Convenience Store Operator Sentenced to 46 Months for Food Stamp Fraud
BALTIMORE, MD—U.S. District Judge J. Frederick Motz sentenced Abdo Mohamed Nagi, age 55, a citizen of Yemen residing in Baltimore, today to 46 months in prison followed by three years of supervised release for two counts of food stamp fraud and six counts of wire fraud in connection with a scheme to illegally redeem food stamp benefits in exchange for cash. Judge Motz also entered an order that Nagi forfeit $1.2 million which he had illegally obtained from the food stamp program.
The sentence was 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.
“Abdo Mohamed Nagi collected $1,200,000 from the USDA food stamp program without providing any food,” said U.S. Attorney Rod J. Rosenstein. “He distributed $600,000 in cash to the ‘recipients’ and put $600,000 in cash into his own pocket.”
Nagi entered his guilty plea on the first day of his trial on July 21, 2014. According to the indictment to which he pleaded guilty, Nagi owned and operated New York Deli and Grocery, located at 1207 West Baltimore Street, in Baltimore. Through the store, Nagi 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, then use the EBT card to purchase approved food items from participating retailers.
Nagi knew that it was a violation of SNAP regulations to trade cash for SNAP benefits. Nevertheless, from February 2011 through May 2013, Nagi exchanged SNAP benefits for cash at less than face value of the EBT benefits, in violation of the food stamp program rules. Typically, Nagi and kept up to 50 percent of the benefits for himself. To avoid detection, Nagi often debited funds in multiple transactions within minutes of each other. As a result of these illegal cash transactions, Nagi admitted that he obtained more than $1.2 million for food sales that never occurred.
Nagi split the proceeds with the SNAP recipients, keeping approximately $600,000 in illegal profits for himself and distributing $600,000 in cash to recipients.
In separate cases, all 10 convenience store owners or operators 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, and all have sentenced to up to 38 months in prison. These defendants were also ordered to pay forfeiture of up to $371,439.21, and/or restitution of up to $1.4 million.
Two more retailers, Abdulmalik Abdulla, age 37, and Ahmed Mohssen, age 54, both of Baltimore, were indicted in January 2014. A federal jury convicted them of food stamp fraud and wire fraud on August 8, 2014, following a four day trial. They are scheduled to be sentenced on November 14, 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 Attorney Leo J. Wise, who prosecuted this case.