First Two Retailers Sentenced on Food Stamp Fraud Charges
In Less Than Two Years, Defendants Obtained More Than $1.4 Million in Payments for Food Sales That Never Occurred; to Date, Eight Retailers Have Pled Guilty in Food Stamp Fraud Schemes
| U.S. Attorney’s Office February 21, 2014 |
BALTIMORE—U.S. District Judge George L. Russell, III sentenced Hyung Cho, age 40, to 38 months in prison followed by three years of supervised release, and his mother Dae Cho, age 67, to 18 months in prison for food stamp and wire fraud in connection with a scheme to illegally redeem food stamp benefits in exchange for cash. Judge Russell also entered an order that the defendants forfeit $371,439.21 and pay restitution of $1.4 million. Both defendants resided in Catonsville, Maryland, and are Korean citizens who are illegally present in the United States. The defendants have further agreed not to object to any proceedings that may be brought to remove them from the United States upon completion of their sentence.
The sentences were announced by United States Attorney for the District of Maryland Rod J. Rosenstein; Special Agent in Charge William G. Squires, Jr. of the U.S. Department of Agriculture’s Office of Inspector General, Northeast Region; and Special Agent in Charge Stephen E. Vogt of the Federal Bureau of Investigation.
Dae Cho co-owned K&S Market, a convenience store located at 3910 West Belvedere Avenue in Baltimore. Dae and Hyung Cho operated the store. According to their plea agreements and court documents, the store participated in the Supplemental Nutrition Assistance Program (SNAP), previously known as the Food Stamp Program. In Maryland, the program provides eligible individuals with an electronic benefit transfer (EBT) card called the Independence Card, which operates like a debit card. Recipients obtain EBT cards through the state Department of Human Resources and then use the EBT card to purchase approved food items from participating retailers.
Dae Cho completed the required government form in March 2004 to become an authorized retailer in the program. Dae and Hyung received training and instruction regarding the requirements of the food stamp program, including that it was a violation of SNAP regulations to trade cash for SNAP benefits. Nevertheless, from June 2011 through May 2013, Dae and Hyung Cho exchanged SNAP benefits for cash at less than face value of the EBT benefits, in violation of the food stamp program rules, and kept up to 50 percent of the benefits for themselves, using the cash to pay rent and other bills. Dae Cho has estimated that about $25,000 to $30,000 worth of food stamp benefits were exchanged in this manner per month and that this occurred approximately 50 times a day.
As a result of these unlawful cash transactions, Dae and Hyung Cho obtained more than $1,400,000 in payments for food sales that never occurred.
Eight of the 10 convenience store owners or operators who were indicted in September 2013 in connection with schemes to illegally redeem food stamp benefits in exchange for cash have pleaded guilty to food stamp fraud and/or wire fraud. Yesterday, Jung Kim, age 52, of Ellicott City, Maryland, pleaded guilty to food stamp fraud and wire fraud. Kim owned and operated C&C Market, located at 4752 Park Heights Avenue in Baltimore. From November 2010 to April 2013, Kim obtained over $400,000 in payments for food sales that never occurred. Judge Russell scheduled Kim’s sentencing for June 20, 2014.
John Cunningham, age 54, of Baltimore, pleaded guilty on February 18, 2014 to wire fraud. Cunningham co-owned a corporation that owned Cunningham’s Amoco, a BP gas station and convenience store located at 4419 Park Heights Avenue in Baltimore. U.S. District Judge Richard D. Bennett scheduled his sentencing for May 21, 2014.
Amara Cisse, age 50, who owned Simbo Food Mart, located at 2103 West Pratt Street in Baltimore, and his wife Fanta Keita, age 45, who worked at the store, both of Windsor Mill, Maryland, pleaded guilty on December 3, 2013, to food stamp fraud and are scheduled to be sentenced on March 6, 2014.
Abdullah Aljaradi, age 52, and Ahmed Ayedh Al-Jabrati, age 58, both citizens of Yemen residing in Baltimore, have each pleaded guilty to wire fraud. Aljaradi and Al-Jabrati operated two convenience stores, Second Obama Express and D&M Deli and Grocery, located next door to each other at 901 Harlem Avenue in Baltimore. From October 2010 to July 2013, the defendants obtained over $2 million in payments for food sales that never occurred. U.S. District Judge William D. Quarles, Jr. scheduled sentencing for Aljaradi on April 30, and Al-Jabrati for March 25, 2014.
Dae and Hyung Cho are the first to be sentenced. Two more retailers were indicted in January 2014.
United States Attorney Rod J. Rosenstein praised USDA’s Office of Inspector General and FBI for their work in the investigation. U.S. Attorney Rosenstein expressed appreciation to Secretary Ted Dallas and the Maryland Department of Human Resources, as well as U.S. Citizenship and Immigration Services-Office of Fraud Detection and National Security for their assistance in the investigation. Mr. Rosenstein thanked Assistant United States Attorneys Judson T. Mihok, Kathleen O. Gavin, Leo J. Wise, and Peter M. Nothstein, who are prosecuting the cases.