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October 15, 2010

Edmond man indicted in food stamp fraud

Alleged loss to program exceeds $1.8M

Mark Schlachtenhaufen The Edmond Sun

EDMOND — Federal grand jury indictments were unsealed Thursday charging an Edmond man and an Oklahoma City man with conspiracy to defraud the food stamp program.

The two indictments were separate and unrelated, and the total alleged loss to the program exceeds $1.8 million, according to Sanford C. Coats, U.S. attorney for the Western District of Oklahoma.

Muhammad Zahid, 28, of Edmond, was the owner/operator of Ghani Mart, located at 2719 N.E. 23rd St., Oklahoma City, according to court records. The grand jury alleges that the defendant applied and was authorized by the USDA on Oct. 15, 2007, to be a qualified retail store to accept SNAP benefits.

The indictment also alleges that the defendant conspired with others to buy food stamp benefits for cash on a discount basis of 50 cents on the dollar, and would then debit recipients’ Access Oklahoma cards for the full dollar benefit.

It is alleged that from December 2007 to September 2010 the defendant illegally redeemed $652,614 in food stamp benefits from the U.S. Department of Agriculture.

If convicted, Zahid faces up to five years in prison, a $250,000 fine and forfeiture in the amount of $652,614. He was released after posting a $10,000 unsecured bond.

On Wednesday, Zahid entered a plea of not guilty. The indictment is merely an accusation and the defendant is presumed innocent unless and until proven guilty.

Perry Hudson, Zahid’s attorney, said he is new to the case and would not be commenting at this time.

The U.S. Department of Agriculture administers the Supplemental Nutrition Assistance Program (SNAP), formerly known as the Food Stamp Program.

SNAP was created to provide eligible food items available through approved retail food stores to eligible low-income individuals as determined by the Oklahoma Department of Human Services.

Retail stores apply for USDA authorization to accept SNAP benefits as payment for eligible food items and certify they understand that trading cash for food stamp benefits violates program regulations.

Since February 2008, the Oklahoma Department of Human Services has given electronic benefit transfer cards — a debit-type card known as Access Oklahoma cards — to eligible SNAP recipients instead of paper food stamps.

A three-year investigation led to 22 stores in the Oklahoma City metro area being raided this week, said Sheree Powell, spokeswoman for the Oklahoma Department of Human Services.

Powell said 30 individuals were arrested on probable cause warrants by the Oklahoma City Police Department and the Oklahoma County Sheriff’s Office during the operation. The investigation is ongoing, she said.

Powell said her agency’s food stamp fraud unit monitors and tracks data, and has assisted agencies in other states in separate investigations. Food stamp fraud is not rampant. Nationally, food stamp fraud runs about 3-6 percent, and the percentage varies by area, Powell said.



SECOND DEFENDANT

The other unrelated indictment alleges that Muluneh Zeleke, 54, of Oklahoma City, was the owner/operator of Z&Z Convenience Store, 2445 N. Martin Luther King in Oklahoma City.   

The indictment alleges that Zeleke conspired with others to buy SNAP benefits for cash on a discount basis of 50 cents on the dollar, and to debit SNAP recipients’ Access Oklahoma cards for the full dollar benefit.

It is alleged that from October 2007 to February 2010, Zeleke illegally redeemed $1,224,888 in SNAP benefits from the USDA.

If convicted, Zeleke faces up to five years in prison, a $250,000 fine and forfeiture in the amount of $1,224,888. The indictment is merely an accusation and that the defendant is presumed innocent unless and until proven guilty.

Susanna Gattoni, Zeleke’s attorney, did not reply to a message seeking comment.

The separate and unrelated cases were investigated by the USDA Office of Inspector General and the Oklahoma Department of Human Services. The cases are being prosecuted by Assistant U.S. Attorney Vicki Behenna, of Edmond.



marks@edmondsun.com | 341-2121, ext. 108

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