14 Arrested In Raids Related to $16 Million Food Stamp Fraud

BALTIMORE (WJZ) — More than a dozen retail store operators in and around Baltimore have been charged in connection to a huge food stamp and wire fraud scheme.

The indictments allege the retailers received more than $16 million in federal payments for transactions in which they did not provide any food, a fraud scheme commonly known as “food stamp trafficking.”

Retailers must apply to and be approved by the USDA’s Food and Nutrition Service to participate in Supplemental Nutrition Assistance Program (SNAP), formerly known as the Food Stamp Program, which helps low income families afford nutritious foods.

In Maryland, the program provides eligible individuals with an electronic benefit transfer (EBT) card, which operates like a debit card. Authorized retailers use a terminal that checks the card information and deducts the cash value of the purchase from the SNAP balance.

SNAP reimbursements are paid to retailers through electronic funds transfers. Retailers bill the government in return for providing approved food items to customers.

The indictments allege that the defendants illegally exchanged EBT benefits for cash, instead. To avoid detection, they debited the funds from the card in multiple transactions over a period of hours or days, or called a different store where the transaction was processed manually, the Department of Justice says.

As a result these transactions, they allegedly obtained more than $16,482,270 in EBT deposits for transactions in which food sales never occurred or were substantially inflated and split the proceeds with food stamp recipients.

“The food stamp program is intended 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. “Honest storeowners work hard to earn a profit by actually selling food, and food producers and distributors also benefit. People who play by the rules deserve to know that criminals who defraud them will be held accountable.”

The defendants face a maximum sentence of 20 years in prison for each count of wire fraud; a maximum of five years in prison for conspiracy to commit food stamp fraud and wire fraud; and a maximum of five years in prison for food stamp fraud.

The defendants and their stores are:

  • Walayat Khan, 36, of Reisterstown
  • Barbara Ann Duke, 50, of Owings Mills

Maria’s Market Place, 307 S. Broadway in Baltimore and Royals Food Market, 921 E. Patapsco Avenue in Brooklyn. From October 2013 to June 2016, Khan and Duke allegedly obtained more than $1,486,118 in payments for food sales that never occurred.

  • Shaheen Tasewar Hussain, 60, of Ellicott City

Shop & Save, 301 Crain Highway South, Suite D, Glen Burnie. From July 2014 through October 2015, Hussain allegedly obtained more than $778,183 in payments for food sales that never occurred.

  • Kelym Novas Perez, 34, of Baltimore
  • Jose Remedio Gonzalez Reyes, 50, of Baltimore

Kelym Grocery, 2734 Pennsylvania Avenue in Baltimore. From August 2013 through March 2016, Perez and her husband, Gonzalez Reyes, allegedly obtained more than $879,500 in payments for food sales that never occurred.

  • Mulazam Hussain, 54, of Windsor Mill

Monroe Food Mart and Y&J Grocery in Baltimore. From March 2013 through July 2016 Hussain allegedly obtained more than $1,242,745 in payments for food sales that never occurred.

  • Mahmood Hussain Shah, 57, of Catonsville
  • Muhammad Rafiq, 58, of Reisterstown

Corner Groceries, 1242 Darley Avenue in Baltimore. From October 2010 through August 2016, Shah and Rafiq allegedly obtained more than $1,610,556 in payments for food sales that never occurred.

  • Mohammad Shafiq, 50, of Gwynn Oak, Maryland; and his daughter,
  • Alia Shaheen, 24, of Baltimore

Quick Stop Convenience Store, 237 N. Patterson Park Avenue; New York Food Mart, 1201 N. Patterson Park Avenue; and Barclay Food Mart, 2454 Barclay Street, all in Baltimore; and Shafiq Corporation, 6929 Holabird Avenue, in Dundalk, Maryland. From about October 2010 through July 2016, Mohammad Shafiq and his daughter, Alia Shaheen, allegedly obtained more than $3,712,353 in payments for food sales that never occurred or were substantially inflated.

  • Mohammad Irfan, 59, of Nottingham
  • Muhammad Sarmad, 40, of Nottingham

New Sherwood Market, 6324 Sherwood Road in Northwood, Maryland; Martin Mart, 1504 Martin Boulevard in Middle River, Maryland; Rosedale Mart, 6326 Kenwood Avenue in Rosedale, Maryland; and M&A Mart 7400-A Belair Road in Baltimore. From October 2010 through August 2016, Irfan and Sarmad allegedly obtained more than $3,550,662 in payments for food sales that never occurred.

  • Rizwan Pervez, 38, of Essex

M&N Mini Mart, 1846 W. North Avenue; and Mega Mart1, 1522 Ellamont Street, both in Baltimore. From April 2014 through July 2016, Pervez, allegedly obtained more than $1,689,511 in payments for food sales that never occurred.

  • Kassem Mohammad Hafeed, a/k/a Kassam Mohammad Hafeed, 51, of Baltimore

C&C Market, 4752 Park Heights Avenue in Baltimore. From November 2010 through April 2013, Hafeed allegedly obtained more than $1,532,642 in payments for food sales that never occurred.

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More from Meghan McCorkell
Comments

One Comment

  1. Deborah Kleinmann says:

    You erroneously reported that the New Sherwood Market is in Northwood, MD (print story above) and also in Northeast Baltimore (television broadcast). Neither of those locations is correct.

    New Sherwood Market is located in Baltimore County in a neighborhood known as Idlewylde. Idlewylde is a Baltimore County neighborhood in the same zipcode (21239) as the city neighborhood known as Northwood.

  2. terry says:

    everyone of them are towelheads

  3. craygor says:

    C&C Market at 4752 Park Heights Avenue was the same store that was also involved in the last Food Stamp fraud case back in 21013, but was owned and operated by Jung Kim. It appears 3 years ago it was a south Korean ring that was committing the fraud.

  4. Gerald Faris says:

    Not to worry; as of this date, Obama is admitting 10,000 more “refugees” from Syria to replace them.
    The names of the players change, but the game remains the same.
    It’s an “Arabian Nights”-mare!

    1. Zika Joe says:

      and obammmy be freeing all the coke dealers so he got the hookup once out of office

  5. WMF says:

    No mention of prosecution the SNAP recipients?? Clearly the SNAP participants in this scam don’t need or want the food. It should be relatively easy to identify and prosecute the top 100 offenders?? Pictures in the paper, suspension of future SNAP benefits and 6 months incarceration! As a tax payer that would be justice.

  6. Zika Joe says:

    Make sure to round up all the burr heads that profited too with their gub’ment assistance, lazy gorilliaz

  7. Joe says:

    This may a great time to do a trial run of Sharia Law… Cut the hands off these thiefs if found guilty.

  8. J says:

    What about the other half of the people? The ones that had the SNAP cards and pocketed the money? Only going after the business owners?

  9. Will4567 says:

    Lock ’em up. They likely exchanged the cards for cash to buy drugs. Need to prosecute the individuals also – or at least cancel them from the program.

  10. Argent Furor says:

    Mudslimes dotheads and africanus criminalus no real surprise.

  11. Toothpick says:

    Send them and their families back to where they came from, never to be allowed to return to the USA. Then subtract the entire amount stolen from us from the billions we sent to their home country.

    1. Mr Hanky says:

      send them back minus one hand for stealing

  12. unnamed source says:

    Gosh. All but one of them are immigrants. Who would have thought that someone lucky enough to be allowed into our country (or not) would defraud the honest taxpaying public? (winking at you)

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