Two Gary, Ind., food marts let people use their food stamps like a normal debit card, giving them cash back and cigarettes in exchange.
In return, they illegally redeemed those food stamps to the federal government for more than $500,000, according to two federal indictments filed Thursday in the U.S. District Court in Hammond.
Now Ola Mohammad, 31, and her brother Abdkdar Mohammad, 29, both of Chicago, face one count of conspiracy to defraud the U.S. government and three counts of wire fraud.
Kaled Mohammad, 27, of Cicero, Ill., faces two counts of wire fraud in a separate but similar case. It was unclear Friday if he is related to Ola and Abdkdar Mohammad.
Court records say Ola Mohammad used her store, Moses Foods, at 1330 Broadway, to allow customers to purchase cigarettes and receive money back through their food stamps.
For instance, on Nov. 22, one customer bought a bag of Cheetos, a 2-liter bottle soda and a pack of cigarettes, and received $40 back in cash, all paid for from a food stamps card. The siblings redeemed the food stamps from the federal government for $4,735,850 through the illegal scheme, according to the indictment.
The money was sent to a bank account that both Ola Mohammad and her father could access, then was wired outside the country.
Although Ola Mohammad is the sole owner of the business, her brother assisted her and works there as a cashier. The indictment claims the scheme lasted from February 2010 to June.
Abdkdar was arrested Thursday and ordered held without bond pending a detention hearing and arraignment set for Monday afternoon. Court records did not show if Ola Mohammad has been arrested.
In a separate case, an indictment claims Kaled Mohammad conducted a similar but smaller scheme at his store, Kay Mart, at 4845 Broadway.
As with Moses Mart, Kaled Mohammad allowed customers to use their food stamp card to purchase cigarettes and receive cash back. The indictment claims he redeemed those food stamps from the federal government for about $60,000.
Kaled Mohammad was also arrested Monday and ordered held without bond pending a detention hearing and arraignment set for Monday afternoon.
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