Federal agents sat outside the small market on St. Paul's Stryker Avenue and watched as customers went in and came out, one by one.
Although very few lugged groceries, government food stamp records showed business at Stryker Avenue Market was booming: In one three-month period, the tiny market had more electronic benefit transfer transactions than a nearby Rainbow supermarket more than 28 times its size.
The agents thought they knew what was behind it, and their suspicions have resulted in the indictment of Khaffak Sahib Ansari, the market's former owner, on three counts of food-stamp fraud.
The indictment, returned Tuesday, alleges Ansari got about $3 million he wasn't entitled to by trading cash for food-stamp benefits for which the government reimbursed him.
Ansari, 45, of Arden Hills, is scheduled for arraignment Tuesday, and his attorney says the man will tell U.S. Magistrate Tony Leung that he did nothing wrong.
"I haven't seen the government's evidence, but all I know is my client says he's not guilty," said defense attorney Daniel Schermer. "We have to see what the government's got."
In a 13-page affidavit filed last month, Special Agent Tiffany Nelson of the U.S. Department of Agriculture's Office of Inspector General laid out specifics of the case, detailing a three-year investigation: Agents audited records, conducted surveillance of the store and sent in confidential informants to trade benefits for cash.
Investigators noticed the brisk pace of the store's business with EBT cards.
"Between 2004 and 2009, the average EBT redemption for a similarly sized store in Minnesota was approximately $322,793," Nelson wrote. "In contrast, during that same time period, Stryker's EBT redemptions...total approximately $3,153,059."
She also compared the store's EBT redemptions with those of five comparable stores within a mile; from December 2008 to December 2009, Stryker Avenue Market did nearly $1.8 million more in food stamp redemptions than the average of the other stores.
Stryker Market is at 605 Stryker Ave., in the city's West Side neighborhood. Schermer said Ansari sold the store to an unrelated party this year. It has been renamed Westside Groceries "and it's under completely new ownership," he said.
The heart of the case involves customers' use of EBT cards. People who get benefits under the USDA's Supplemental Nutrition Assistant Program, or SNAP, get an EBT card loaded with a certain amount of money.
When the person uses the card to buy groceries, the USDA reimburses the grocer. The government says only certain food items can be bought with the cards and they can't be used to buy alcohol, tobacco or cellphone minutes or be redeemed for cash.
Federal prosecutors claim Ansari ignored those bans. The indictment says he allowed customers to use EBT cards to buy cigarettes and cellphone minutes and even exchanged them for cash.
In particular, the indictment alleges three transactions, one in 2008 and two last year, in which Ansari sought reimbursement for more than $663 when he actually had given the customers $400 in cash.
Federal agents searched Stryker Avenue Market and Ansari's residence last September, seizing documents, invoices, ledgers and other records.
"After the search warrant was executed, agents contacted a number of benefit holders," Nelson wrote in her affidavit. "The benefit holders that agents spoke with told them that it was well known that Stryker was a place where you could trade your food stamp benefits for cash."
But Schermer said some types of EBT cards did allow users to get cash, much like an automated teller.
"If you've got cash coming, then you get cash and the government reimburses the storekeeper," he said. "Some people have only food stamps, but some people also have welfare benefits and they are loaded onto the card. There's no physical food stamps anymore. The benefit is loaded onto the cards and you go into a store and go buy groceries."
No comments:
Post a Comment