Date: 06-29-2016

Case Style: United States of America v. Hasan F. Ahmed

Case Number: 2:15-cr-00428-RDP-SGC

Judge: R. David Proctor

Court: United States District Court for the Northern District of Alabama

Plaintiff's Attorney: Erica Williamson Barnes and Daniel Fortune

Defendant's Attorney: Michael P Hanle and Kathryn L Lippert

Description: BIRMINGHAM – Bessemer Grocer Sentenced to Nearly 4 Years in Prison
Must Pay $5.2 Million for Food Stamp Fraud and Money Laundering Scheme

A federal judge sentenced a Bessemer grocery store owner to three years and 10 months in prison and ordered him to forfeit $5.2 million to the government for defrauding the food stamp program, structuring cash transactions and laundering money to hide the illegal profit, and evading federal income taxes, announced U.S. Attorney Joyce White Vance, IRS Criminal Investigation Special Agent in Charge Veronica Hyman-Pillot and U.S. Department of Agriculture Office of Inspector General, Investigations, Special Agent in Charge Karen Citizen-Wilcox.

HASAN F. AHMED, 50, owner and operator of Associated Discount Foods on Ninth Street South in Bessemer, pleaded guilty in March to one count each of food stamp fraud, tax evasion and structuring currency transactions, and four counts of money laundering. U.S. District Judge R. David Proctor sentenced him on the charges. In accordance with Ahmed’s plea agreement with the government, the judge also ordered Ahmed to forfeit the $5.2 million as proceeds of illegal activity.

“For several years, this defendant misused thousands of dollars’ worth of food stamp benefits every day, enriching himself at the expense of American taxpayers and food stamp recipients,” Vance said. “The SNAP program provides assistance for those who need help to feed their families. We will not allow criminals to corrupt that program so they can feed their own greed.”

“Hasan Ahmed intentionally abused the SNAP program and lined his pockets with taxpayer funds,” Hyman-Pillot said. “His actions ultimately reduced the amount of benefits available to families in need of nutrition assistance. IRS-CI and our law enforcement partners will continue to work together and investigate similar schemes. We will trace every penny of illicit proceeds and return the funds to the United States Government.”

Associated Discount Foods is a mid-sized neighborhood grocery store that was authorized by the U.S. Department of Agriculture to accept Supplemental Nutrition Assistance Program food stamp benefits.

From January 2007 through December 2010, the store’s average monthly SNAP redemptions were $4,196, increasing to $17,457 in January 2011, according to Ahmed’s plea agreement. By April 2011, the store’s monthly SNAP redemptions surpassed the average monthly redemptions of five other medium-sized grocery stores within a 14-mile area.

“Based on ADF’s total SNAP redemptions and comparison analysis, the defendant acquired an estimated $5,243,866.49 in SNAP benefits from July 2011 through June 2014 in a way that was contrary to law,” the plea agreement said. Ahmed’s redemptions rose dramatically because he illegally swapped food stamps for cash, at less than the stamps’ face value, and allowed customers to purchase ineligible items with food stamp benefits at inflated rates, according to the document.

Ahmed evaded taxes on the illegal income when he filed a federal income tax return for the 2013 tax year claiming total income of $24,728 when his actual income was $210,927, according to his plea.

Court documents, including Ahmed’s plea agreement, outline his money laundering and illegal currency structuring as follows:

Ahmed controlled a BB&T checking account opened in the name of a relative, identified in court documents as R.N. Between June 2013 and June 2014, in four separate transactions, he deposited $58,100 in proceeds of his food stamp fraud into R.N.’s account. Ahmed moved money into R.N.’s account from his grocery store’s business accounts, where SNAP benefits were electronically deposited, to conceal or disguise that the money was the product of his food stamp fraud.

Ahmed illegally structured financial transactions in an Associated Discount Foods business account at BB&T, making two withdrawals of $10,000 and 36 withdrawals ranging from $9,200 to $9,900, for a total of $362,900, between January and May of 2013. After a bank teller informed Ahmed that transactions over $10,000 had to be reported, he made no further currency transactions over that amount.

Financial institutions are required by law to report currency transactions above $10,000 to the U.S. Department of Treasury. “The defendant engaged in these transactions to evade the reporting requirement” on the 38 withdrawals, according to Ahmed’s guilty plea.

Outcome: The defendant was sentenced to three years and 10 months in prison and ordered him to forfeit $5.2 million to the government.

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