A team of federal agents earlier this year raided a small grocery store in Portland, Maine, and the home of the establishment’s owner, as part of a probe into allegations of massive fraud against the government, according to recently unsealed documents.
A 52-page affidavit by an FBI agent lays out a mound of evidence pointing to a fraud ring run out of the Ahram Halal Market that’s cheating the government’s food stamp program, the Women, Infant and Children (WIC) welfare program, and committing tax fraud. Investigators peg the fraud at hundreds of thousands of dollars and identified almost $2.7 million that authorities want to seize.
“The exponential growth of Ahram’s WIC redemptions along with their total dollar volume of WIC redemptions are indicative of trafficking in WIC vouchers.”
So far, no criminal charges have been filed against the store owner, Ali Ratib Daham — or Ashraf Eldeknawey, alleged in the affidavit to have filed fraudulent tax returns.
“Nothing more has happened, so there’s nothing more I can say,” said Donald Clark, a spokesman for the U.S. attorney’s office in Portland.
The affidavit alleges Daham himself received food stamps and other government assistance, and lied about his finances. In addition to the bank account, the court document cites a limited liability company owned by Daham that bought properties in Portland and nearby Westbrook.
Reached by phone, Daham asked a reporter to call him back in an hour but then did not answer the phone at that time. Reached by phone, Eldeknawey denied wrongdoing.
Unusually High SNAP Volume
Federal investigators opened up an investigation in July 2015 after the Maine Department of Health and Human Services reported that Ahram Market had an unusually high volume of redemptions under the Supplemental Nutrition Assistance Program (SNAP), as the food stamp program is formally known. The ensuing investigation showed the market was billing substantially more in food stamp claims than other nearby stores of similar size and grocery selections.
In addition, redemptions to the WIC program grew from $87,352 in fiscal year 2013 to $268,047 in fiscal year 2015 — a 308-percent increase. Other stores recorded no significant increases during the time period, according to the court document.
“Based on Agent [Christopher] Robinson’s knowledge, training, and experience, the exponential growth of Ahram’s WIC redemptions along with their total dollar volume of WIC redemptions are indicative of trafficking in WIC vouchers,” the affidavit states.
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The fraud rate in the food stamp program is low and dropping, according to the Department of Agriculture, which oversees it. Still, because of its sheer size — some $75 billion a year — even a low percentage of fraud adds up to a large sum of money in raw dollars. It is about $3 billion a year, according to government audits.
Federal investigators repeatedly sent an undercover witness into Ahram Market posing as a recent immigrant, beginning in September 2015, according to the affidavit. That relationship unfolded as follows:
The witness told Daham that he or she was interested in getting benefits. Daham explained how to provide false information to obtain the most food stamp money. He told the witness to claim not to speak English but have a desire to go to school. That way, the witness would not be required to work. Daham also told the witness to lie about what kind of car the witness drove.
The following month, the witness placed a bag with several loaves of bread, a can of shaving cream, and a package of multiple bars of soap on the counter. Daham charged $13.60 for the items and $220 in SNAP benefits and then whipped out $200 in cash from his back pocket and gave it to the witness.
Over the next few months, the witness repeated the process, receiving cash — sometimes from the cash register and sometimes directly from Daham — during grocery purchases. Under that scheme, the customer received a small amount of groceries and cash. Daham would then submit paperwork indicating a much larger grocery purchase and keep the cash reimbursement from the government.
Daham also told the witness how to obtain disability payments and suggested a doctor for the witness’ spouse to see in order to get a physician’s note. Daham entered the witness’s Electronic Benefits Card number into a computer database that included a large number of Arabic names.
A review of Daham’s bank account showed a pattern of large cash withdrawals in the middle of each month, coinciding with when food stamp recipients receive their benefits in Maine, according to the affidavit. The FBI agent who wrote the document indicated that the withdrawals were necessary in order to have enough cash to “buy” food stamp funds from recipients.
The affidavit shows that Daham submitted an unusually high umber of reimbursements for baby formula. An audit revealed that from Aug. 28 through Sept. 25 in 2014, the market did not properly document 180 cans and/or packs of infant formula, totaling $3,250. From Sept. 26 until June 17 of the following year, the figures came to 2,956 cans and/or packs totaling more than $55,000.
The affidavit states that Daham listed the distributor of the formula as Listed Fedhal Foods in Everett, Massachusetts, even though it was not an authorized WIC vendor.
Tax Scheme Alleged
The allegations against Eldeknawey involve hundreds of tax returns he prepared for clients from an office near the meat counter of the Ahram Market.
According to the affidavit, the undercover witness in April 2015 used money obtained from a food stamp swap performed by Daham to pay Eldeknawey to prepare a tax return falsely showing that the witness had earned $7,526 in income. Using a Maine driver’s license and a list of fictitious names and Social Security numbers of dependents of the witness, Eldeknawey prepared a return claiming an Earned Income Tax Credit of $2,790 and a refund of $2,326. That is despite the fact the witness told Eldeknawey that he had been in the United States for eight months and had no job.
“When you get the FBI coming for you, you’re very concerned.”
The affidavit states that Eldeknawey in 2014 filed 66 returns, 97 percent of which claimed refunds totaling $235,784. Last year, he filed 192, all of which claimed refunds. Eldeknawey claimed in 133 of the returns that the taxpayer had self-employment income “of a questionable and suspicious nature,” the affidavit states.
Eldeknawey told LifeZette that he and Daham, both immigrants, work with other immigrants in the community. He said the nature of the work done by those immigrants looked suspicious to authorities because it differs from the native population.
“When you don’t speak English, you do odd jobs,” he said.
Eldeknawey also denied that he submitted fraudulent information on behalf of the witness cited in the FBI document. He said he “of course” is worried that he may be charged and has hired a lawyer.
“When you get the FBI coming for you, you’re very concerned,” said Eldeknawey, who added he has lived in the United States for 11 years.
Fraud is a category of crime disproportionately committed by immigrants, at least at the federal level. According to the U.S. Sentencing Commission, 19 percent of all federal fraud defendants in fiscal year 2015 were foreign-born.
Jessica Vaughan, director of policy studies at the Center for Immigration Studies, said the citizenship status of criminal defendants is “always relevant because those who commit crimes of any kind should be removed.”
Vaughan said Immigration and Customs Enforcement offices used to have active document identify benefits fraud task forces, but she said workload statistics suggest most have gone dormant.
“It was a real focus for them [in the past] because there was a nexus with smuggling operations,” she said.
Vaughan said ICE agents have the expertise and training other law enforcement agencies lack to develop crimes like food stamp fraud into trans-border crimes.
“ICE should be focused on these type of cases,” she said. “Usually, they have the other dots that can be connected.”