Two Broadway Deli & Grocery employees charged with $1.4 million food stamp fraud | Paterson Times Paterson Times

Two Broadway Deli & Grocery employees charged with $1.4 million food stamp fraud

By Jonathan Greene
Published: February 20, 2015

Two Passaic County men were arrested Friday morning for allegedly conspiring to steal more than $1.4 million from the federal government through a fraudulent food stamp scheme, according to the United States Attorney’s Office.

Jacques Gary Doghram Apelian, of Haledon, and Wael Rabee, 32, of Paterson, are accused of running a scheme whereby customers of Broadway Deli & Grocery, located at 251 Broadway, purchased non-food items and took out cash from the electronic food stamp benefit cards, according to U.S. Attorney Paul J. Fishman.

Supplemental Nutrition Assistance Program (SNAP) benefits formerly known as food stamps prohibits participating businesses from allowing customers to purchase non-food items or issuing cashback after charging the electronic benefit transfer (EBT) cards, authorities said.

From October 2011 through December 2014 the store processed $1,493,294 in transactions over $50, according to authorities. Small grocery stores like the deli rarely have food stamp recipients spending $50 or more at one swipe. Authorities said charges over that amount often indicates fraud.

Investigators provided an example of how the scheme worked. A food stamp recipient would walk into the store, make a purchase of $5, but the store clerk would charge $95 on the benefit card. A portion of the money would be handed to the food stamp recipient, but typically 33-percent of the cash is kept by the shop, authorities said.

From October 2012 to December 2014 a cooperating witness working under the direction of federal agents engaged in 15 purchases at the grocery store. In each of the transaction the cooperating witness obtained cash from the food stamp benefit card, authorities said.

On January 24, 2013, Apelian charged $166.49 to the cooperating witness’s food stamp card when approximately $11.49 worth of items were purchased at the store including laundry detergent, an ineligible item. Apelian then handed the witness $70 in cash after keeping $35, authorities said.

Apelian told the witness $70 in returned cash was his limit, authorities said. Similarly, in February 12, 2013, Rabee charged $108.75 on the witness’s food stamp card after the witness purchased $3.75 worth of goods. Rabee then handed $70 in cash to the witness after keeping $35 for the store, authorities said.

During the 15 undercover operations the store kept 33-percent of the cash while giving food stamp recipients 66-percent in cashback, according to the court complaint. During one undercover operation, a federal agent visited the store at around 4:53 a.m. to find the store was busy with customers.

The shop was engaging in numerous fraudulent transactions that morning observed the agent, authorities said. At one point the agent told Apelian he needed more cash than what was being given, so Apelian informed him that the store begins conducting transaction at around 4 a.m., and that he was too late because the cash register was running low on cash.

Authorities said the deli is small with limited inventory yet it was processing approximately $38,849 worth of food stamp transactions every month much more than similar size stores nearby.

Agents of the Department of Agriculture, Office of Inspector General nabbed Apelian and Rabee Friday morning charging both with conspiracy to steal monies from the United States. The charge is punishable by a maximum penalty of five years in prison and a fine of up to $250,000, authorities said.

Both men are to appear before U.S. Magistrate Judge James B. Clark III in Newark federal court Friday afternoon.

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