BALTIMORE (January 07, 2018)—On January 2, 2018, U.S. District Judge Richard D. Bennett sentenced Kassem Mohammad Hafeed, age 53, of Baltimore, Maryland to 27 months in prison, followed by three years of supervised release, for food stamp and wire fraud. Judge Bennett also ordered Hafeed to pay restitution in the amount of $1,532,642.
The sentence was announced by Acting United States Attorney for the District of Maryland Stephen M. Schenning; Special Agent in Charge Gordon B. Johnson of the Federal Bureau of Investigation, Baltimore Field Office; and Special Agent in Charge Bethanne M. Dinkins of the U.S. Department of Agriculture's (USDA) Office of Inspector General.
According to Hafeed's plea agreement and findings made during the sentencing hearing, in October 2010, Hafeed incorporated his business, Yemen Grocery and was licensed to participate in the Supplemental Nutrition Assistance Program (SNAP) as an authorized retailer. In order to participate in SNAP as an authorized retailer, businesses must certify that they understood and agreed that "trade[ing] cash for Supplemental Nutrition Assistance Program benefits "is a "violation" of SNAP regulations. In order to receive SNAP reimbursements, authorized retailers were required to establish a single authorized bank account, approved by FNS, into which SNAP benefits from legitimate transactions would be deposited.
Between October 2010 and August 2016, Hafeed redeemed SNAP benefits in exchange for cash in violation of the program rules and regulations. Hafeed fraudulently redeemed the full amount of the SNAP benefits charged on the Electronic Benefit Transfer (EBT) cards and deposited the money into his bank accounts. Typically, Hafeed paid the individual who had presented the EBT card approximately half of the value of the amount he/she had debited in cash.
As a result of these unlawful cash transactions, Hafeed received between $1.5 million and $3.5 million in SNAP deposits for food sales that never actually occurred or were substantially inflated.
Acting United States Attorney Stephen M. Schenning praised the FBI and USDA's Office of Inspector General for their work in the investigation. Mr. Schenning thanked Assistant U.S. Attorney Sean Delaney who prosecuted the case.
14 Md. Retailers Facing Federal Indictment for $16 Million Food Stamp Fraud, August 30, 2016