Following the Breadcrumbs


Hansel and Gretel left a trail of breadcrumbs on purpose so they could find their way back home after being abandoned in the woods. A convenience store owner in Baltimore left a trail of evidence (not on purpose) that led authorities to his participation in a larger scam involving more than $16 million in stolen Supplemental Nutrition Assistance Program (SNAP) benefits. His portion of fraud accounted for about a quarter of the scam ‘s proceeds.

The man at the center of the case owned and operated four stores in the Baltimore area that accepted SNAP benefits. (As a participating retailer in the Department of Agriculture ‘s food stamp program, the man was well aware of the requirements and regulations of the program, especially the part about not being allowed to exchange Electronic Benefit Transfer (EBT) funds for cash or non-food items.)

This defendant, as well as his co-conspirators, carried out the scam by exchanging the EBT benefits for cash, which violates SNAP rules. According to two different plea agreements, the store owner paid half the value of EBT benefits in cash to food stamp recipients. (Further research revealed that he tried to avoid detection by debiting the cards in multiple transactions over hours or days and sometimes called multiple stores to process the transactions manually.) Over about six years, the store owner and his co-conspirators received more than $3.5 million in payments from the SNAP program for food sales that never happened or were inflated.

The 51-year-old store owner was sentenced to nearly four years in prison plus three years of supervised release. He was also ordered to pay more than $3.7 million in restitution for the illegal trafficking of food stamps. Out of the 14 charged defendants in the overall scam that stole $16 million from SNAP, 10 of those charged are awaiting sentencing.

This fraudster tried to avoid detection, but the government outsmarted him. While SNAP fraud appeared to be big business in Baltimore, the USDA and other investigative partners connected the dots and followed the crumbs of evidence that led to the prosecution and conviction of this group fraud perpetrators.

Source: Today’s “Fraud of the Day” is based on an article entitled, “Baltimore man latest to be sentenced in food stamp trafficking cases,” published by the The Baltimore Sun on May 19, 2017.

A Baltimore man was ordered Friday to pay more than $3.7 million in restitution for illegally trafficking in food stamps.

U.S. District Judge Richard D. Bennett also sentenced Mohammad Shafiq, 51, to almost four years in prison, followed by three years of supervised release.

Read more

Previous articlePulling Fraud Off the Streets
Next articleFaux “the Name. Fraud” the Game.
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.