Father, son agree to admit guilt in $1M fraud case

2014-06-06T19:30:00Z 2014-06-06T20:24:20Z Father, son agree to admit guilt in $1M fraud caseMarc Chase marc.chase@nwi.com, (219) 662-5330 nwitimes.com
June 06, 2014 7:30 pm  • 

HAMMOND | A father-son team of Gary grocery store operators filed plea agreements in federal court Friday, admitting to stealing from the federally funded food stamp program, court records show.

Fayez Abdallah and his son, Amjad Muhamad, filed the pacts with prosecutors, agreeing to plead guilty at a June 9 Hammond federal court hearing to one count each of defrauding the Indiana Supplemental Nutrition Assistance Program, also known as food stamps.

A third defendant in the case, Yousef Muhamad, also is scheduled to change his plea in the case June 10, according to federal court records. No plea agreement was on file for that defendant as of Friday afternoon.

Prosecutors allege more than $1 million in stolen federal money was involved in the scheme, court records state.

Each man could face up to 20 years in prison and fines of up to $250,000 if the pleas are accepted by a Hammond federal court judge, according to the plea agreements.

Under the plea agreements, prosecutors would drop four similar charges against Abdallah and five similar counts against Muhamad.

The men were accused of trading cash and goods ineligible for food stamp benefits — such as tobacco and clothing — to patrons in exchange for the swipes of the patrons' food stamp debit cards.

The defendants then sought reimbursements from the food stamp program for a profit, a criminal complaint in the case states. According to the complaint, various stores either owned or operated by the defendants received more than $1 million in improper reimbursements from the food stamp program.

The alleged crimes occurred between November 2009, and June 2012, at the A & M Supermarket, Glen Park Convenience Mart, Mid-Town Market and Broadway Foods in Gary, according to the complaint.

During that time period, Broodway Foods recevied $1.7 million in food stamp reimbursements for only $595,193.18 in eligible food items actually purchased, the criminal complaint states.

As part of the scheme, employees at the store were instructed by Yousef and Amjad Muhamad to offer $40 in cash to patrons in exchange for $65 in debits from food stamp benefits, the complaint alleges.

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