criminals who defraud them will be held accountable."
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 obtain EBT cards through the state Department of Human Resources and then 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 must bill the government only in return for providing approved food items.
The indictments allege that the defendants exchanged EBT benefits for cash, in violation of the food stamp program rules. The indictments allege that the defendants typically paid half the value of the EBT benefits in cash. To avoid detection, the defendants often debited the funds from the card in multiple transactions over a period of hours or days. As a result of unlawful cash transactions, the defendants obtained more than USD 6,898,000 in EBT deposits for transactions in which the stores did not provide food.
According to the indictments, the defendants listed below owned and/or operated stores in Baltimore that were authorized to accept SNAP.
The defendants received instruction regarding the requirements and regulations of the food stamp program, including that only eligible food items could be exchanged for EBT benefits and that a retailer may never exchange EBT benefits for cash or non-food items.
Abdullah Aljaradi, age 51, of Baltimore: Second Obama Express and D and M Deli and Grocery, 901 Harlem Avenue, Suite A and B, respectively. From October 2010 through July 2013, Aljaradi allegedly obtained more than USD 2 million in payments for food sales that never occurred.
Dae Cho, age 66, and Hyung Cho, age 40, both of Catonsville: K and S Food Market, 3910 W. Belvedere Avenue. From November 2010 through July 2013, Dae Cho and her son Hyung Cho allegedly obtained more than USD 1.4 million in in payments for food sales that never occurred.
Abdo Mohamed Nagi, age 54, of Baltimore: New York Deli and Grocery 1207 West Baltimore Street. From February 2011 through May 2013, Nagi allegedly obtained more than USD 1.2 million in payments for food sales that never occurred.
Kim Man Chu, age 38, of Rosedale, Maryland: Long Hing Grocery Store, 1131 Greenmount Avenue. From October 2010 through July 2013, Chu allegedly obtained more than USD 750,000 in payments for food sales that never occurred.
Amara Cisse, age 50, and Fanta Keita, age 45, both of Windsor Mill, Maryland: Simbo Food Mart, 2103 West Pratt Street. From November 2010 through May 2013, Cisse and his wife Keita allegedly obtained more than USD 600,000 in payments for food sales that never occurred.
Jung Kim, age 51, of Ellicott City, Maryland: C and C Market, 4752 Park Heights Avenue. From November 2010 through April 2013, Kim allegedly obtained more than USD 600,000 in payments for food sales that never occurred.
John Cunningham, age 54, of Baltimore: Cunningham's Amoco, 4419 Park Heights Avenue. From December 2012 through July 2013, Cunningham allegedly obtained more than USD 348,000 in payments for food sales that never occurred.
The defendants all face a maximum sentence of 20 years in prison for each count of wire fraud. Jung Kim, Dae Cho, and Hyung Cho also face a maximum of 20 years in prison for food stamp fraud. Aljaradi, Nagi, Chu, Cisse, Keita, and Cunningham face a maximum of five years in prison for food stamp fraud.
The defendants are expected to have initial appearances later today in U.S. District Court in Baltimore.
An indictment is not a finding of guilt. An individual charged by indictment is presumed innocent unless and until proven guilty at some later criminal proceedings.
--IBNS (Posted on 18-09-2013)