Caught Red Handed…Twice


Did you ever watch cartoons growing up? For those of you who have (and maybe still do), I’m sure you remember the animated facial gestures the cartoon characters made when they were caught ”red-handed” doing something they shouldn’t have been doing. Their heads would grow twice in size, their eyes would pop out from their heads and their hearts would beat like drums from their chest. They’d put on that ”uh-oh” face when they realized they had been busted, likely followed by a sly smile or exaggerated frown. Do you ever wonder what type of look a fraudster has on his/her face after getting caught? Do their eyes get big? Do they have that infamous ”uh-oh” expression? Today’s Fraud of the Day from the Post-Tribune reports that an Illinois man was caught twice for a similar crime. Maybe he made that ”uh-oh” face a little more seriously the second time around.

Gary, Ill., was hit by a repeat fraudster, dipping his hands in the food stamp pool throughout the state. (If he were a cartoon, I’d imagine a drawing of him plastered in large food stamps.) Court records indicated that the man was previously barred from the food stamp program in 2005 based on prior charges of illegally purchasing food stamps for pennies on the dollar at his own Chicago-based grocery store and reimbursing them for cash. (If you fail in one city or town, move to another.)

Maybe the authorities thought punishment would teach him a lesson. Unfortunately, the man took the opportunity to move a fraudulent business to another town, opening a new store in Gary, specializing in similar fraud. Although he was ineligible for food stamps, he used his resources to help provide his needs – his son. (Yes, exploit your children to help you commit food stamp fraud.)

Cutting corners became easy for the father-son duo as they bilked nearly $1.4 million from the federal government. As soon as the Department of Agriculture accepted the son’s application for food stamps, the father added his name to a connected bank account that would receive the aid. (Just wait until they look the other way, and then proceed to steal.)He then encouraged employees to buy food stamps at the store, and wait until his arrival to pay in cash. Although this scheme was technically connected to the son, court files indicated that ”[the father] was the heart and soul of the fraud scheme in this case.’? Investigations found that food stamps made up nearly 92% of the store’s business, with 77% of the food stamps purchased illegally.

While the fraudster was not convicted in his scam in Chicago, the court recommended that he serve 41 months in prison, noting that barring him from the program the first time was not punishment enough. To date, the fraudster has agreed to pay full restitution, already providing the government with $855,000 in cash and $140,000 in jewelry.

In real life, I don’t see the eyes popping out of a fraudster as they receive a sentencing for their wrong doing. However, for entertainment’s sake, I can absolutely see this man’s eyes popping out upon viewing the amount of total restitution he must pay, followed by a scene of him shedding large tears as he hands over jewelry tarnished with old food stamps.

Source: Today’s ”Fraud of the Day” is based on an article titled, ”Crown Point Man Faces Prison Time for $1.4M Food Stamp Fraud Scheme in Gary,” written by Teresa Auch Schultz and published by the Post-Tribune on November 21, 2012.

A Gary businessman who has pleaded guilty in a food stamp fraud case worth $1.4 million had already committed a similar scheme in Chicago, according to federal attorneys.

According to a sentencing memorandum filed by the government Wednesday in U.S. District Court in Hammond, Adnan Shatat, of Crown Point was barred from the federal food stamp program in 2005 after he was caught buying food stamps at his unnamed Chicago store for pennies on the dollar. He would then submit them for reimbursement of the full value.

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Larry Benson
Larry Benson is currently the Director of Strategic Alliances for Revenue Discovery and Recovery at LexisNexis Risk Solutions. In this role, Benson is responsible for developing partnerships for the tax and revenue and child support enforcement verticals. He focuses on embedded companies that have a need for third-party analytics to enhance their current offerings.