Like burqa bank robberies, the rise in food stamp fraud (click for more) coinciding with the growing Muslim population is likely just a coincidence. In this latest case, Hasan Ahmed is a US citizen who apparently doesn’t speak English. That didn’t stop him from running an elaborate scheme to rob taxpayers of more than $5.2 million dollars.
The owner of a Bessemer grocery store was sentenced this week to three years and 10 months in federal prison and was ordered to forfeit $5.2 million to the government for defrauding the food stamp program, structuring cash transactions and laundering money to hide the illegal profit, and evading federal income taxes, federal authorities announced Wednesday.
Hasan F. Ahmed, 50, owner and operator of Associated Discount Foods on Ninth Street South in Bessemer, pleaded guilty in March to one count each of food stamp fraud, tax evasion and structuring currency transactions, and four counts of money laundering.
U.S. District Judge R. David Proctor sentenced Ahmed and ordered the $5.2 million forfeiture at a hearing on Monday, according to a joint statement from U.S. Attorney Joyce White Vance, IRS Criminal Investigation Special Agent in Charge Veronica Hyman-Pillot and U.S. Department of Agriculture Office of Inspector General, Investigations, Special Agent in Charge Karen Citizen-Wilcox.
“For several years, this defendant misused thousands of dollars’ worth of food stamp benefits every day, enriching himself at the expense of American taxpayers and food stamp recipients,” Vance stated. “The SNAP program provides assistance for those who need help to feed their families. We will not allow criminals to corrupt that program so they can feed their own greed.”
Hyman-Pillot stated that Ahmed intentionally abused the SNAP program and lined his pockets with taxpayer funds. “His actions ultimately reduced the amount of benefits available to families in need of nutrition assistance. IRS-CI and our law enforcement partners will continue to work together and investigate similar schemes. We will trace every penny of illicit proceeds and return the funds to the United States Government.”
Ahmed is a U.S. citizen, but had an interpreter who speaks Bengali at his plea hearing in March. He has a plea agreement with the U.S. Attorney’s Office.
Ahmed was not among the 17 people arrested in the Birmingham area in a sweep last year by law enforcement that was the biggest food stamp fraud investigation in Jefferson County’s history.
According to Ahmed’s plea deal:
Ahmed incorporated Maisha, Inc., doing business as Associated Discount Foods (ADF), in 2005.
From January 2007 through December 2010, midsized, neighborhood grocery store had average monthly SNAP redemptions of $4,196. In January 2011, the store’s redemptions increased significantly to $17,457. By April 2011, the store’s monthly SNAP redemptions surpassed the average monthly redemptions of five other medium sized grocery stores within a fourteen mile radius of the store.
ADF’s redemptions increased dramatically in 2011 because Ahmed began illegally trafficking in SNAP benefits or exchanging SNAP benefits for cash.
For example, Ahmed would accept $65 in SNAP benefits in exchange for $50 in cash. He would retain the additional $15 as profit. Ahmed personally conducted all the SNAP benefit for cash transactions, according to the plea deal. He also allowed customers to purchase ineligible items such as alcohol, paper products, household items, diapers, and toiletries using SNAP EBT benefits, according to the plea deal. For example, on or about May 22, 2014, Ahmed purchased $168 in USDA food stamp benefits from a cooperating witness for $100 in cash and approximately $24 in eligible grocery items and a six pack of beer.
Ahmed also allowed individuals to borrow on credit against their SNAP benefits, according to the plea deal. And he allowed individuals to redeem SNAP benefits that were not in their name. He understood that these transactions violated SNAP regulations and were illegal.
In 2013, ADF’s average monthly SNAP redemptions totaled $195,809. By comparison, similarly sized stores in Alabama had average monthly redemptions totaling $12,099 and the national average totaled $9,567. Moreover, the 2013 average monthly SNAP redemptions for ADF exceeded the 2013 average monthly SNAP redemptions for one large grocery store and four supermarkets within a ten mile radius of the store.
Based on ADF’s total SNAP redemptions and comparison analysis, the Ahmed acquired an estimated $5,243,866 in SNAP benefits from July 2011 through June 2014 in a way that was contrary to law, according to the plea deal.
Ahmed also was charged with tax evasion for reporting that his total taxable income for 2013 was zero when it was really $210,926 for that year, according to the plea deal.
The money laundering charge involved Ahmed moving money from the grocery store’s business accounts into a personal checking account that was in another person’s name “in whole or in part to conceal or disguise that this money was the product of the food stamp fraud he had committed through ADF,” according to the plea deal.
The structuring charge involved Ahmed making deposits or withdrawals just under $10,000 to avoid banking rules that require identification in order to conduct such transactions of $10,000 or more.
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