Fraudulent Philanthropy

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The former owner of a Portland, Maine halal market was recently convicted of engaging in one of the largest Supplemental Nutrition Assistance Program (SNAP) fraud schemes to occur in the state. According to the former market owner from Westbrook, the $1.4 million scam was carried out to benefit the immigrant community in the neighborhood where his store was located. (Let’s just say that the government didn’t appreciate his philanthropic efforts on their behalf.)

Philanthropy involves donating money to a good cause. While the market owner’s intentions may have been good, his method of delivery was not. His welfare-for-cash scheme stole from the government, which is obviously illegal. And, he used his younger brother, who was a cashier at the store, to carry out the ruse.

According to evidence presented in court, the two brothers dolled out cash to their customers in exchange for their food stamp benefits and Special Supplemental Nutrition Program for Women, Infants and Children (WIC) over nearly five years. (Their fraudulent efforts enabled them to collect more than $4 million in SNAP and WIC receipts during that time with about $1.4 million obtained illegally.)

Even though nearly 60 supporters, including family and friends, were in the courtroom during his trial, the “kind family man who deserves lenience” did not receive it from the judge. The Iraq native, who is a naturalized American citizen, fled the country during the mid-2000s, moved to Portland and opened a business in 2011. When he addressed the court, he explained that life was difficult in his country and he was just trying to help Portland’s immigrant community. The prosecutor pointed out that his misdirected intentions backfired, providing ammunition for the restriction of welfare benefits. (He probably didn’t consider that before he launched into his illegal scheme.)

The 41-year-old former market owner from Westbrook pleaded guilty to Supplemental Nutrition Assistance Program (SNAP) fraud. He received a sentence of three years behind bars, three years of supervised release following his prison time and was ordered to pay $1.4 million in restitution. (According to today’s article, he has already paid back $80,000. That’s a good start.)

 The younger brother has a different ending to his story. The 23-year-old, who had started working in his older brother’s Portland store as a 16-year-old high school student stocking shelves, became cashier four years later. His attorney stated that his client should be responsible for $226,000 in losses because he worked as a cashier for only 18 months (As cashier, he was involved in the actual exchange of cash for benefits.)

Unfortunately for this young fraudster, he was caught smoking marijuana and had his bail revoked two weeks before his trial. (It goes down hill from there.) After a three-day jury trial, he was sentenced to two years in prison to be followed by three years of supervised release for committing Supplemental Nutrition Assistance Program (SNAP) fraud. He was also ordered to pay up to $955,000 in restitution. (What’s the likelihood of a 23-year-old paying that amount of money back?)

This Portland, Maine market owner knew the terms of his agreement as an authorized food stamp retailer, but he broke the law by exchanging cash for benefits. Instead of helping a vulnerable community, he has put them at risk and sentenced his brother to an uncertain future.

Today’s “Fraud of the Day” is based on an article entitled, Brothers sentenced in $1.4M welfare-for-cash scheme at halal market,” published by Bangor Daily News on June 19, 2018.

The former owner of a Portland halal market who, with his brother, traded $1.4 million in federal food benefits for cash was sentenced Monday afternoon in U.S. District Court to three years in prison.

The federal prosecutor called the case “one of the largest, if not the largest, fraud cases involving [Supplemental Nutrition Assistance Program] benefits in [Maine].”

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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.