Hungry for Fraud

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The Supplemental Nutrition Assistance Program (SNAP), which serves millions of low-income people in the United States, is the largest type of government aid available for domestic hunger. (Perhaps that’s why it is frequently targeted by fraudsters looking to make a few extra million dollars.) An article published by Miami.CBSLocal.com states that two brothers from Florida tried to get a seat at the SNAP fraud banquet, but they ended up leaving hungry after being caught in a $6 million scheme to steal SNAP dollars from deserving beneficiaries.

According to court documents, the brothers owned a meat and fish market. The duo unlawfully provided some of their SNAP customers with cash in exchange for the funds on their Electronic Benefits Transfer (EBT) cards, which act like debit cards. They also charged a fee of between 30 and 50 percent of the benefits redeemed. (USDA specifically prohibits the exchange of SNAP benefits for cash.) In fact, over a four-year-period, more than $6 million in SNAP proceeds were redeemed at their grocery store. (Apparently, some of the transactions were legitimate; however, the defendants admitted that between $2.8 and $6 million of the proceeds were fraudulent. That’s a pretty wide gap.)

So what did they do with the extra cash you ask? The brothers admitted to withdrawing $1.8 million in cash. Further research revealed that one of the brothers wired approximately $179,000 to an account in his name in Lebanon, plus another $400,000 to entities and individuals in Lebanon and Canada. Another $220,000 went to purchase a family home for one of the men. (Along the way the two declared bankruptcy, neglecting to mention the bank accounts overseas. I’m sure they just forgot about them.)

Further research reveals that the fraudster duo pleaded guilty to one count of conspiracy along with one count of bankruptcy fraud and another count of engaging in a monetary transaction in a criminally derived property. They were sentenced to 70 months in prison followed by three years of supervised release. In addition, were also given a sentence of five years of organizational probation and will pay $4 million in restitution. (Way to go Judge, sounds like a fair sentence to me!)

The SNAP program is intended to benefit low and middle income recipients by helping them to afford more nutritious food. It was not intended to be the cherry on top for these two crooks that got caught with their hands in the cookie jar. It looks like a lengthy prison sentence will be the only treat they are going to receive as a result of their illegal acts.

Source: Today’s ”Fraud of the Day” is based on an article titled, ”Two Florida Brothers Sentenced For Food Stamp Fraud,” published by Miami.CBSLocal.com on July 27, 2014.

WEST PALM BEACH — Two South Florida brothers have been sentenced for their role in a multi-million dollar food stamp scam.

The brothers are 52 year-old Ali Jaber and 42 year-old Hadi Jaber. They were sentenced Thursday to more than five years in prison and agreed to pay $4 million in restitution. The brother previously pleaded guilty to crimes including conspiracy and bankruptcy fraud.

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Larry Benson
Larry Benson is currently the Director of Strategic Alliances for Revenue Discovery and Recovery at LexisNexis Risk Solutions. In this role, Benson is responsible for developing partnerships for the tax and revenue and child support enforcement verticals. He focuses on embedded companies that have a need for third-party analytics to enhance their current offerings.