Former Small Grocery Store Owner Admits to $1.2 Million Food Stamp Fraud Scheme: U.S. Attorney

The former owner of a small grocery store in Camden admitted that he stole more than $1.2 million dollars from the U.S. Government through a food stamp scheme, U.S. Attorney Paul J. Fishman said on Monday.

Kaher Abdullah, 57, of Philadelphia, pleaded guilty to an information charging him with one count of theft of government funds.

Abdullah opened Express Food Mart on South Broadway in Camden in June of 2011, according to documents filed in the case and statements made in court.

From November of 2011 through October of 2014, Express Food Mart was authorized to accept Supplemental Nutrition and Assistance Program (SNAP) benefits (formerly known as food stamps). The program is administered by the U.S. Department of Agriculture.

Retail food stores that have been approved for participation in SNAP may sell food in exchange for food stamp benefits, but they can’t exchange food stamp benefits for cash.

Every food stamp recipient receives an Electronic Benefits Transfer (EBT) card, similar to a debit card, to make purchases, and every retailer authorized to accept food stamp benefits has an EBT terminal where food purchases are made by swiping the card.

After the customer enters a Personal Identification Number (PIN), the EBT terminal verifies the PIN, determines whether there is enough money in the account to make the purchase, and informs the retailer whether the transaction should be authorized or denied.

If the transaction is authorized, the amount of the purchase is then deducted electronically from the food stamp benefits reserved for the customer, and the amount is credited to the retailer’s designated bank account.

Abdullah admitted he illegally received more than $1.2 million in reimbursements for SNAP benefits through a business bank account at CitiBank.

The volume of SNAP benefits 2 reimbursement received at Express Food Mart substantially exceeded estimates for businesses of similar size, indicating large-scale food stamp fraud.

Abdullah admitted that, in general, he and other employees redeemed SNAP benefits for approximately 50 cents on the dollar.

Abdullah admitted that shortly after receiving $1,264,006 in the Express Food Mart account, he transferred the money to another account which he used to pay personal expenses.

Abdullah was charged after undercover agents exchanged SNAP benefits with Abdullah and other employees at Express Food Mart for cash.

Abdullah faces up to 10 years in prison and a fine of $250,000, or two times the amount of the loss to the United States, whichever is greater.

Under the terms of the plea agreement, Abdullah has agreed to the entry of a forfeiture money judgment for $1,264,006.

Sentencing is scheduled for Sept. 13.