Ogden Markets, Several Individuals Charged in Connection with Scheme to Defraud Food Program
|U.S. Attorney’s Office December 12, 2012|
SALT LAKE CITY—Two federal indictments unsealed Wednesday afternoon in Salt Lake City charge two Ogden markets and several individuals with violations of federal law in connection with what the indictments allege were fraud schemes to defraud the Supplemental Nutrition Assistance Program (SNAP) operated by the U.S. Department of Agriculture Food and Nutrition Service.
The SNAP program provides assistance to low income individuals and families to purchase food. States are given authority to determine eligibility and to certify recipients who qualify for the program. In Utah, SNAP benefits are administered by the Utah State Department of Workforce Services.
Approved applicants are given a benefits transactions card, similar to a bank debit card, linked to a SNAP account. Benefits for recipients are electronically encoded to the account on a monthly basis to allow beneficiaries to purchase eligible food items. SNAP card benefits can only be exchanged for eligible food items and can only be used at authorized stores. The cost of the purchased groceries is automatically deducted from the beneficiary’s SNAP account at the time of sale. Generally, only non-prepared food items for human consumption may be purchased using SNAP cards. Stores are prohibited from accepting SNAP benefits in exchange for things like alcoholic beverages, tobacco, prepared hot foods, pet food, cell phone minutes/ring tones, or household goods. Benefits cannot be redeemed for cash.
The indictments allege that, on multiple occasions between April 2010 and October 2012, a SNAP benefit card would be presented to employees of the Corner Market located at 1390 9th Street in Ogden or the Westside Valley Market located at 873 West 24th Street in Ogden, along with a request to redeem the value on the card for cash. Market employees would require the customer to purchase a nominal amount of food or non-food items, such as cigarettes, and in one or more card transactions would process the purchase and an additional amount up to the SNAP benefit limit on the card. A portion of the value of the transaction over the value of the merchandise purchased would be refunded to the customer in cash, the indictment alleges. The full value of the transaction would subsequently be deposited by electronic funds transfer into the bank account of the market, the indictment alleges.
Indictment No. 1
U.S. v Zia Atta, et al. alleges conduct in connection with the Westside Valley Market. Seven individuals and the market are named in this 28-count indictment. Charges include conspiracy to commit wire fraud; wire fraud; supplemental nutrition assistance benefits program fraud; access device fraud; conspiracy to commit money laundering; and money laundering.
Charged in the indictment are Zia Atta, age 38, of Ogden; Aweas Akbar Al-Quadri, age 21, of Ogden; Naseer Hamad Durani, age 39, of Rocklin, California; Farad Said Farani, age 36, of Ogden; Mariana Navarro Farani, age 29, of Ogden; Seraj Ghasem Pour Babakandi, age 23, of West Haven; Shershah Lodin, age 39, of Pittsburg, California; and the Westside Valley Market, located at 873 West 24th Street, in Ogden.
The indictment alleges that on the application to participate as a SNAP retailer accepted in February 2008, Lodin reported estimated food sales of those items that are eligible for purchase with SNAP benefits of $124,000. The amount was revised a few months later to $34,500, and the application was updated to add Naseer Durani as the owner. In January 2011, Westside Market was reauthorized as a SNAP retailer, with Mariana Navarro Farani as the new owner. Farani reported estimated annual food sales of $613,000.
The indictment alleges Westside Market redeemed approximately $2,632,133.47 in SNAP benefits during the period January 2010 through October 2012. The merchandise available for purchase at the market is that of a small market or convenience store, including small food and convenience items such as cigarettes, soft drinks, chips, candy, cookies, canned soups and pastas, prepared sandwiches, and other snack items.
Indictment No. 2
US v Aziz, et al. charges six individuals in a 38-count indictment in relation to similar alleged conduct at the 9th Street Corner Market. Charged in the complaint are Atta, Masood Aziz, age 36, of Elk Grove, California; Diana Funez, age 19, of Ogden; Fidel Funez-Lion, age 18, of Ogden; Sharara Haidari, age 30, of Elk Grove, California; Siavosh Sabri, age 41, of Salt Lake City; and the 9th Street Corner Market.
The market was authorized to accept SNAP benefits on April 2, 2009, with estimated annual food sales of eligible items of $12,750. On September 3, 2009, an updated application was filed adding Atta as owner and revising the reported annual figures to $12,000, according to the indictment.
On March 2, 2010, another updated application was submitted, this time by Haidari showing her as co-owner with Atta and revising the reported annual sales figure to $420,000. The Corner Market redeemed approximately $6,025,444 in USDA SNAP benefits during the period April 2010 through October 2012.
Aziz, Atta, Farad Said Farani, Mariana Farani, Seraj Ghasem Pour Babakandi, and Diana Funez were arrested Tuesday in Ogden and Siavosh Sabri was arrested in Salt Lake City. Fidel Funez-Limon was already in custody on separate unrelated state charges. Initial appearances for the defendants in Utah will be Wednesday afternoon. Haidari and Al-Quadri were arrested in California Tuesday.
Conspiracy to commit wire fraud and wire fraud counts carry potential penalties of up to 20 years in federal prison. Supplemental Nutrition Assistance Benefits Program Fraud counts have potential penalties of up to five years and access device fraud has a potential penalty of 15 years. Money laundering and conspiracy to commit money laundering carry potential 10-year penalties. Each count in the indictment includes potential fines of up to $250,000.
Indictments are not findings of guilt. Individuals charged in indictments are presumed innocent unless or until proven guilty in court.
The U.S. Attorney’s Office in Utah is prosecuting the case. It is being investigated by the U.S. Department of Agriculture’s Office of Inspector General, the FBI, ICE Homeland Security Investigations, and the Ogden Police Department. Several other law enforcement agencies helped with the execution of warrants Tuesday.