A father and son duo allegedly used federal food subsidies to stock the shelves of their own store, and the government has now seized about $157,000 from the suspects to make up for the fraud.
U.S. Attorneys filed court documents relating to the seizure of $156,720 from Raja Zaman and his son, who together ran a conspiracy to misuse Supplemental Nutrition Assistant Program (SNAP) benefits, according to court documents first reported by the Arkansas Democrat-Gazette. The scheme allowed the Zamans to purchase food for their three convenience stores at half the actual cost.(RELATED: USDA STILL Can’t Prevent Food Stamps Fraud)
The investigators claim Zaman and his son, Haroon, who are joint owners of three convenience stores in Fort Smith, Arkansas ran the fraud scheme between 2013 and January, 2016, when the IRS searched the Zaman house. Haroon, who handled most of the daily operations of the three stores, admitted to investigators in January that he routinely directed “SNAP cardholders to purchase specified store product in exchange for cash equal to approximately half the cost of the product,” Stovall’s affidavit states.
The Zamans had three methods for defrauding SNAP through Electronic Benefit Transfer (EBT) cards. EBT cards work a lot like a debit card, except cardholders can’t redeem their benefits in cash.
EBT cards do require a PIN number for each transaction, so the Zamans needed surrogates who already received food subsidies. Cardholders would sometimes give their cards and pin numbers directly to the Zamans, and in exchange receive 50 percent of the value on the card in cash.(RELATED: Democratic Lawmaker Indicted For Food Stamp Fraud)
The Zamans would sometimes go with the cardholders to purchase goods, have the cardholder pay for the food with their EBT card, and pay back half the price in cash. Or, the Zamans would send trusted cardholders out to the store for specific products, then pay out 50 percent of the value in cash.
The manager of a CV’s Family Foods noticed the odd purchases from the two fraudsters. The Zamans would come into the store and purchase large amounts of soda and water with EBT cards. Getting suspicious, the CV’s Family Foods manager followed the Zamans when they left one day.
“The manager watched as the Zamans loaded from the truck into [their store],” Stovall said in the court documents.
IRS agents took the money from Raja Zaman’s Fort Smith, Arkansas home in January after obtaining a warrant for search and seizure. The cash was hidden under the mattress, in jacket pockets, and in a Spongebob tin box, IRS investigator Lee Stovall said in his affidavit. Investigators also found several EBT cards belonging to people outside the Zaman household.
Currently, the only official action against the Zamans is the seizure of cash from their house.
According to the U.S. Department of Agriculture, there were 2,787 retailers eligible to process EBT transactions in Arkansas, and SNAP paid a total of $656,320,313 in benefits in the state. Approximately 10 percent of all stores approved to accept EBT cards engage in SNAP fraud, the USDA reported in April.
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