A federal grand jury in Maryland has indicted nine Baltimore business owners alleging almost $7 million in food stamp fraud.
The scheme, called "food stamp trafficking," involved the store owners redeeming food stamp benefits in exchange for cash and splitting the proceeds with food stamp recipients, authorities say. One store owner, who runs the Second Obama Express in West Baltimore, is accused of obtaining more than $2 million in payments for food sales that never occurred.
"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," U.S. Attorney Rod Rosenstein said in a statement. "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."
A news conference on the indictment was scheduled for Tuesday afternoon.
Authorities say the store owners were abusing the Supplemental Nutrition Assistance Program, also known as SNAP, which is administered by the Department of Agriculture and state agencies. In Maryland, the program provides eligible individuals with cards that work like a debit card that can be used at approved retailers to purchase approved food items.
The indictment alleges that the store owners exchanged food stamp benefits for cash, typically paying half the value of the benefits. To avoid detection, prosecutors say the owners debited the funds from the cards in multiple transactions over a period of hours or days.
Among those charged was Abdullah Aljaradi, 51, who prosecutors say owns the Second Obama Express and D&M; Deli and Grocery, on Harlem Avenue. Prosecutors say he stole $2 million between October 2010 and July 2013.
Dae Cho, 66, and Hyung Cho, 40, of Catonsville, are charged with obtaining more $1.4 million in payments at the K&S; Food Market in the 3900 block of W. Belvedere Ave. Abdo Mohamed Nagi, 54, of Baltimore was charged with obtaining more than $1.2 million in payments at the New York Deli and Grocery in the 1200 block of W. Baltimore St.
Five others were charged with taking $750,000 or less.
Prosecutors say they face a maximum sentence of 20 years in prison for each count of wire fraud, and others face additional charges of food stamp fraud.