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Corruption Chronicles

Food Stamp Fraud on the Rise as Government Allows “Retailer Trafficking”

Weeks after a federal audit blasted the government for failing to curb rampant fraud in its multi-billion-dollar food stamp program, two Ohio men have been indicted for operating a $2.7 million scheme that spanned six years. One of the men, 59-year-old Amin Salem, is a convicted felon with a history of food stamp fraud yet the feds took six years to bust him and he remained a qualified food stamp retailer. The other man, Mohamed Salem, is his 32-year-old son and federal prosecutors say they operated a highly lucrative food stamp trafficking ring in the Cleveland area with the help of a buddy named Zahran al-Qadan.

The father and son team illegally accepted taxpayer-funded food stamps at seven gas stations, laundered the profits, had illegal firearms, operated an unregulated slaughterhouse and polluted a stream by dumping animal blood and other fluids into it, according to a statement issued by the Department of Justice (DOJ). They have been charged with conspiracy to launder money and engaging in real estate transactions using laundered food stamp proceeds. The father was also charged with illegal possession of a 12-guage shotgun and AR-15 long rifle and operating an unregulated animal slaughterhouse. The animal meat was sold for food stamp benefits, which were also accepted at the Salem’s seven gas stations. Because papa Salem had been previously convicted of conspiring to defraud the government, food stamp fraud, mail fraud and money laundering, the transactions were processed in the son’s name as well as al-Qadan’s.

“This father and son duo engaged in various illegalities to include stealing from every taxpaying citizen by engaging in food stamp fraud, a program designed to help those in need,” said FBI Acting Special Agent in Charge Robert E. Hughes. “Salem put others at risk by selling unsanitary, unregulated food.” The FBI and U.S. Department of Agriculture (USDA), which administers food stamps, reportedly investigated the Salem’s money laundering operation for two years before obtaining enough evidence to charge them.  The Internal Revenue Service (IRS) as well as Ohio state agencies and Cleveland-are law enforcement also participated in cracking the ring, which fleeced American taxpayers out of millions.

Though this operation sticks out among others, Food stamp fraud has been pervasive for years and the alarming numbers have been well documented by the government. The USDA’s most recent figures show about $1.1 billion in food stamp fraud a year. Nearly 12% of retailers authorized by the government to accept food stamps engage in illegal practices, according to the agency. Judicial Watch has reported extensively on the rampant fraud in the program that costs American taxpayers a bewildering $64 billion annually to provide more than 20 million households with free food. Less than a year ago, nearly 200 people were arrested in Florida for operating a sophisticated ring in which 22,000 fraudulent food stamp transactions totaling $3.7 million were documented by a task force of local and federal authorities. In 2016 the feds busted the largest food stamp fraud operation in history, a $13 million enterprise run by flea market retailers in the largely black and Hispanic areas of south Florida’s Miami-Dade County known as Opa-Locka and Hialeah.

There appears to be no end in sight to the corruption that has long infested the famously bloated program. Just a few weeks ago, a federal audit revealed that “retailer trafficking” swindles the government out of more than a billion dollars a year while the USDA sits by. The agency assumes that 90% of the benefits redeemed in small stores and 40% in large stores were trafficked, according to the audit, which was conducted by the investigative arm of Congress. As if the widespread fraud weren’t bad enough, the USDA allows it to occur even though a 2008 law armed the agency with the authority to strengthen penalties for retailers caught trafficking. A USDA division called Food and Nutrition Services (FNS) is responsible for rooting out the type of fraud and corruption that continue plaguing the food stamp program. “As of November 2018, FNS had not implemented this authority,” according to congressional investigators. “By failing to take timely action to strengthen penalties, FNS has not taken full advantage of an important tool for deterring trafficking.”